Home' Brewers Guardian Digital Magazine : September 2013 Contents T
here’s no subtle way to put it: I’m not a fan of writing about
nothing. Where’s the appeal in writing – or, even worse, read-
ing – an article that is basically about nothing at all? So, when
I was asked to take a look at merger & acquisition activity in
the global brewing industry in recent months... well, my worst fears
came close to being realised.
While many industry observers seem to be saving themselves for
the so-called ‘mega-merger’ of Anheuser-Busch InBev and SABMiller
a deal, we are regularly told, that is as inevitable as night following
day - the landscape for the multi-national brewers today seems pretty
much identical to the landscape a year earlier.
While 2012 had the odd piece of colourful M&A movement – A -B
InBev taking full control of Mexico’s Grupo Modelo, Molson Coors
snapping up StarBev in Eastern Europe, Heineken finally getting hold
of its partner’s stake in JV Asia Pacific Breweries – 2013 has (so far)
been a year in which the big five have busied themselves in keeping
their respective powder pots dry.
That’s not to say, however, that A-B InBev, Carlsberg, Heineken,
Molson Coors and SABMiller have spent the last nine months peering
out of their shells.
The biggest of the big boys has had one eye on the recent past
and another on the future in 2013. A-B InBev’s battle with the US
authorities to get its purchase of Modelo through was a long, drawn-
out affair. The US$20.1 billion acquisition of the 50% of Modelo
that it did not own took longer to complete than most observers
expected, with the US Department of Justice holding out for an array
of concessions from the company. One can forgive the behemoth
for stopping to take an M&A breather, then. Meanwhile, with the FIFA
World Cup set to take place in Brazil next year, you’d expect A-B
InBev – through its football-friendly Budweiser brand and with AmBev
the muscular market leader – to spend its time preparing for what
should be a bumper 2014.
SABMiller has also had other fish to fry: although the company had
announced in April last year that CEO Graham Mackay would step
down in the July of this year, when Mackay was diagnosed in April
this year with a brain tumour, the transition to new CEO Alan Clark
was brought forward by three months.
That’s hardly the ideal backdrop for buying/selling/merging, is it?
A few of us got quite excited back in February, when SABMiller and
Molson Coors – partners in the US with MillerCoors, of course – had
a falling-out north of the border. When SABMiller’s Canadian subsid-
iary announced its intention to terminate the licence agreement with
Molson Coors in the country, it appeared that there was trouble in
When Molson Coors counter-sued SABMiller over the matter, the
writing was on the wall, surely. Add to the spat the fact that the
MillerCoors partnership was fast approaching its fifth anniversary
triggering the end of an agreement not to transfer their voting or
economic interests – and conspiracy theorists started to get quite
As time has told, however, MillerCoors remains very much a going
concern, with both brewers keen to pledge their commitment. So
much for theories, then.
Of course, there are always exceptions that prove the rule. In
February, SABMiller looked east, spending what one analyst called
an “eye-watering” US$864 million for China’s Kingway Brewery
Holdings. The purchase raised eyebrows, primarily due to the price
tag, but untapped capacity and a healthy distribution footprint proved
enough to turn SABMiller’s head.
ruMours oF wAr
An unusual lull in the seemingly never-ending cycle of brewing industry
M&A activity has guest columnist olly wehring asking: what’s next?
And what of our European cousins? Well, Carlsberg is the only
other major brewer to have splashed any sizeable cash in 2013, but
even that was to consolidate an existing stake. In March, the Danish
company upped its holding in China’s Chongqing Brewery to 60% at
a cost of around US$462m. As a step towards securing a broader
footprint in the country, Carlsberg’s Chinese move also showed that
bolt-on buys have become the European firm’s M.O.
Finally, Heineken can be forgiven for taking its M&A ball home,
for the time being. The fight to secure full control of Asia Pacific
Breweries last year was pretty horrific with Chang brewer ThaiBev
trying pretty much everything it could to spoil the party. We’ll forgive
the Dutch company a pause for thought following its Asian adventure
So, is the relative silence on the M&A front in 2013 a collective
catching of the breath after a lively few months, then, or are the big
boys having a mini-consolidation moment? Would it be fair for me to
argue for both? After all, no-one wants to be known for driving growth
solely through inorganic means – that’s not a particular talent that
gets recognised too widely for too long.
The rest of this year – and most of next – will see the multinational
brewers focussing on driving synergies and making the most out of
what will hopefully be a fertile beer-selling ground for all.
Once the dust has truly settled, however, thinking here of
Martin Sheen as President Bartlett in television’s The West Wing,
I fully expect to see A-B InBev, Carlsberg, Heineken, Molson Coors
and SABMiller ask: What’s next?
Olly Wehring is managing editor at
Many industry observers seem to be
saving themselves for the so-called
‘mega-merger’ of Anheuser-Busch
InBev and SABMiller - a deal, we are
regularly told, that is as inevitable
as night following day
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