A dark horse waiting in the wings

Anadolu Efes has positioned itself for a key role in future brewing industry consolidation.

Whenever a new chapter of beer sector consolidation looks to be frothing up, it is the usual suspects who are bandied around as potential buyers - just ask SABMiller.

Yet, last week's full-year results from Turkey's Anadolu Efes shows that, while less glamorous, the company could be doing more than making up the numbers on the global brewing scene.

Anadolu reported a 36% jump in net profits for the 12 months to the end of December.

During the period, the company reduced net debt by almost a quarter, to TRY783m (US$518.6m) from TRY1.1bn at the end of 2008. That gives the firm an envious net debt to EBITDA ratio of just 0.9 times.

Last week, Anadolu Efes stumped up US$287m to raise its stake in foreign beer arm Efes Breweries International (EBI). More than half of that amount came from the firm's pile of more than TRY1bn in cash reserves.

"Securing full control of EBI provides Anadolu Efes greater operational flexibility for organic and inorganic growth," said Anadolu Efes.

It is the inorganic growth that intrigues us most.

However, while Anadolu Efes may have the resources, the opportunities for acquisitions remain hazy at the present time.

EBI sells three quarters of its volumes in Russia, where it has a 9% market share. It is thought that the company was last year sniffing around Sun InBev, the Russia and Ukraine arm of A-B InBev.

But, A-B InBev is no longer under financial pressure to dispose of assets and a three-fold tax rise on beer in Russia may be a turn-off - at least until it becomes clear how the policy will affect sales.

Talk of further consolidation in the beer sector remains flimsy for now, but consider Anadolu Efes' card as marked when the time comes.