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German family-owned food giant Dr Oetker made on February 12 a 360-million-euro ($461.6 million) bid for the country's fourth-largest brewer, Brau und Brunnen AG, the second takeover in the sector in as many months. Dr Oetker, which controls rival brewer Radeberger, bid 80 euros a share for Brau und Brunnen, a beermaker that was put up for sale last year by major shareholder HVB Group. The bid represents a 7 % premium to Thursday's (February 12) closing price, according to Reuters.

The food group, known for its frozen pizzas and desserts, has agreed to buy a 61.7 % stake in the brewer from HVB, Germany's second-biggest bank, for 220 million euros. The acquisition, which is contingent on Dr Oetker gaining a 75 percent stake and on antitrust approvals, could further consolidate one of the world's biggest beer markets that has so far been largely fragmented and boasts some 1,280 breweries.

Brau und Brunnen, whose brands include Jever and Schultheiss, was in talks with U.S. private equity firm One Equity Partners last year, but the discussions collapsed. Around that time, Dr Oetker was named as a possible alternative buyer. The brewer said earlier this year it expected an operating profit of more than 20 million euros in 2004.

Ahead of the announcement, its shares closed up 2.3 percent at 74.75 euros. A financial source said HVB would book a gain of about 50 million euros from the deal, part of the bank's strategy of selling non-core shareholdings.
Germany is home to the world-famous Oktoberfest, a beer-swilling extravaganza, and several foreign beermakers have already made substantial acquisitions.

Danish brewer Carlsberg has said it is planning further acquisitions after launching a half-billion-euro bid for another German brewer, Holsten, last month. Carlsberg, the world's sixth-biggest brewer, offered 38 euros per share to Holsten shareholders, after agreeing to buy a 51 percent stake from major shareholder Christian Eisenbeiss. The Holsten deal established Carlsberg as the fifth largest in Germany.

And Belgian giant Interbrew is now Germany's biggest brewer after buying top brands, including Beck's and Loewenbrau.

Worrisome for the beer giants, Germans drank less beer for the fourth straight year in 2003 as a new government deposit on cans and an aging population led to a slowing of sales.

But the country is still the third-largest consumer on a per capita basis, behind the Czech Republic and Ireland.


13 February, 2004