The maker of Lion Red, Speight's, Waikato Draught, Canterbury Draught, Steinlager and Mac's beer is trying to take over the bottler of Coca-Cola and Schweppes.
As is often the case a deal being announced in Australia has huge ramifications for New Zealand.
Lion Nathan, the now Australian-based drinkscompany once run by Sir Douglas Myers, today launched a A$7.6 billion ($4.9 billion) takeover of Australian soft drinks group Coca-Cola Amatil.
Lion has 52 per cent of the New Zealand beer market while Coca-Cola Amatil has 53 per cent of the New Zealand non-alcoholic ready-to-drink market and 75 per cent of the carbonated soft drink market.
There is only a little crossover. Mac's sells ginger beer and Coca-Cola Amatil has a beer joint venture, Pacific Beverages, which distributes Peroni and Miller beer.
Analysts said on first look the deal looks like part of a major realignment of drinks giants.
Japanese drinks company Suntory has purchased Frucor, which holds the Pepsi bottling licence in New Zealand. Frucor's brands include Fresh Up, Mizone, V, H2go and Just Juice.
Another Japanese drinks company Kirin, which controls Lion Nathan, gets a soft drinks business with this deal. Coca-Cola Amatil's main soft drink brands include Coca-Cola, Fanta, Sprite, Lift, Lift Plus, Powerade, L&P and Schweppes.
The cash and stock bid, pitched at a 25 per cent premium to Coca-Cola Amatil's share price, was initially rejected by the target.
A takeover of Coca-Cola Amatil, 30 per cent-owned by US-based The Coca-Cola Company, would give Lion Nathan a 60 per cent share of Australia's A$10.3 billion soft drinks market as well as a canned fruits and vegetables business.
Lion Nathan employs 1400 people in New Zealand. It reports results tomorrow so is not talking today.
Coca-Cola was first introduced in New Zealand in 1939 and has been locally produced since 1972. Coca-Cola Amatil has an Auckland plant capable of producing 2.5 million litres of soft drink per day. It has a plant in Christchurch capable of producing 368,000 litres per day.
It also bottles Pump and Deep Spring water at a plant in Putaruru, which can produce 50,000 bottles of water a day.
Analysts said the takeover has logic as these days so much beer is sold in supermarkets.
Lion Nathan sees cost benefits of A$100m to A$130m a year from the deal.
