SABMiller Chief Foresees More Consolidation in Global Beer Industry

on 29/03/11 at 6:10 pm

Beer

Chief Executive Officer Graham Mackay predicts more consolidation in the global beer industry even as companies find it more difficult to extract value from purchases.

“There are bolt-on acquisitions to be done around the world, and there are major deals,” the head of the world’s second-largest brewer by volume said yesterday at the Marketing Society’s annual lecture in London. Mackay doesn’t foresee a “steady march of consolidation,” he said, but expects acquisitions to continue as global brewers with the ability to buy assets look to expand.

“It’s harder to make the numbers work” to drive value from acquisitions, he said. Many brewing assets are owned by families seeking high prices from any disposals, Mackay said. He declined to comment on any potential purchases that SABMiller may make, including Foster’s Group Ltd. (FGL)’s beer unit.

Global brewery deals have totalled $141.9 billion in the last five years, according to Bloomberg data, including InBev NV’s $60.8 billion acquisition of Anheuser-Busch Cos. and the $18.7 billion joint bid by Heineken NV (HEIA) and Carlsberg A/S for Scottish & Newcastle Plc. Anheuser-Busch InBev NV (ABI), the world’s largest beermaker, Heineken, Carlsberg and SABMiller control almost half the beer sold globally, Mackay said.

London-based SABMiller, the maker of Peroni and South Africa’s Castle lager, looks at any possible transactions on a “global basis,” seeking to create more value than any sum paid, he said.

“Whatever you buy, you’ve got a job” to improve it, he said. The key point is to be sure to know how to “change the trajectory” of any business purchased. “If there’s value to be had, we’re up for it,” Mackay said.

{Full story via Bloomberg}

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