COORS TO BUY CARLING

Adolph Coors Co. agreed to purchase the Carling
division from Interbrew SA for $1.7 billion, in a deal
that gives Coors one of the leading beer brands in
Britain and turns a backwater no. 3 Colorado brewer
into a global player. The deal was announced on
Christmas Eve.

BBD readers remember that British regulators in
September demanded that Interbrew sell some of its
assets in order to allay competition concerns stemming
from the Belgian company’s $3.3 billion acquisition of
Bass Brewers last year. Carling, the U.K.’s
second-largest brewer, manufactures the country’s
top-selling Carling lager.

Coors will acquire the majority of the assets of Bass
Brewers, including the Carling, Grolsch, Worthington,
and Caffrey’s beer brands, related brewing and malting
facilities in the U.K. and a 49.9% stake in the
logistics provider Tradeteam (distributor).

Peter H. Coors, chairman of Coors Brewing Co. said,
“The acquisition of the Carling business significantly
increases the size of our company and broadens and
diversifies its revenue base … We intend to leverage
the strengths of both the Coors and Carling
organizations to grow market share, profitability and
cash flow.”

Leo Kiely, Coors Brewing’s president and chief
executive, said the purchase will boost operating cash
flow … and “significantly” enhance earnings per
share longer term.

Coors also said the Carling and Grolsch brands both
have strong growth momentum and are gaining share in
the U.K., and should enable the company to improve its
performance in both North America and Britain.

Interbrew said it has no plans to grow what remains of
its share of the U.K. beer market through acquisitions
following the sale of Carling, according to spokesman
Corneel Maes. Interbrew will instead focus on
restructuring its remaining U.K. operations and
concentrate on growing the business organically, Mr.
Maes said.

Interbrew still needs the approval of the Carling sale
from the Office of Fair Trade.

By selling Carling, Interbrew retains Bass operations
in Scotland and Ireland as well as the rights to the
Bass Ale and Tennent’s brands. These brands are seen
complementing its premium brand, Stella Artois, which
is selling well in the U.K. market.

The regulator’s decision on the sale is expected by
early February. If approved, Interbrew would retain a
16% share of the U.K. beer market, while Coors would
find itself with a 9% share.

Interbrew also expects to review its decision to write
down 1.2 billion euros ($1.06 billion) in goodwill
related to the Bass acquisition, following the U.K.
regulator’s decision to contest the sale.

The purchase by Coors is subject to regulatory
approval in the United Kingdom, but the companies
anticipate completion of the transaction by February.