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Lion Nathan said today it is selling its Auckland brewery site to AMP Capital Investors for $162 million, and will build a new New Zealand manufacturing plant for $250 million.
The sale was subject to Overseas Investment Office approval.
AMP Capital intended to develop the Newmarket property for high-end residential, retail and office use, Lion Nathan said.
Most of the sale price will be payable when Lion Nathan leaves the site in about four years, but $50 million will be realised in this financial year.
"A once in 50-year investment was needed if we were to remain at our current site," Lion Nathan chief executive Rob Murray said.
"Over the years Newmarket has changed into a light commercial, retail and residential area.
"As a manufacturing site the property is now landlocked, making access and expansion increasingly difficult."
He said Lion would build a new manufacturing and warehousing facility in Auckland for about $250m, which would better align production and its supply chain with market demand.
Lion has secured options on a number of Auckland sites, but did not expect to make a decision until the end of November.
Once completed, the facility was expected to yield up to $15m a year in earnings before interest, tax, depreciation and amortisation.
The alternative of staying at the existing brewery would have required an investment of around $50m.
Lion Nathan said its New Zealand beer volumes grew by 1.9 per cent to 126 million litres for the year to date, primarily on the back of growth in its core brands.
- NZPA
