Carlsberg sells stake in Türk Tuborg and Israel Beer Breweries
In one go, Carlsberg has disposed of its stakes in both Türk Tuborg and Israel Beer Breweries for a total of USD 116 million. The buyer is the Israeli CBC Group, a Coca-Cola franchisee, who was Carlsberg’s partner in Turkey and Israel.
Apparently Carlsberg has to sell off fringe assets to finance its takeover of Scottish & Newcastle earlier this year. Carlsberg has termed the disposal “optimising its portfolio”.
Carlsberg had a 95.6 percent stake in Türk Tuborg. The selling price is USD 80 million minus interest bearing debt and plus/minus adjustment for the difference between working capital as of end June 2008 and closing.
Türk Tuborg was established in 1967 through a partnership between Tuborg and Yasar Holding. Production started in 1969 with the first locally produced Tuborg brand. Over the years, Carlsberg has upped its stake. According to Turkish media it was during the 2001 economic crisis in Turkey that Yasar sold 47.7 percent shares of the firm to Carlsberg. Having paid USD 57.3 million for the shares that had a market value of USD 120 million, Carlsberg, in time, increased its stake to 95.65 percent, and invested approximately USD 220 million into its brewery located in the western city of Ýzmir.
However, since the takeover, the accumulated losses of the firm totalled an estimated YTL 367.1 million (EUR 193 million at today’s exchange rate). During the same period, Carlsberg Tuborg’s market value climbed only 8 percent to USD 130 million. Worn out by high taxes and its number two position in the market, lagging far behind market leader Efes, Carlsberg pulled the plug on its Turkish business.
As part of the deal between Carlsberg and Israel’s CBC Group Türk Tuborg will on a license basis continue the production of Carlsberg and a number of Tuborg brands.
The deal is subject to approval from the Turkish competition authorities.
At the same time, Carlsberg disposed of its 20 percent stake in Israel Beer Breweries, which was founded in 1992 by Carlsberg and its Israeli partner with CBC Group as the majority shareholder. The selling price of this stake is USD 36 million, says Carlsberg.
The announcements were made on 23 July 2008.
