Blog: Chris Brook-CarterSearching for Prince Charming

Chris Brook-Carter | 17 August 2005

The chances of Carlsberg finding a willing suitor for a merger or takeover have often seemed as fanciful as a fairytale from that other great Danish name Hans Christian Anderson. Not only were the brewer’s financials unattractive, but also its unique share structure, where the charitable Carlsberg Foundation must hold a controlling chunk of the business, effectively blocks any attempt by the board to put together a deal.
 
As a consequence, while its rivals have gained scale and muscle through a series of mega-mergers and acquisitions, Carlsberg has had to make do with relatively small-scale bolt-ons and a power base confined to Scandinavia.
 
However, shares in Carlsberg have been gaining recently, a reflection not only of its improving economic position, but also of fresh speculation that the group may combine with one of its rivals.
 
In a recent interview, published in the UK’s Guardian newspaper, the chairman of Carlsberg’s supervisory board, Povl Krogsgaard-Larsen said: “Consolidation - that is a critical question. How can we live up to our charter and take part in consolidation?”
 
Krogsgaard-Larsen went on to say that the company was looking into loopholes in the company’s charter in order to see what its options are.
 
Should those loopholes be large enough to jump through, the Danish brewer has probably not looked this attractive to potential suitors for years. Earnings are up on the back of a successful cost-cutting programme, the Carlsberg brand is still one of the most recognisable around the world and, as this week’s acquisition in Cambodia suggests, the company is tackling its over-reliance on  mature Western markets.
 
On top of that you have Carlsberg’s jewel in the crown, its 50% stake in Baltic Beverages Holding. It is no surprise, therefore, that its BBH partner Scottish & Newcastle heads the list of most likely Prince Charmings.

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