UK: C&C Group buys Gaymer Cider Co from Constellation

C&C Group has agreed to acquire Constellation Brands' UK cider division, The Gaymer Cider Co, for GBP45m (US$75m) in cash.

The deal, announced today (30 November), will see the Gaymers, Blackthorn and Olde English cider brands join Magners in C&C Group's UK portfolio.

The Ireland-based group will also acquire a cider production facility in Shepton Mallet, based in Somerset in southern England, and a nearby distribution warehouse in Bristol.

"This transaction strengthens our position within the world's largest cider market and broadens the scope of the group's existing cider offering," said C&C Group CEO John Dunsmore.

Gaymer Cider Co had net sales of GBP64m in the year to the end of February 2009, with volumes of 1.5m hectolitres - around twice that of Magners. It employs 250 people and has an asset value of around GBP43.5m.

C&C Group added: "It also increases the Group's channel weighting towards the off-trade to better reflect the channel split of the overall UK cider category and significantly enhances the group's route to market."

Around 80% of Gaymers cider sales by volume are through the off-trade in the UK, which is predicted to grow faster than the on-trade over the next year.

C&C Group expects the deal to enhance earnings in its current fiscal year, which runs to the end of February 2010.

For Constellation Brands, the deal forms part of a reorganisation of its UK business.

C&C Group said it expects the deal to be complete by mid-January 2010, pending a review by the Office of Fair Trading.

Earlier this year, Ireland-based C&C Group bought the Tennent's lager business from A-B InBev in a deal worth GBP180m.

For an in-depth article on the deal, following the group's conference call, click here.