Fuller’s has agreed to sell the entirety of its beer business to Asahi for £250m.
The proposed deal encompasses all of Fuller’s beer, cider and soft drinks brewing and production, wine wholesaling and distribution, as well as the Griffin Brewery, Cornish Orchards, Dark Star Brewing and Nectar Imports. The price represents a multiple of 23.6x EBITDA.
Asahi Europe Ltd - a wholly-owned subsidiary of Asahi - will acquire the brands of the Beer Business (including London Pride) and will receive the benefit of a licence, on a perpetual, global, exclusive and royalty-free basis, to use certain trade marks (including the Fuller’s name, logo and cartouche) for the provision of beverages. Ownership of the licensed trade marks will be retained by Fuller’s.
As a result of the proposed deal, a strategic alliance will be formed where Asahi acts as a key supplier to Fuller’s pubs and hotels business.
Fuller’s said the core of its future growth now lay in its pubs and hotels estate.
Fuller’s chief executive Simon Emeny said: “This deal secures the future of both parts of our business including protecting the heritage of the Griffin Brewery in Chiswick, which was particularly important to the Fuller’s Board. We remain incredibly proud of the Fuller’s Beer Business, its history and the high quality premium beer and cider portfolio that we have developed. Brewing has formed an integral part of our history and brand identity, however the core of Fuller’s and the driver of our future growth is now our premium pubs and hotels business.
“I am delighted that this transaction maintains Fuller’s long association with the Beer Business and that we will continue to enjoy a strong relationship with Asahi as a key supplier. We look forward to continuing our alliance and developing a mutually beneficial partnership that will see both businesses flourish in the future. Asahi, as a company recognised for brewing excellence, is an appropriate custodian of our rich brewing history and the Griffin Brewery, and will ensure the Fuller’s Beer Business brands will reach an even wider global audience.”
Akiyoshi Koji, CEO of Asahi Group Holdings, Ltd, said: “We have long admired the brewing business and exceptional beer brands that Fuller’s has built over the years and the high degree of respect it commands throughout the global beer industry. Fuller’s is one of the few brewers that show the same genuine commitment to brewing excellence and quality that we do. We strongly believe that the brands of the Beer Business, including London Pride, Frontier and Cornish Orchards among others, complement our premium portfolio in the UK market. In particular, London Pride is a fantastic brand with an illustrious heritage dating back to the 1950s and we are excited about its untapped international potential which Asahi has the scale and global network to unlock.”
Rothschild & Co is acting as sponsor and sole financial advisor to Fuller’s on the Proposed Disposal.
Fuller’s also announced its trading update to 19 January 2019, with managed like-for-like sales up 5.6% in the last 10 weeks. For the 42 week period, like for like sales in its managed estate have risen 4.7%, like for like profits in Tenanted Inns have risen 2% and total beer and cider volumes in The Fuller’s Beer Company have remained level.
Emeny said: “This is a very good set of figures and I’m particularly pleased with the way our Managed Pubs and Hotels performed over the important five week Christmas and New Year trading period. Like for like sales for December rose 8.7 per cent and our pre-booked covers rose by 16 per cent.
“Since we last reported, we have opened our latest transport hub site, The Signal Box at Euston, which is proving very popular and have refurbished The Blackbird at Earl’s Court, including developing nine new boutique bedrooms. We are on site at The Hercules in Lambeth, which will open before the year end, and in the next few weeks we will open 15 stylish new bedrooms at The Counting House in Cornhill, a large freehold site in the heart of the City of London. We have also transferred another six tenancies to our turnover agreement.
“As has been widely commented, we are in an uncertain and challenging consumer environment. However, Fuller’s has well-invested premium pubs and an excellent team of people, underpinned by a long-term vision and a clear, well-executed strategy that is proven to grow sales, attract new customers and deliver returns for our Shareholders.
“We will next update the market on 7 June 2019, when we announce the Company’s full year results for the 52 weeks to 30 March 2019.”