DRINKS MANUFACTURER C&C saw its share price jump almost 9 per cent yesterday on the back of an announcement that it is to acquire the British cider assets of Constellation Brands.
C&C has agreed to buy the Gaymer Cider Company, the UK’s second largest cider manufacturer, for £45 million (approximately €50 million) from US wine company Constellation Brands.
The transaction is expected to be completed by mid-January 2010, and will broaden C&C’s existing cider offering beyond Bulmers and Magners to include brands such as Blackthorn, Olde English and Gaymers.
Under the terms of the deal C&C will also acquire a cider production facility in Shepton Mallet, Somerset, and a distribution warehouse in Bristol.
As well as strengthening its position in the UK cider market, it will shift C&C’s focus away from on-trade sales towards the faster-growing off-trade distribution channel.
The acquisition is also expected to enhance earnings immediately and deliver £3 million of cost and revenue “synergy” benefits by February 2013.
C&C is currently engaged in a consultation process with the 250 employees of Gaymer Cider.
When asked whether he could rule out major job losses at Shepton Mallet, chief operating officer Stephen Glancey said that there may be some degree of “overlap” which may lead to job losses, but stressed that C&C plans to invest in the business.
“I don’t see this as being bad news for the people in Shepton Mallet,” he said.
The deal has been structured as an asset purchase so that historic pension liabilities remain with Constellation.
In August, C&C announced that it was acquiring the Scottish and Irish assets of ABI, including Scotland’s top lager brand Tennent’s.
The process of integrating this business is complete in the Republic, and well advanced in Scotland, the Dublin-headquartered company said.
C&C yesterday received approval from the UK’s Office of Fair Trading in respect of the Tennent’s acquisition, which means it can now proceed with integrating the Northern Irish business.
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