C&C, the drinks group with Bulmers in Ireland and Magners ciders in the UK under its portfolio, has struck a deal with Asahi UK, the British arm of the Japanese beer brand, to acquire its wholesale interests in the United Kingdom for “nominal consideration”.
C&C will now take over “all customer and supplier relationships” Nectar Imports has, the brand’s intellectual property and “certain assets” such as stock, vehicles and a depot, the company said in a statement.
The business “will be fully integrated” into C&C’s Matthew Clark Bibendum (MCB) operations, which will “enter into a long-term business partnership associated with Asahi brands in the UK”.
The company, which also owns Jubel beer and Tennent’s lager, said terms of the Asahi acquisition have been agreed and it will be completed by early October, “after which a structured programme of customer transfer will take place.”
C&C’s chief executive, Roger White, said this “represents an attractive opportunity to provide a significant number of new customers with MCB market leading service and range proposition whilst simultaneously delivering immediate scale and efficiency into the group’s operations”.
“We expect the majority of the customer and supplier transitions to be completed in the coming weeks, and for the acquisition to make a small positive contribution to the overall financial performance of MCB” in the coming final year, he said.
With the acquisition announcement made early Friday morning, the group’s stock on the London Stock Exchange’s FTSE All-Share Index rose over nine per cent by midday.
The group said trading for the six months leading up to the end of August “has been in line with expectations”, noting a three per cent fall in net revenues compared to last year and a two per cent rise in branded revenues offset by a four per cent decline in distribution revenues.
“Branded revenue growth was supported by continued momentum in our core Tennent’s and Bulmers brands, favourable weather and targeted marketing activity around the World Cup period,” it said.
The decline in distribution revenue “was principally driven by the planned exit of some lower margin customer business, combined with the continued impact of ongoing market decline in outlet numbers and certain drinks categories,” it added.
It forecast an underlying operating profit between €43 and €44 million, also “in line with our expectations”.
“We remain on track to achieve full year operating profit in line with market expectations, albeit noting that the market conditions remain volatile and we have the important Christmas trading period ahead of us,” it said.