Habemus CEO
Following the sudden departure of Nils Andersen, Carlsberg appointed Jorgen Buhl Rasmussen as its new CEO in September, triggering fresh speculation that the Danish brewer will make a move on Scottish & Newcastle (S&N).
Jorgen Buhl Rasmussen, 52, who has been a member of Carlsberg’s three-man executive board since April 2006, takes up the post on 1 October 2007. He replaces Nils Andersen, who announced his resignation in June after six years at Carlsberg to head the shipping group AP Moeller-Maersk.
Mr Rasmussen was quoted as saying that he had no plans to change the direction of the company. He added that the key focus was on improving profit in western Europe and accelerating growth in eastern Europe. He declined to comment about a tie-up with S&N, Carlsberg’s joint venture partner in Russia Baltic Beverages Holding, which owns the largest brewer there.
Mr Rasmussen is currently head of Carlsberg’s eastern Europe operations, which analysts say makes him the ideal candidate to oversee a potential merger and expansion of the group.
For almost twenty years Mr Rasmussen has worked for consumer goods companies Duracell and Gillette. Before joining Carlsberg he was President of Gillette’s Eastern Europe, Middle East and Africa division.
Jorn Jensen, Carlsberg’s Chief Financial Officer, will become Deputy Chief Executive. After the departure of Nils Andersen the two will constitute Carlsberg’s board thus following Heineken’s example of a two-person board.
The two men will have to clear up the muddle which Nils Andersen has got them into with his remarks concerning a bid for S&N. According to media reports, Jensen and incoming chief executive Jorgen Buhl Rasmussen have already said they were trying to clarify the situation after confusing messages had fuelled speculation.
It will be remembered that the catalyst for the rumours that Carlsberg would make a hostile bid for S&N was the announcement of a plan by the charitable Carlsberg Foundation, approved in May, to cut its stake in Carlsberg from 51 percent to 25 percent, allowing it to raise cash, while still holding 51 percent of Carlsberg’s key voting shares.
Such a move could allow Carlsberg to raise about GBP 12.7 billion for acquisitions, more than enough to swallow the slightly larger S&N. Indeed, a bid of about 800 pence per share has been mooted, valuing S&N at GBP 7.6 billion.
What makes such the Carlsberg share re-structuring particularly dodgy is that S&N could not bid back, as the foundation would still hold a majority of the voting shares. Many have wondered how, in the European Union single market, companies with differential voting structures can still exist and, moreover, who would want to buy the non-voting, or low-voting shares.
So is this capital-raising as assured as it seems? Let’s put it this way: there are still a few question-marks to be dealt with.
It is certainly true that BBH has grown to be a force in the east European beer market. And given the large proportion it now accounts for in Carlsberg’s earnings, pressure for 100 percent control of a major profit earner is understandable.
Another important quirk is that there is a small quoted ‘float’ of BBH shares on the Russian stock market. This helps retain local support for the BBH brands, build manager loyalty and enable partnerships to be formed at ground level - important in these markets.
Could there be another motive for the bid talk? Some analysts with a long memory have suggested Carlsberg’s real motive may be fear of a third party bid for S&N from, say, SABMiller or Anheuser Busch. Throughout much of the 1990s such speculation made the rounds. Did anything come of it? Er, not until today. Stay tuned.
