Blackstone, Lion near €2.6bn drinks exit

If it completes, the trade sale to Japanese brewer Suntory will be one of the largest private equity exits this year.

The Blackstone Group and Lion Capital are nearing a €2.6 billion sale of soft drink business Orangina Schweppes, a source close to the process has confirmed.

Global buyout firm Blackstone and consumer sector-focused firm Lion bought the business in early 2006 for around €2.2 billion in a carve-out from confectionary and drinks giant Cadbury Schweppes. The two investors

Orangina: Exit with fizz

yesterday confirmed that they had received a binding offer from Japanese brewer Suntory Holdings to buy the company, but did not disclosed the value of the potential deal.

If the deal completes at €2.6 billion, it would constitute one of the largest private equity exits this year. Few notable larger exits include Warburg Pincus’ $4.4 billion sale of Metavante Technologies to Fidelity National Information Services and Blackstone’s $3.6 billion sale of Steifel Laboratories to GlaxoSmithKline.

Lion and Blackstone would more than double their initial investment of €300m each, representing a 30 per cent annual return on their investment, according to a report in this morning’s Financial Times.

Suntory, a Japanese brewer which has been trying to grow its international presence, will take over a portfolio of 22 brands selling in more than 60 markets, including labels such as Orangina, Schweppes, Oasis, Trina, Pulco and La Casera. Suntory will also add distribution rights to the Schweppes and Oasis brands in the North East Asian region.

Following this exit, Lion Capital’s portfolio will contain two remaining drinks producers: Russian Alcohol Group and Nidan, two Russian businesses acquired in 2008 and 2007 respectively.

Blackstone and Lion were advised on the sale by Rothschild, JPMorgan, Citigroup, Blackstone Corporate Advisory, RBS and Nomura.