Coors Buys Carling for $1.75B
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GOLDEN, Colo. _ Adolph Coors Co. said Monday it will acquire the British brewer Carling in a $1.75 billion deal that company officials said would help America’s No. 3 brewer gain ground overseas.
As packaged-goods businesses around the world continue a rapid trend of consolidation, Coors realized that the bulk of its business was based on products from Colorado and it needed to diversify, said Rod Klugman, senior vice president for development, said in an interview.
``It makes sense for us, if we find opportunities, to play this game smartly,″ he said. ``And we found one.″
Interbrew SA, the Belgian brewer of Stella Artois, Labatt’s and Rolling Rock, agreed to sell Carling to Coors as part of its own expansion. British financial authorities demanded the sale before they will approve Interbrew’s $3.3 billion acquisition of Bass Brewers.
The Coors-Carling deal still needs regulatory approval. Company officials expected the deal to close in February.
Klugman said the acquisition of Carling, the No. 2 brewer in the United Kingdom, would be Coors’ first major step toward global consolidation. ``Our sales outside North America are quite small now,″ he said.
Klugman said Coors products sell well in Canada, Ireland and Japan, but the company is seeking greater exposure elsewhere.
``We intend to leverage the strengths of both the Coors and Carling organizations to grow market share, profitability and cash flow,″ Coors Brewing Co. Chairman Peter Coors said in a statement.
Klugman said Carling’s export business is very small, but the company overall is relatively more profitable than Coors, which reported third-quarter earnings of $38.9 million on sales of $634.7 million.
The sale would be a major step forward for Interbrew in its development as one of the world’s biggest beer makers.
It agreed in August to pay $1.6 billion for Germany’s makers of Beck’s beer, making it the No. 2 brewer in the premium lager market, behind the Dutch company Heineken. Last May Interbrew snapped up Whitbread’s beer interests for $576 million.
Coors Brewing Co. President and Chief Executive Officer W. Leo Kiely said Coors’ customers in the United States would see few changes.
``We need to outgrow the market, drive down our cost per barrel and continue building a great team,″ Kiely said in a statement. ``The Carling business and the Carling people will make us a larger, stronger, more diversified and more competitive player in the global beer business.″
It would not be Coors’ first holding overseas. In 1994, the company bought a Spanish brewery and entered in a joint venture for a Korean brewery.
Coors shares closed at $56.29, down $2.98, Monday on the New York Stock Exchange.
Interbrew SA: http://www.interbrew.com