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Canada, Toronto: Quebec brewer Unibroue Inc., a proud proponent of the province's French roots, sold out to an English-Canadian rival on April 20, giving Ontario's Sleeman Breweries Ltd. a stronger foothold in Quebec and a new avenue into the U.S. market, according to Reuters statement. For years, Sleeman has been eyeing Unibroue as a way to expand in Canada's second-largest beer market and on Tuesday the 170-year-old Ontario brewer offered C$36.5 million ($27 million) in cash and debt for Quebec's largest microbrewer.

"The transaction is the next step in the continued growth of Sleeman," chief executive John Sleeman said in a statement. Andre Dion, Robert Charlebois and Serge Racine, who together own 71.8 percent of Unibroue, agreed to tender all their shares to the offer. The move will help Guelph, Ontario-based Sleeman boost its brewing capacity in Eastern Canada, create a platform for its brands in Quebec and give it access to Unibroue's U.S. distribution network.

Sleeman expects the acquisition to add between C$5 million and C$6 million to its 2005 earnings before income taxes, depreciation and amortization. "It's positive for the company. The brands are complementary and there's opportunity to expand Unibroue's brands beyond Quebec," said Krista Mackay, an analyst with Salman Partners Inc.

"It gives them a platform for hopefully growing their sales and presence in the U.S." The only caveat is if Quebecers will accept an Ontario firm running a Quebec company that promotes itself through the province's cultural and historic roots. Unibroue plays to Quebec's French heritage with ales such as the 1837 brand, a beer "dedicated to the heroes that died fighting for the freedom of our country" in the 1837 rebellion, and Don de Dieu, which is named after the ship of French explorer Samuel de Champlain.

However analysts said it did not matter who owns the company. "As long as the beer tastes the same, the diehards will still drink it," said Karim Salamatian, an analyst with BMO Nesbitt Burns. "People that have lived in Quebec and know the brand. They are very loyal to it."

Sleeman, which already owns Quebec's Brasserie Seigneuriale, markets brands such as Sleeman Cream Ale, Upper Canada and Okanagan Spring. It also brews Stroh brands under license. One of its brands, Upper Canada Rebellion, celebrates the 1837 uprising from the Ontario point of view.


21 April, 2004