Coca-Cola European Partners (CCEP) said on Monday it was raising the offer by 6 per cent to $A13.5 per share, valuing the Australian company at $A9.93 billion ($US7.70 billion).

Shares in Coca-Cola Amatil, which have been gaining steadily since CCEP’s initial offer was made public in October, hit an eight-year high of $A13.41 in response.

Coca-Cola has long outsourced its bottling operations to separate regional operators. It owns 31 per cent of Amatil and 19 per cent of CCEP, which is now by far the largest by revenue, serving 13 countries in Western Europe.

While the deal would unite two companies that bottle and distribute Coca-Cola drinks, providing scale, operating efficiencies and a larger geographic spread, it also provides CCEP with a platform for further consolidation in Asia.

Amatil said it backs the offer, which would be Australia’s biggest deal this year and comes after reports that its major shareholders viewed the earlier offer of $A12.75 per share as too low.

The last bottle of Coca-Cola rolled off the Adelaide production line in December 2018 following 66 years of local production at its Port Rd Thebarton factory.

Since then, production has been progressively relocated to other plants in Western Australia and Queensland.

It still maintains a major SA distribution centre at Salisbury.

The company’s preliminary full-year results in January forecast 2020 earnings before interest and taxes of $A550.7 million, 10 per cent ahead of expectations, while also slashing debt, on the back of a strong Christmas in Australia and New Zealand.

Monday’s offer is subject to an independent expert concluding that the offer is “fair and reasonable”, but Jefferies analysts said CCEP was likely to seal the deal.

“We do not see a superior proposal emerging given the integrated nature of the franchise system,” the brokerage’s analyst Edward Mundy said.

CCEP said it would buy out 10.8 per cent of Coca-Cola’s stake in Amatil in cash, but has not yet made any decision on acquiring the rest.

 – AAP