Molson Coors seeks European growth with $3.5-billion StarBev buy
Blue Moon in Bulgaria? Carling and Coors Light in Croatia? With its $3.54-billion purchase of Prague- and Amsterdam-based brewer StarBev, Molson Coors Brewing Co. may be able to place more of its brands in Central and Eastern Europe.
Molson Coors bought the company from private equity firm CVC Capital Partners for 2.65 billion euros. Less than three years earlier, CVC had bought StarBev from Budweiser maker Anheuser-Busch InBev.
This time around, StarBev’s purchase price was 11 times its earnings, before interest, taxes and other factors of $322 million. The brewer, known for more than 20 local brands such as Borsodi, Kamenitza and Bergenbier, pulled in about $1 billion in revenue last year.
Revenue at Molson Coors – which also sells Keystone Light, Miller Lite, and more – was up 8% to $3.5 billion for the year ended Dec. 31.
Molson Coors, which splits its headquarters between Denver and Montreal, is like many other brewers looking abroad for growth opportunities. At home, the beer business is losing momentum as drinkers gravitate more toward spirits, ciders and artisan craft brews.
Craft brewers in the U.S. saw a 15% boom in retail sales last year and a 13% boost in volume, compared to a 1.3% slide in volume for the overall beer market, according to the Brewers Assn. this week. Craft brewers now make up nearly 6% of the U.S. suds economy.
Given the headwinds, Molson Coors is looking east, where StarBev employs about 4,100 people and has nine breweries in countries such as Serbia and Hungary.
“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,” said Peter Swinburn, Molson Coors’ chief executive, in a statement.
The deal is awaiting approval from European antitrust authorities but is expected to close in the second quarter of this year. Once the acquisition is finalized, StarBev will operate as a separate unit within Molson Coors.
Na Zdravi! (That’s “Cheers!” in Czech.)
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