Bulmer to sell Australian unit
and New Zealand cider units to CUB, a division of the Foster's
group, for €35.2 million.
HP Bulmer, the troubled UK cider maker, has announced the sale of HP Bulmer (Overseas Holdings), the holding company of its Australian and New Zealand drinks businesses.
Bulmer Australia will be sold for £22.5 million (€35.2m) to FBG Holdings (UK), part of the Carlton & United Breweries unit of Australian beer and wine group Foster's.
Bulmer said that the sale was conditional upon the approval of Bulmers' shareholders and approval by the Australian competition authorities.
The acquisition will give CUB the rights to the leading Australian cider brand Strongbow, as well as the Woodpecker, Devondale, Harvest and Zolensky brands in Australia and New Zealand. It also includes production facilities at Campbelltown, NSW and Gisborne, New Zealand.
CUB will also own New Zealand's number one cider brand, Harvest, and will have the rights to produce and distribute the Scrumpy Jack and Bulmers Original brands in Australia through a licensing agreement with HP Bulmer.
CUB's managing director, Trevor O'Hoy, said: "The acquisition of BAL enhances CUB's strategy to achieve earnings growth via bolt-on acquisitions to supplement organic growth.
"CUB expects to drive synergy benefits and exploit brand growth opportunities through the company's greater sales, marketing and distribution penetration. The acquisition will bring together under the one portfolio Australia's leading cider brand Strongbow with the fastest growing cider, CUB's Mercury brand.
"The acquisition will be earnings per share positive and shareholder value accretive in the first year and is consistent with CUB's focus on building a premium brand portfolio, with the leading cider brands Strongbow in Australia and Harvest in New Zealand," O'Hoy concluded.
Meanwhile, HP Bulmer has also published its interim results for the period to 25 October 2002 which show the extent of its losses. Despite a 0.9 per cent rise in sales to £288.6 million, the company slipped £1.8 million into the red before tax, exceptional items and goodwill, a 128 per cent decline compared to the previous year.
Operating profits were also substantially down, falling 74 per cent to £2.8 million.
Bulmer said the UK results had been impacted by increased supply costs, stock write-offs and margin pressure in the off trade, as well as a significant change in accounting policy for marketing spend.
But while it took heart from the fact that the Strongbow brand maintained its momentum during the half, increasing volumes 7 per cent, it stressed that most of its international business was performing poorly, due in no small part to increasing competition from RTD spirits.
Sales in the UK were up 2.1 per cent to £260.6 million, but operating profits dropped 51.3 per cent to £5.8 million. Elsewhere, sales were down 8.7 per cent to £28 million, while operating profits plummeted 134 per cent to a loss of £3 million.
