Global brewers are bidding for Sleeman
Canada’s number three brewer, Sleeman Breweries, who has been on the block for a few months now, seems to have attracted offers from four major brewers according to reports in the Canadian media. Molson Coors, the Dutch brewer Royal Grolsch NV, Japan’s Sapporo Breweries Ltd., and Labatt, owned InBev, could all bid for Sleeman.
Canada is one of the world’s most lucrative beer markets, which explains why two foreign brewers are named as interested parties. Curiously absent from the list is SABMiller, whose brands plus import portfolio would complement Sleeman’s domestic brands.
People close to the action maintain that competition regulators would not object to either Labatt or Molson Coors buying their smaller domestic rival. Therefore, if either were to put in the winning bid, they could control half the country’s lucrative beer market.
Sleeman, a family-controlled company that trades on the Toronto Stock Exchange, sells about 7 percent of the beer in Canada through nine Sleeman brands, plus through the ownership, licensing and distribution of other beers such as Stroh’s Canada. At current market prices, Sleeman is worth about CAD 220 million.
Denver-based Molson Coors, which owns Coors Light and Molson Canadian, and InBev, owner of Labatt’s and the Canadian distributor of Budweiser, have roughly 42 percent each of the country’s beer market.
If Molson Coors or Labatt were to clinch the deal, regulators might launch an informal query. But since neither company would have a critical market share in any of the provincial markets, a formal probe looks unlikely.
In the late 1980s Molson controlled more than 60 percent of the beer market. Its share has fallen since as its flagship Molson Canadian brand has been attacked both from cheap value brands priced at substantially less than Molson’s beers and super-premium brands from regional craft brewers.
In 2005, Molson merged with the U.S. brewer Coors, a move that combined two medium-sized, family-controlled companies that were struggling to maintain share in their home markets. Soon after that deal, Molson Coors made a small Canadian acquisition, Ontario-based Creemore Springs Brewery Ltd., for CAD 16.6 million.
Labatt has been owned by Belgium-based InBev since 1995.
The Sleeman family started its brewery in the mid-1800s, according to a company history, but shut it down in 1933. It was resurrected in 1988.
One of Sleeman’s main selling points is its clear-glass bottles. The Molson and Labatt brands are sold in brown bottles courtesy of an industry agreement, and if either company bought Sleeman, it likely would have to switch packaging.
