Comment - Anadolu Efes high on suitors' shopping lists

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Anadolu Efes is an attractive proposition for international suitors, but analysts are cautious on speculation that the brewer's management could sell the business.

Anadolu Efes denied today (26 November) that it is in talks with Japan's Asahi Breweries over a potential sale of its business. Following a report in Turkey's Hurriyet Daily newspaper, which quoted a named Asahi adviser as saying that the two companies were holding talks, the Turkish firm said: "Anadolu Efes maintains its intention to further strengthen and grow its existing operations by itself.

"In that respect, there is no such talk or negotiation between Anadolu Efes and Asahi and/or another third party representing Asahi," said the group.

It is unclear from the Asahi adviser's comments in Hurriyet whether the Japanese brewer is seeking to buy the Efes beer brewer outright or form some kind of tie-up with the company in order to gain better access to the Turkish beer market. Asahi could not be reached by just-drinks to clarify the remarks at the time of writing.
Analysts largely reacted with caution to the report. One analyst told just-drinks that he does not believe that Anadolu Efes will sell up, but he added that the company has a growing list of admirers. 

"Efes is highly popular when it comes to acquisition targets and, because they recently bought all the shares in their international business EBI, some suggest that they may be selling pieces or the whole company," he said. 

Anadolu Efes said itself today that its "successful beer operations attract [the] interest of several companies". The group claims to have an 89% volume share of Turkey's beer market, while it is the fourth largest brewer in Russia. It also bottles The Coca-Cola Co's soft drinks in Turkey and its Coca-Cola Icecek business has strong positions in several countries, including Pakistan, Kazakhstan and Azerbaijan.

Contrary to some multinational brewers, Anadolu Efes has maintained solid sales momentum so far in 2010. Beer sales rose by 9% in volume terms for the nine months to the end of September, despite a drop in Turkey due to tax hikes. Soft drinks volumes rose by 12% for the period. Group net sales increased by 7% on the same period of 2009, to TRY3.2bn (US$2.1bn), and net profits leapt by 20% to TRY496.6m.

What's more, the group is carrying low debt, with a net debt to EBIDTA ratio of 0.8 at the end of September. In the past, this has made the group a contender for overseas acquisitions. It is believed, for instance, to have enquired about Anheuser-Busch InBev's Sun InBev business in Russia and Ukraine last year.


Now, it appears that the company is attracting as much attention as it is giving.

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