Lion has announced that it plans to sell its Lion Dairy & Drinks (LDD) business.
Lion CEO Stuart Irvine said: “Following careful consideration, we believe a sale of LDD is the best option to set both Lion and LDD up with the capital and resources needed to grow into the future.
“Following the turnaround program, LDD has been transformed and now has a sound platform for future growth. It’s clear from the further work done in recent weeks that LDD’s strategy to more fully leverage growing consumer wellness trends will require new capabilities and capital investment. The sale process will focus on finding the right owner to take LDD forward and unlock its full potential.”
Kirin Holdings said last month that it was undertaking a strategic review of Lion. The remaining Lion business has a number of avenues for growth available and the decision to sell the drinks part of the business will provide the capital needed to accelerate investment behind these.
Lion has built up a portfolio of premium, crafted non-alcohol beverages alongside its core beer brands and the company says its recent investments in hot beverages like Schibello coffee in Australia and Good Patron in NZ are showing promising early signs.
Lion will continue to explore opportunities in growing high margin categories in both alcohol and non-alcohol, with a view to nurturing and growing other craft beverage brands. Lion said that any sale of LDD will not impact Lion’s alcohol businesses in Australia and New Zealand.
Lion has already received unsolicited approaches from potential buyers and will now formally engage with interested parties, reports the Australian Financial Review. The leading candidate is thought to be Coca-Cola Amatil, which is interested in adding better-for-you and functional beverages to its portfolio.