Beer Mergers in the Making?

There's been some talk in the industry recently about mergers and buyouts. While there has been a considerable amount of speculation about the possible purchase of Foster's by SABMiller, those plans seemed to have been halted by internal legal issues. However, looks can be deceiving – the sale seems to be back on. With this news, shares in Foster's jumped up by a considerable amount.

It seems that the problem stemmed from Pacific Beverages – part of the SABMiller family of companies, and a joint partner with Coke. Pac Bev was thought to be the frontrunner to purchase Foster's, but that was nixed when CE Davis said that the price was just too high. Industry experts thought that was the end of it, but now it seems that SABMiller is going to make a standalone bid for Foster's.

This comes on the heels of an announcement that Kirin (Japan's largest beer company) will form a joint venture with China Resources Enterprise to supply soft drinks to China. Of course, there is also a beer angle here – Kirin would also be distributed throughout the nation, and Chinese beer would be exported more to Japan. Other news from Kirin includes the possibility of a nonalcoholic version of the beverage reaching US shores sometime in the near future.

This is not the first international venture for Kirin. They actually purchased National Foods a few years ago, and they also own Australia's largest brewery – Lion Nathan. It also has a significant share in the San Miguel Brewery in the Philippines. It definitely seems that Kirin is a company to watch, though the ever-growing SABMiller family (which includes Pilsner Urquell, Grolsch and quite a few other well known brands sold in the States) is also one to watch.

Mergers are nothing new in the world of beer. 2005 saw the merger of Molson with Coors to form MolsonCoors, the combining of InBev and Anheuser Bush in 2008, and there have been several others. However, as the influence of craft beer grows, you might expect to see these mergers continue. The loss of profit due to the increasing popularity of craft beers (like Sam Adams and Sierra Nevada, as well as Dogfish Head), have left many of the world's larger breweries hurting financially and ripe for mergers or buyouts. Who might end up on the chopping block next? Only time will tell, but there are always rumors circulating in the beer world.

Posted on February 10, 2011 and filed under The Business of Beer.