Beer: Scottish & Newcastle, SABMiller, and Grolsch
More and more consolidation in beer.
After the announcement of the US joint venture between SAB Miller and Molson Coors. Soon after, Dutch brewer Heineken and Danish brewer Carlsberg made a hostile bid to take over the UK's #1 beer maker, Scottish & Newcastle (S & N). S & N has a 25% market share in the UK, along with some foreign ventures in Europe and Asia.
Carlsberg would get full control over its Russian joint venture with S & N, Baltic Beverages Holding (BBH), while Heineken would get control over the UK brands. BBH is one of the fastest growing beer businesses in the world.
S & N management has summarily spurned the offer, even when a second bid of $14.3 billion. In fact, it is looking for a "white knight" to take it over. SABMiller and Anheuser Busch are being suggested for that role.
S & N, in a move disrupt the deal, announced it intended to buy full control of BBH, declaring it can no longer work with Carlsberg, It also just announced it would sell its money-losing French unit (which makes Kronenbourg beer), to C10, a French beer distributor, for 85 million pounds (around $160 million)..
Meanwhile, SABMiller has made a $1.2 billion Offer for Dutch brewer Grolsch, a venerable 392-year-old brand. Why the buy? According to a Financial Times article ("UK brewer takes its time in acquiring a premium brand", 11/20/07), the reasons are fourfold
First, the historic Grolsch brand, with its distinctive flip-top bottles, is a valuable addition to SABMiller's small holdings of international premium brands, which include Pilsner Urquell, Peroni and Miller Genuine Draft….
Second, the brewer has a big hole in its South African portfolio after losing the rights to market and distribute the Amstel brand, owned by Heineken, in the country this year…
Third, Grolsch will provide SABMiller with additional brewing capacity. SABMiller has claimed that it cannot make enough beer in Eastern Europe to keep up with demand, and so is investing in expanding its operations in Russia and Poland…
Finally, SABMiller believes it can learn from Grolsch's bottle designers.
In addition, there is background talk of negotiations between InBev and Anheuser-Busch, the world's two largest brewers.
