just-drinks.com editor's weekly highlights
In This Issue...
There is little doubt which story has fired the imagination most this week. Carlsberg’s announcement that it is looking to change its charter has caused quite a stir, and with good reason. The company’s shake-up of its share structure suddenly places the Danish brewing giant firmly in the game when it comes to mergers and acquisitions.
The Carlsberg Foundation currently holds 51.3% of Carlsberg’s share capital. The company is hoping to reduce that to 25%, thereby freeing up as much as US$8.5bn, should the brewer desire.
Chief executive Nils Smedegaard Andersen says his company has no immediate plans to raise new capital. But few doubt the motives behind this move.
"A Carlsberg and Scottish & Newcastle deal that is politically acceptable in Denmark now finally seems possible," analysts at Dresdner Kleinwort said. Meanwhile, London-based broker Cazenove stated: “This is a highly significant move which, in our view, is primarily designed to allow Carlsberg to merge with, or bid for, Scottish and Newcastle in due course."
Carlsberg and S&N already have strong ties. The two brewers are in a joint venture in Eastern Europe called Baltic Beverages Holdings. The fast-growing business, primarily based in Russia, accounts for more than 40% of Carlsberg's profits and the Scandinavian group may well have felt it had to protect its investment there when stories began circulating recently of discussions between Diageo and SABMiller of a joint bid for S&N.
Smedegaard Andersen has already said Carlsberg would be interested in buying S&N's stake in Baltic Beverages Holding. However, its highly unlikely S&N is going to let that jewel go, making a merger of the two groups far more likely.
Whatever Carlsberg’s next move, the brewer now sits in a position of strength, armed with a potential multi-billion dollar war chest, but protected from takeovers itself by the fact the foundation will still control 51% of the voting rights.
Meanwhile, the month of May is almost upon us, and with it the London International Wine & Spirit Fair. Some of you may remember last year, when we ran a daily diary piece (like this one) on who is planning to do what at the three-day event. Well, we’re going to do it all over again this year, starting from tomorrow (1 May). So, if you’ve got something planned for the event, or you’d like us to drop by ourselves and say hello, then get in touch. Email us , and we’ll make sure to cover all the fun of the fair.
May, incidentally, also brings the Champions League Final – but I don’t want to talk about that.
Until next time...
Olly Wehring, Managing Editor
The decision by Constellation to sell half of its UK distribution company Matthew Clark to Punch Taverns and form a joint venture with the pub retailer has left many in the industry scratching their heads. Chris Losh searches for the rationale behind the deal.
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