C&C Group open to beer acquisitions as further consolidation looms - Exclusive

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C&C Group has maintained that it remains strongly-placed to participate in the current round of consolidation in the beer industry, despite lining up a sizeable share buyback plan in the coming months.

C&C Group acquired Tennents from Anheuser-Busch InBev in 2009

C&C Group acquired Tennent's from Anheuser-Busch InBev in 2009

Having returned EUR115m (US$130.9m) to shareholders in the 12 months to the end of February, C&C intends to break EUR130m in share buybacks between now and the end of June. Speaking to just-drinks following the release of the group's full-year results this morning, CFO Kenny Nelson said the buyback plan was due in part to the high prices expected of previously-available brewing assets.

"We wouldn't say that share buybacks are the best use of deploying capital," Nelson admitted. "But, looking at the potential stuff we could acquire, a feature of the market has been that things have been overpriced. Also, we've not found anything to tick the right box for us, strategically. So, we've ended up with share buybacks becoming the most attractive option in the short- to medium-term."

Anheuser-Busch InBev's acquisition of SABMiller, which is expected to complete later this year, has already resulted in several SAB assets being put up for sale. Late last month, the brewing giant confirmed its intention to divest SAB's total presence in Central and Eastern Europe.

"There's no doubt that the current round of consolidation will lead to transaction opportunities," Nelson told just-drinks today. "We have been quite conservative in managing our balance sheet, which would allow us to take advantage of the right opportunities that could come along. But, that doesn't mean we will overpay for assets. With Eastern Europe, you'd have to question what C&C could do with an investment in those markets: Could we add incremental value for our shareholders?"

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C&C's net debt to EBITDA ratio finished the fiscal year at 1.3x. CEO Stephen Glancey highlighted that the ratio stood at 2.5x at the time that the group bought Constellation Brands' The Gaymer Cider Co for US$75m in late-2009.

"We've got the firepower for acquisitions should they be available and should they generate long-term returns," Glancey added. "Once the SABMiller purchase is finalised, we are decently poised to exploit opportunities. It might not be a business, it might be a brand - we'll see."

In 2009, C&C acquired the Tennent's beer brand after former owner InBev committed to selling $7bn of strategic assets having spent $52bn on buying Anheuser-Busch Inbev in 2008.

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