Mergers German style

After the failed merger of Deutsche Bank and Dresdner Bank, and more recently of Dresdner Bank and Commerzbank, the rest of the world must have come to the conclusion that German companies do not know how to do it.
Amidst collective gnashing of teeth and mutual accusations of "it was you", comes the latest attempt at doing it right. For months the brewers’ grapevine had been a-buzz with rumour that one of the largest beer and beverage groups Brau und Brunnen AG, Dortmund, (BuB) would be sold.
Interestingly, for many years BuB had pursued a rather reckless business expansion strategy as concerns its beer and real estate deals... and out again.
This year matters definitely turned to the worse when BuB in its 1999 annual report reported volume sales of 13... to be continued..

In the case of BuB word was out that anybody would be considered eligible as long as the prospective buyer was prepared to take on not only BuB’s flagship brand Jever Pilsener, but also its swollen portfolio of regional beer brands plus its soft drinks and mineral water interests (Schweppes, Apollinaris). By all appearances, the 55%-majority stakeholder, HypoVereinsbank, watched on encouragingly even as BuB went "international", buying in-to central and eastern Europe .7 million hl, of which 7.5 million hl were beer, an operating loss of DM87 million on a turnover of DM1.6 billion with debts at the banks lodged at DM350 million.
When on 3 July a pre-merger agreement was signed between Bayerische BrauHolding (Paulaner, Kulmbacher), which is owned 99.2% by Schörghuber Unternehmensgruppe and BuB, ears pricked up. Both companies assured their shareholders that the merger was to be a merger in the full meaning of the word and not a take-over although BuB would be submerged in the new beverage group. It was also announced that all of BuB’s portfolio of brands would be maintained. Another case of "read our lips"?
In any case, the announcements startled some of Bayerische BrauHolding’s shareholders at the AGM in August, who could not see much of a gain
in the diverse portfolio, and feared that Bayerische Brau-Holding was paying too high a price for a single nationally distributed pils brand (Jever) which has not been doing much for itself of late.
Bayerische BrauHolding may be the junior partner in the deal with a 1999 turnover of DM540 million and earnings before tax of DM57.6 million, but it is certainly, financially speaking, the more potent partner. If no brands were sold, the new group, whose name has yet to be decided, would be the largest German brewer with an annual sales volume of 12 million hl of beer and a market share of 11%. At present, teams of accountants are assessing both company’s value which will determine who gets how much of a stake in the new group. Bayerische BrauHolding is adamant that it will be the majority stakeholder with a 50%+ stake.
If the respective shareholders give the merger the go-ahead in March 2001, the new group will come into effect retroactive to 30 September 2000.
At the AGM, Bayerische Brau-Holding also announced that Wolfgang Salewski, 57, a psychologist, management con-sultant and founder of the Munich Institute of Crisis Management, who rose to fame as a security advisor to the German police forces, will become CEO of Bayerische BrauHolding. Mergers German style .