The Czech Republic: Soft drinks maker Kofola to expand into beer business
Czech soft drinks maker Kofola CeskoSlovensko will expand into the beer business with the acquisition of Pivovary CZ Group, the country's fifth largest brewer, the companies announced on November 22.
Kofola, which sells water, juice and cola drinks around central and eastern Europe, said the acquisition would enable growth in a stable segment with export potential.
The deal, subject to regulatory approval, should close early next year.
"At Kofola we have learned to develop traditional and local brands with a strong story. When the opportunity arose to invest in breweries that produce brands with a long history... we didn't hesitate," said Jannis Samaras, the CEO of Kofola Group.
Pivovary CZ produces the Holba, Zubr and Litovel brands and has an annual production capacity of 800,000 hectolitres, a third of which is exported.
Kofola said two minority shareholders – RSJ and USOVSKO – would hold a combined 49% in the brewery group.
Financial details of the transaction were not released.
Shares in Kofola, which have risen by more than 13% in the past year, were suspended before trading on Wednesday (22 November), pending announcements.
Kofola reported a 20% rise in third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) to 556 million crowns ($25 million). It also tightened its full-year EBITDA outlook to 1.25 billion crowns.
Jaromír Dvorský, vice-chairperson of the board of directors of Pivovary CZ Group stated, "We are committed to preserving the craft brewing tradition, stable relationships with customers, suppliers and employees, and corporate social responsibility. These were all important criteria in the sale negotiations.
"We are glad that we have found a partner who will help us to maintain and further develop the quality of our beers and at the same time strengthen their business expansion."
"The entry into local breweries is another piece of the puzzle of our long-term strategy of private equity funds and we are glad that we could join forces with a company with such a reputation as Kofola," stated Matěj Kumstýř, asset manager at RSJ.
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