Coca Cola Amatil (CCA) has surprised the market by deciding not to exercise its right to buy any of Foster’s spirits business.

CCA made the decision after looking at the books in a deal that would have cost an estimated $130-150 million.

The Foster’s spirit and ready-to-drink (RTD) business includes the Cougar, Black Douglas and Karloff brands.

It retains the options to buy the Australian non-alcoholic beverages business and Fiji Breweries and distillery in Fiji and Samoa in sales that it estimates would cost $50-70 million.

The options relate to CCA’s sale last December of its 50 per cent share of its Pacific Beverages joint-venture brewing operation in Australia and New Zealand to partner SABMiller, for $305 million.

By not buying the spirits business it expected to receive $34 million from SABMiller.

That payment would be used to develop its own alcohol growth plan, with a strong pipeline of new Beam products to be launched into the market over the next 12-18 months, CCA group managing director Terry Davis said.

CCA has a 10-year licence to distribute Jim Beam and Famous Grouse, Teachers and Galliano.

Morningstar Equities Research analyst Adrian Atkins said he was surprised by the decision as the company had previously indicated the Foster’s spirits business had attractive value.

The company recently booked an annual net profit of $591.8 million for the 2011 calendar year, up 19 per cent on the prior year.

Mr Davis said at the time he hoped the company would return to the beer market in Australia at the end of 2013.

Under the terms of the sale to SABMiller, it was restrained from selling, distributing or manufacturing beer in Australia until then.

The company’s shares were flat at $11.94 at 1545 AEDT.