just on Call: C&C aims to boost Irish beer market share with Gleeson deal - CEO
C&C will look to up its share in Ireland's beer market
C&C Group will aim to boost its share of the Irish on-trade beer market with the acquisition of the Gleeson Group, according to the company's CEO.
The deal, announced earlier today, will see C&C acquire Gleeson's for EUR12.4m (US$16m) giving its access to the group's nine-depot strong distribution network. During an investors' conference call today (22 November), CEO Stephen Glancey said: “We will look to extend Tennent's and Caledonian Smooth as it (the deal) will give us direct accesss to 4,000 pubs and allow us to grow share in the lager space.”
Analysts Nomura agreed, saying in a note: “We believe the deal significantly strengthens the company’s route to market and we see an opportunity for C&C Group to increase its share of Irish beer.”
Gleeson is Ireland's largest wholesale distributor, while C&C has a 2.5% share of the Irish beer market.
Glancey said the Irish drinks market model is “convoluted”, but that the Gleeson deal is “absolutely critical” in helping C&C suceed as Ireland's on-trade shows signs of recovery.
As a wholesale business, Gleeson counts Heineken and Diageo among its customers, mainly for packaged product. But a C&C representative said it "would like to think" it can retain the companies as customers.
Nomura branded the deal an “astute financial transaction”, calling it a “classic C&C value deal” with cost synergies expected of around EUR3m.
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