Drinks group C&C is buying Anheuser Busch's operations in Ireland, Northern Ireland and Scotland for €205m. The news sent its shares 15% higher in Dublin.
The main brand is Tennent's lager, but C&C will also secure the distribution rights for global brands like Stella and Beck's as well as Budweiser in Scotland and Northern Ireland.
The company said the deal will be financed from a combination of its own cash resources and existing bank facilities. It added that it expects the deal to be immediately earnings positive. It is subject to shareholder approval, regulatory consent and employee consultation.
Under the terms of the deal, C&C is buying the Wellpark Brewery in Glasgow and an on-trade loan book of about £27m.
The business generated net sales of £162m sterling in the year ended December 2008. It employs about 300 workers in Ireland, Northern Ireland and Scotland.
C&C said it believes the deal represents a 'logical' platform to develop its existing business, with potential to increase the position of its Magners cider brand outside its core UK market. It added that it is 'both strategically and financially attractive'.
'Tennent's is a celebrated brand and is a compelling strategic fit for the group to develop alongside Magners in Scotland and Northern Ireland,' commented C&C's group chief executive John Dunsmore.
'This a great opportunity to strengthen our route to market and broaden our product portfolio by combining our cider brands with some of the world's leading beer brands,' he added.
Tennent's is Scotland's leading lager brand where it accounts for 55% of volumes of lager sold to the Scottish pub trade and around 30% of the Scottish off-licence trade. It has about 25% of the pub lager trade in Northern Ireland.
Trading statement reports 5% fall in revenues
C&C also issued a trading statement for the five months ended July 2009 this morning. It said that revenues fell by 5% in the five month period on a constant currency basis. This fall was made up a decline in cider revenues of 4% and a decline in spirits and liqueurs revenue of 22%.
In Ireland, Bulmers cider volumes rose by 3% against the backdrop of a weak market and a challenging economic environment. In the UK, Magners cider volumes edged 1% higher.
C&C said the performance of the cider business in the first five months of 2009 is 'encouraging' and added that it has taken a series of steps to stabilise performance and to better position for growth in Ireland and the UK.
It said its guidance for operating profits for the year ending February 2010 will be at the top end of its previously stated range of €77-82m. This is before taking into account the impact of the proposed acquisition of the Irish, Northern Ireland and Scottish businesses of Anheuser Busch, it added.
C&C shares closed up 35 cent at €2.58 in Dublin, a gain of 15.7%.
