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Coors buys Carling
No. 3 in the U.S., Colorado brewer now No. 2 in Britain
Dec 26, 2001 - Colorado's Coors Brewing Co. has won the bidding war against Dutch brewer Heineken for Belgian Interbrew's U.K.-based Carling Brewers. Coors, the No. 3 brewery in the U.S., acquired Carling for $1.7 billion from Interbrew. The acquisition surprised analysts who viewed Heineken as the favorite in the bidding war.
Coors' purchase includes four breweries in England, the U.K.'s top selling beer Carling, together with Caffrey's, Stones and Worthington brands. The deal gives Coors a 19% share of the U.K. market, second to Scottish and Newcastle. The company expects to borrow all but $200 million of its purchase price and expects the acquisition would provide a modest boost to profits in the short term. Peter Coors, chairman of Coors, said the deal presents the brewery giant with an opportunity to grow market share, profits and cash flow in the U.K. -- one of the largest beer markets in the world. "We anticipate that the purchase will substantially increase our operating cash flow, modestly improve cash earnings per share in the short term and significantly enhance earnings per share longer term," said W. Leo Kiely, Coors' president and CEO. Coors was able to buy Carling because Interbrew was ordered to divest by British regulators after its $3.3 billion acquisition of Bass Brewers, Britain's No. 3 brewer. Rob Klugman, senior vice president of corporate development for Coors, said the brewery has no plans to market Carling brews more aggressively in the U.S. Coors is simply trying to get a bigger piece of the British market. Klugman added that Carling's export business is "relatively minor."
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