C&C to acquire US cider brand for €20m as part of expansion

DRINKSMAKER CC advanced its plans for international expansion yesterday with the announcement that it is to acquire the second-biggest cider brand in the US for €20 million.

The Irish company also intends to launch Tennent’s in the US early next year, having successfully launched the brand in Canada in September, newly appointed C&C chief executive Stephen Glancey said yesterday.

The announcement, which comes less than three weeks after the surprise departure of chief executive John Dunsmore, pushed C&C’s share price up by more than 4 per cent.

Hornsby’s is the US’s second-largest cider brand, with 35 per cent of the off-trade cider market there. C&C’s Magners brand is the top imported cider in the US.

The company said the acquisition would “complement” Magners’ existing position in the US as Hornsby’s is primarily an off-trade drink sold on the US west coast, while Magners is an on-trade brand sold on the east coast. “Over time there will be synergies on the sales side,” said Mr Glancey.

He also raised the possibility of importing Californian cider into the British and Irish markets.

C&C has increasingly set its sights on the export market as consumer demand in Britain and particularly Ireland remains weak.

Magners’ exports, driven by Australia and the US, jumped by 22.7 per cent in the first half of this year. C&C sold 45,000 hectolitres of Magners into the US during its last financial year.

The total US cider market is estimated to be between 400,000 and 500,000 hectolitres. However, cider’s current share of the US long alcoholic drink market is 0.2 per cent, offering significant growth potential, according to C&C.

C&C chief financial officer Kenny Neison said the company expected the US cider market to grow between 20 and 25 per cent.

On the question of a full move to the London stock exchange, Mr Glancey described it as “something the company will monitor”.

C&C is in the process of pursuing a premium listing in London rather than its current standard listing.

The drinksmaker is maintaining its full-year operating profit guidance of €108 million to €115 million.

C&C will pay €16.4 million in cash to Gallo, the Californian-based owner of Hornsby’s, with up to a further €3.6 million payable subject to the achievement of performance targets in the period to April 2012.