August 27, 2009 - C&C Group plc (“C&C” or the “Company”), a leading manufacturer, marketer and distributor of branded alcoholic beverages in Ireland and the UK, today announces that it has entered into a conditional agreement to acquire the businesses of Anheuser-Busch InBev (“ABI”) in Ireland, Northern Ireland and Scotland (the “Business”) for a total consideration of £180 million (approximately Eur 205 million) (the “Acquisition”).
The Acquisition will be financed from a combination of the Group’s own cash resources and existing bank facilities.
The Directors expect that the Acquisition will be immediately earnings accretive on a pro forma basis and will generate a return on invested capital that will exceed the Group’s weighted average cost of capital in the first full financial year following the Acquisition. The Acquisition is subject to Shareholder approval, regulatory consent and employee consultation.
Scope of the Acquisition
The assets of the Business being acquired include:
Tennent’s, Scotland’s leading lager brand;
The Wellpark Brewery in Glasgow;
An on-trade loan book of approximately £27 million; and
Distribution rights to certain ABI brands in Ireland, Northern Ireland and Scotland, including Stella Artois and Beck’s, as part of a strategic partnership with the world’s largest brewer.
Tennent’s Lager is Scotland’s leading lager brand where it accounts for 55 per cent. of volumes of lager sold to the Scottish on-trade and around 30 per cent. of the Scottish off-trade. The Business is the leading brewer in Scotland by volume brewing Tennent’s brands and also producing and selling the Stella Artois brand, which has a 5 per cent. volume share of on-trade lager in Scotland. In Northern Ireland, Tennent’s brands have approximately 25 per cent. of the on-trade draught lager market.
The Business generated Net Sales of £162.21 million and EBITDA of £21.82 million in the year ended 31 December 2008. It employs approximately 300 employees in total in Ireland, Northern Ireland and Scotland.
1 Financials have been taken from the carve-out financials for the Business and have been prepared according to C&C’s accounting policies. The figures include various normalisation adjustments which have been further detailed in section 5 of the full announcement. The carve-out financials will be included in the Shareholder circular.
2 See footnote 1. In addition, EBITDA is net of the royalty payment to ABI for sales of ABI brands.