Coors to Acquire Britain’s Carling

Adolph Coors Co., the No. 3 U.S. brewer, picked up an early Christmas present Monday as it snatched Carling Brewers from under the noses of bigger brewers, giving it Britain’s best-selling beer.

Coors, based in Golden, Colo., is paying Belgian brewer Interbrew $1.7 billion for its Carling division in Britain, which catapults Coors into second position in the British beer market.

The deal was signed in London in the early hours of Monday morning with investment bankers, who said Coors had offered the best price to Interbrew.

Interbrew, known for its Stella Artois, Labatt and Rolling Rock beers, was forced to sell the bulk of Bass Brewers it bought for about $3.3 billion, known as Carling, but retains Bass’ Scottish Tennent’s unit, its Northern Ireland brewery and Bass ale.

The deal got a lukewarm reception on Wall Street, as analysts questioned whether the transatlantic deal made sense given declining British beer sales, which have fallen 1% to 2% a year over the last decade.

Shares of Adolph Coors fell $2.98, or 5%, to $56.29 on the New York Stock Exchange.

Interbrew shares rose 0.82% to 29.39 euros in Brussels.

Analysts said the price was in line with expectations, but Coors, although on the auction short list, came as a surprise as Dutch brewer and Interbrew’s rival Heineken was seen as the favorite.

The Dutch brewer confirmed it bid for Carling but did not provide a figure.

A Heineken spokeswoman also said the company could have faced antitrust obstacles.

Coors’ planned purchase includes four breweries in England, Britain’s top-selling beer, Carling, together with Caffrey’s, Stones and Worthington brands.

The deal would give Coors a 19% share of the British market, second to Scottish & Newcastle.

Coors, the third-largest U.S. brewer after Anheuser-Busch Cos. and Philip Morris Cos.’ Miller, said it will finance the purchase with about $200 million in cash and a combination of bank and public debt.