Beverages

Remy Cointreau’s woes are weighty but temporary

24 Jan 2020

The spirits maker is relatively more exposed to Hong Kong and China, so protests hit sales harder. The coronavirus and U.S. trade war fallout add extra pressure. But with demand for pricey cognac on the up, Remy still deserves a premium to Diageo and Pernod Ricard.

AB InBev’s Oz M&A party leaves antitrust headache

12 Dec 2019

The world’s biggest brewer’s $11 bln sale of its Australian unit to Asahi has been challenged by the country’s watchdog. Its tough stance on beer and cider competition may hurt boss Carlos Brito’s plan to cut debt. The Corona-maker has other options, albeit less appetising ones.

ThaiBev is tempting Budweiser with a Saigon brew

3 Dec 2019

Tycoon Charoen Sirivadhanabhakdi may spin beer assets out of his Singapore-listed group, including an attractive Vietnamese pint. An IPO, at a mooted $10 bln valuation, could unlock value. The real prize will be a synergy-creating deal with AB InBev's newly hived off Asian arm.

Packaging sale can cure AB InBev’s hangover faster

28 Nov 2019

The $133 billion brewer’s U.S. bottle and can production unit is worth up to $6 bln. A sale of even a minority stake can bring net debt below 2 times EBITDA a year earlier in 2022. Soothing investor fears over indebtedness is worth having to rely on another company for vessels.

AB InBev gets dragged back into M&A dilemma

25 Oct 2019

The Budweiser maker said profit in the third quarter was stagnant, and volumes declined in China. That puts pressure on boss Carlos Brito to do more deals. Yet the world’s top brewer is still working off a debt hangover, and the weak performance makes dealmaking harder.

Nestlé shrugs off eco worries with water refresh

17 Oct 2019

The $316 bln consumer giant wants to revive a tepid growth in a business dogged by environmental concerns. Splitting the division into three locally-managed units may help the Perrier maker push new products. But any dilution of financial reporting would also mean less scrutiny.

Trump’s booze tariffs may cause extended hangover

3 Oct 2019

Washington slapped levies on $7.5 bln of European imports including Scottish whisky and French wine in return for aircraft subsidies. That’s weaker than feared: Less than 5% of Diageo’s sales are affected, Jefferies reckons. But trade tensions could prompt more trips to the bar.

New Molson Coors boss mounts Big Beer’s laggard

26 Sep 2019

The $12 bln brewer’s valuation trails industry peers. A renewed emphasis on marketing might make the difference but could mean less cash for controlling family shareholders. Incoming CEO Gavin Hattersley’s prior record, though, may leave a thirst for higher returns unquenched.

Hong Kong’s IPO debutants rely on helping hands

24 Sep 2019

AB InBev raised $5 bln through a relaunched float of its Asia unit, but only after pre-selling stock and pricing it low. There’s appetite for listings in the city despite ongoing protests, but at a discount and with cornerstone support. Followers may need to take the same tack.

Pernod Ricard has watered down Elliott’s punch

29 Aug 2019

The Absolut vodka maker has been in the activist’s sights for insipid growth and weak operating margins. It’s now beating new improved targets in both, as well as starting to address its governance issues. That may be enough for Elliott to divert its heat elsewhere.

Carlsberg can relax with a brew in second half

15 Aug 2019

Unlike larger peers AB InBev and Heineken, the Danish brewer’s recently increased year-end targets look easy to reach. Still, the end of a cost-cutting programme may bring slower gains in profitability. After strong share price gains, the beer maker’s valuation has enough fizz.

Moutai investors channel their inner Carl Icahn

13 Aug 2019

Scrappy shareholders challenged the $180 bln Chinese distiller, echoing the U.S. activist’s tilts at titans such as Apple. State-backed Kweichow Moutai will sidestep a vote and cap related-party deals. There’s more work to be done, however, on Beijing-linked corporate governance.

Kirin’s Japanese makeover is only half pretty

7 Aug 2019

The Japanese brewer is buying 30% of cosmetics and kale juice maker Fancl for $1.2 bln. Diversifying away from booze makes sense; rivals are doing it too. But paying a multiple of almost 40 times earnings, over twice the buyer’s own, for a minority stake is not a good look.

How China turned wine into vinegar for Remy

29 Jul 2019

Remy Cointreau spotted China’s wine potential too soon. Its 1980 joint venture proved a ground-breaking disaster. The venture’s shares, halted for six years amid fraud allegations, have resumed trade at half the closing price. Sometimes it’s worst to be first.

Heineken outlook only stacks up after a few pints

29 Jul 2019

The $62 bln brewer saw first-half operating profit rise only 0.3% year-on-year, but still assumes mid-single digit growth in 2019. Higher prices used to offset changing drinking trends. They will need to once again for CEO Jean-François van Boxmeer to avoid a new year hangover.

AB InBev makes Australia sale look like insurance

25 Jul 2019

Sales and EBITDA at the $163 bln brewer expanded strongly in the second quarter. It's a decent recipe for gradually reducing its $104 bln debt load. But the decision to sell AB InBev's business Down Under to Asahi suggests CEO Carlos Brito doesn't want to rely on that.

Asahi Aussie deal passes all but one sobriety test

22 Jul 2019

The Japanese brewer is buying AB InBev’s Australian unit for $11 bln. It’s a highly profitable business that ticks lots of boxes for Asahi, but justifying the price requires clever cost savings. Asahi will have to take a more proactive approach than usual to make the deal work.

Irn-Bru maker learns limits of customer virtue

16 Jul 2019

Soft-drinks maker A.G. Barr’s shares fell by 26% after it forecast weaker-than-expected sales. One factor was the UK tax on sugar, another was punters’ reluctance to pay up for healthier recipes. Hoping to keep selling both safer and more-profitable products is backfiring.

AB InBev checks into prolonged debt detox

15 Jul 2019

Cancelling the IPO of its Asian unit leaves CEO Carlos Brito with few options to quickly reduce net debt of $102 bln. Flogging Budweiser and Corona should bring borrowing below 2 times EBITDA, but not until 2023. The deal-happy group has no choice but a period of abstention.

Morgan Stanley’s Asian crown gets Bud-shaped dent

15 Jul 2019

The Wall Street bank, along with JPMorgan, led AB InBev’s now-scrapped $9.8 bln listing of its Asia unit. The bankers either misread the market, or caved into the clients’ pricing demands. Either way, it takes the shine off Morgan Stanley’s local league-table pre-eminence.