American Molson Coors buys Bergenbier’s owner for EUR 2.65 billion

Romanian beer producer Bergenbier changes ownership after American Molson Coors Brewing Company (NYSE:TAP; TSX) has announced today that it has acquired StarBev from CVC Funds for EUR 2.65 billion (USD 3.54 billion).

Headquartered in Amsterdam and Prague, StarBev operates nine breweries in Central and Eastern Europe (CEE), including Romania, where it owns beer company Bergenbier S.A.

StarBev generated 2011 sales of approximately EUR 0.7 billion (USD1.0 billion) and earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 241 million (USD 322 million).1 The purchase price represents a multiple of approximately 11x EBITDA, according to Molson Coors representatives.

“The acquisition of StarBev fits squarely into Molson Coors’ strategy to increase our portfolio of premium brands and deepen our reach into growth markets around the world,” said Peter

Swinburn, president and CEO of Molson Coors. “The Central and Eastern European beer market is attractive, with strong historical trends and upside potential as the region returns to its pre-economic-crisis growth rates. StarBev, as a market leader in the CEE region, provides Molson Coors with a great platform for growth and an excellent foundation from which to extend our key brands, such as Carling, into Central and Eastern Europe. Staropramen, StarBev’s international flagship brand, will also enhance our portfolio in some of our current and planned markets,” he added.

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StarBev, which employs approximately 4,100 people, has brewing operations in the Czech Republic, Serbia, Croatia, Romania, Bulgaria, Hungary, Montenegro and also sells its brands in Bosnia-Herzegovina and Slovakia. It brews 13.3 million hectoliters annually and holds a

top three market share position in each of its markets. Starbev’s portfolio of more than 20 brands includes local champions such as Borsodi, Kamenitza, Bergenbier, Ozusko, Jelen and Niksicko and also distributes brands such as Stella Artois, Beck’s, Hoegaarden, Lowenbrau and Leffe under license.

Molson Coors representatives say that following the acquisition, the company expects that significantly more of its revenue will come from growth and emerging markets. “The CEE markets are expected to benefit from positive volume and per capita consumption trends over the long-term,” reads the company’s press release.

Molson Coors also expects the transaction to be accretive to earnings in the first full year of operations and to generate approximately USD 50 million of pre-tax operational synergies by 2015, primarily through production efficiencies, procurement, systems and related areas.

The transaction is subject to approval by certain European competition authorities and is expected to close in the second quarter of 2012. Following the close, StarBev will be operated as a separate business unit within Molson Coors and will remain headquartered in the Czech Republic.

Molson Coors Brewing Company’s main markets are in the US, Canada and UK. It owns or distributes beer brand such as Miller, Carling and Corona.

Simona Bazavan