* DRC eyes merger with Abu Dhabi Refreshments - statement
* No value of potential tie-up given
* Merger study to take "a few months"
* Latest tie-up between Dubai and Abu Dhabi
DUBAI, Dec 30 Dubai Refreshments (DRC)
said on Monday it would open talks with fellow PepsiCo
franchisee, Abu Dhabi Refreshments Company, about a possible
merger, in the latest example of United Arab Emirates rival
firms to consolidate.
Both companies are distributors of PepsiCo soft drinks and
snacks in the region. The merger was being looked at "as an
opportunity to create greater synergies for both the companies",
a statement to the Dubai bourse from DRC said.
No values were given in the statement. DRC has a market
capitalisation of around $300 million.
Should a merger happen, it will be the latest between firms
in Dubai and Abu Dhabi in the same sectors, as the UAE looks to
consolidate companies operating in the same sectors to create
larger companies that can compete better on a global stage, and
also as a way to support Dubai with cash as it faces repayments
on government-related restructured debt.
The merging of Dubai and Abu Dhabi's aluminium businesses
has already been announced, while a tie-up between the two
emirates' stock markets is being prepared.
The Dubai-Abu Dhabi Refreshments merger would differ from
the aluminium and bourse mergers because neither drinks company
Sheikh Ahmed bin Rashed Al Maktoum, the brother of Dubai's
ruler, is the largest shareholder in DRC with a 20 percent
stake, with three other local families holding more than 5
percent, according to Thomson Reuters data.
Fifty-nine percent of DRC is publicly listed, although the
stock is barely traded. Its shares were unchanged at 12.25
dirhams ($3.34) in Dubai, having last traded on December 12.
Abu Dhabi Refreshments Co is fully-owned by the Al Dahery
Group, according to Zawya, a Thomson Reuters unit.