Molson Coors buys Cobra Beer

Cobra Beer founder Lord Karan Bilimoria has bought the company in a joint venture with Molson Coors after entering the lager brand into a “pre-packaged” administration.

Accountants from PricewaterhouseCoopers were appointed as administrators last Thursday, saying that the company had run into financial difficulties during the economic downturn amid reports it had incurred losses of as much as £16m last year.

Under the terms of a “pre-packaged” administration, a sale is already agreed before the appointment of administrators and the deal is completed without the business going on the open market.

Molson put up £14m to pay off Cobra’s secured creditors to take a 50.1% holding stake in the new joint venture, with a new company controlled by Lord Bilimoria taking 49.9%.

Recent weeks have seen a large number of Cobra staff being made redundant as Lord Bilimoria prepared for the sale.

Of the decision to enter pre-packed administration, Lord Bilimoria said it was the culmination of “a long and thorough process whereby we explored a variety of options to maximise value for our creditors and stakeholders.”

Cobra will now be produced at Molson Coors’ sites in the UK.

Alan Lodge, 01.06.2009