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Molson Coors to buy European brewer StarBev for $3.5 billion

April 03, 2012|By Tiffany Hsu, Los Angeles Times
  • Molson Coors Brewing Co., whose numerous brands include Molson Ice beer, has agreed to buy StarBev, which had $1 billion in revenue last year.
Molson Coors Brewing Co., whose numerous brands include Molson Ice beer,… (Bill Sikes, Associated…)

Molson Coors Brewing Co. — home of Miller Lite, Blue Moon, Keystone Light and other signature brands — plans to expand into Central and Eastern Europe by buying StarBev, based in Prague and Amsterdam.

The deal calls for Molson Coors to pay 2.65 billion euros, about $3.54 billion, for the European company, which has a roster of more than 20 brands little known in the U.S., including Borsodi, Kamenitza and Bergenbier.

StarBev's current owner is the private equity firm CVC Capital Partners, which less than three years ago bought the brewery from Budweiser maker Anheuser-Busch InBev.

StarBev's latest purchase price is 11 times its earnings, before interest, taxes and other factors. The company pulled in about $1 billion in revenue last year.

Revenue at Molson Coors was up 8% to $3.5 billion for the year that ended Dec. 31.

Molson Coors' stock, which trades under the TAP ticker, fell $2.48, or 5.4%, to $43.18 on Tuesday.

In the U.S., the mainstream beer business has generally been softening as drinkers gravitate toward spirits, ciders and artisan craft brews. Given the head winds, Molson Coors — which splits its headquarters between Denver and Montreal — is looking east, where StarBev has about 4,100 employees and nine breweries.

"The Central and Eastern European beer market is attractive, with strong historical trends and upside potential as the region returns to its pre-economic-crisis growth rates," Peter Swinburn, Molson Coors' chief executive, said in a statement.

The deal is awaiting approval from European antitrust authorities but is expected to close in the second quarter. The plan is for StarBev to operate as a separate unit within Molson Coors.

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