Coca-Cola Amatil (CCA) may be eyeing off Lion Drinks & Dairy, according to media speculation.
The rumours come a fortnight after news the dairy and drinks arm of food and beverage giant Lion had been placed under strategic review, with parent company Kirin hinting at a possible sellout of the brand if sales fail to increase.
Several well-known Aussie brands sit under Lion Dairy & Drinks (LDD), including Dairy Farmers, Pura Milk, King Island Cheese and Dare flavoured milk.
LDD is expected to put to sale in mid-October, following the review.
Speculation the likely buyer could be CCA comes as Citibank’s head of research Craig Woolford said LDD would be a good fit for the non-alcoholic bottler.
In a report, Woodford said: “Lion Dairy & Drinks could be a good acquisition for Coca-Cola Amatil.
“Juice is a challenging category, but dairy is in growth and both ready-to-drink coffee and functional beverages also offer growth options with good price realisation,” he added.
The sale of Lion Dairy & Drinks’ would be a massive blow to the brand’s media agency of record, Starcom.
Lion Dairy & Drinks is one of Starcom’s biggest clients, having won 100 per cent of the media buying for the brand in 2014
IPG’s UM agency currently has the media account for Coca-Cola Australia.