CANADA: InBev lines up Lakeport purchase
Brewing giant InBev is set to snap up Lakeport Brewing Co. in Canada.
The world's largest brewer by volume said today (1 February) that its Labatt Breweries arm has signed a deal with Lakeport Brewing Income Fund to buy the brewer for around C$201.4m (US$171m).
The total amount equates to C$28 per share and Lakeport's trustees have unanimously recommended the offer.
Miguel Patricio, zone president for InBev North America, said: "Lakeport has had great success growing their brands in the value segment of the highly competitive Ontario beer market.
"This announcement demonstrates our commitment to growing Labatt in Canada and ensuring that our consumers have as much choice as possible across all beer segments."
Based in Ontario, Lakeport's beer brands include Lakeport Honey Lager and Lakeport Pilsener.
The brewer has been successful in the province in recent years through its strategy of proce discounting. In May, last year, Lakeport announced that it would sell its flagship brands at 1992 beer prices throughout the summer.
Mark Swartzberg, an analyst at US bank Stifel Nicolaus, said: "We consider the transaction a positive for competitive dynamics in Canada because value-beers have been a source of significant margin and volume pressure to mainstream and premium brands such as Labatt Blue and Molson Canadian."
Lakeport controls around 10% share of Ontario's beer market, which accounts for around 35% of beer sales in Canada.
Lakeport shareholders should receive details of the offer later this month, InBev said.
Separately, InBev also said that it will launch a share buy-back programme for an amount of up to EUR300m (US$390m). The programme will run until the end of October, the company said, and may be renewed thereafter.
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