When Carlsberg & Heineken finally agreed to pay Scottish & Newcastle’s asking price of $15.4 bil (after protracted wrangling), it was easily biggest global beer buy yet in terms of money changing hands. The 2 cos will split S&N’s near 50 mil bbls (including prized half stake in BBH). Takes #6 global brewer off the table. Deal expected to close in a few mos. And so global consolidation continues as key trend of 21st century. Several hundred million barrels added to top 5 brewers’ totals in last 5 yrs, between deals and growth. That’s over 20% of global volume. Top 5 about half of global biz now, less than 1/3 5 yrs ago. Including deals announced but not yet closed, each of InBev, SAB, Heineken & Carlsberg have approximately doubled in last 5 yrs (InBev 2.5x). Brewers count bbls in different and confusing ways (especially their stakes in other brewers), but any way you cut it, AB hasn’t kept pace. It’s up about 25%+ same period. AB fell from #1 to #3 globally by volume. With latest deal, Heineken volume total also moves considerably closer to AB. Heineken now will become #1 in tuff UK mkt.
As for Carlsberg, it becomes much more of a player as it grabs full control of 50-mil-bbl BBH. BBH earned $1.1 bil in EBITDA in 07 and is projected to make $1.5 bil by 2010. Yet Carlsberg still considerably smaller than top 4 globally (almost 50 mil bbls smaller than #4 Heineken). Brewers ranked behind Carlsberg are only about half its post-acquisition size. They each have significant but non-controlling partners. Molson Coors (working to consummate US JV with SABMiller), Modelo (50% owned by AB) and Tsingtao (AB stake 27%). Many recent articles and analyst reports speculated on other possible deals between megabrewers, especially involving InBev. But most remaining large independent brewers subject to some form of family control. Besides, after being on tear for yrs, InBev and SABMiller stocks took hit recently. That could constrain their dealmaking. Finally, fate of Newcastle Brown in US unannounced at presstime. Many presume it will go to Heineken USA. But HUSA prexy Don Blaustein said Feb 1: “It is premature for us to have any comment on what will happen with the S&N brands.”
Heineken/Carlsberg Buy of S&N Is Biggest Global $$ Deal Yet; Massive Landgrabs Since 02
Publishing Info
- Newsletter: Beer Marketer's INSIGHTS
- Published: 02/10/2008
- Volume: 39
- Issue #: 3