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C&C Group announces £180 million deal with AB InBev
C&C Group has entered into a conditional agreement with Anheuser-Busch InBev to acquire its businesses in Ireland, Northern Ireland and Scotland. The £180 million deal includes the acquisition of Tennent’s, the Scottish lager brand.
Other AB InBev assets set to be handed over to C&C include The Well Park Brewery in Glasgow, an on-trade loan book of approximately £27m, as well as distribution rights to certain AB InBev brands across Ireland, Northern Ireland and Scotland, including Stella Artois and Beck’s.
Tennent’s currently accounts for 55% of lager volumes sold in the Scottish on-trade, while in Northern Ireland the brand holds approximately 25% of the on-trade draught lager market.
For C&C, this acquisition forms the platform for developing its existing business, with the opportunity to strengthen the position of its Magners cider brand outside its core market, while at the same time creating a more diverse portfolio in the Irish market. In its trading statement for the five months to the end of July 2009, C&C experienced a revenue decline of 5% on a constant currency basis compared with the same period last year.
As a result of this strategic partnership between the two companies, C&C expects to deliver cost savings and revenue synergies of £10m per annum by 2012, benefiting from an estimated £5m in annual pre-tax cost savings.
Commenting on the deal, Tony O’Brien, chairman of C&C, said: “This acquisition is an evolution of our stated strategy and clearly enhances the group’s position in the long alcoholic drinks sector. Tennent’s is a renowned Scottish brand, which, combined with our leading market position in cider, represents an attractive growth opportunity for the group.”
Carlos Brito, CEO of AB InBev, outlined his own company’s motivation behind this step, explaining: “The sale of these assets will unlock value for our shareholders and ensure continued support for our global brands in the region through distribution agreements with key partners.”
The acquisition remains conditional upon clearance by the Irish Competition Authority and the outcome of an employee consultation process. AB InBev employs around 300 people across the regions involved in this deal.
Gabriel Savage, 27.08.09