E-Malt.com News article: New Zealand: Lion Nathan seen No 1 competitor for New Zealand spirits group

Australia’s beer maker, Lion Nathan, is to be the No 1 competitor in a potential A$1.1 billion ($NZ1.2 billion) sale of Australian and New Zealand spirits group Independent Distillers, Goldman Sachs JBWere said in a report, according to New Zealand media.

Speculation about a possible sale of the business has surfaced since its founder Michael Erceg died in a helicopter crash last November.

Independent Distillers products include ready-to-drink Woodstock Bourbon & Cola and Kristov Vodka Cruisers. It makes Haagen beer and imports beers including Carlsberg, Tuborg and Grolsch. "In our view Lion Nathan's thirst for an RTD business and its Trans-Tasman asset footprint makes it the leading contender in any potential sale," Goldman Sachs JBWere analyst Paul Ryan said in the research report.

New Zealand-based Independent Distillers expanded its sales operations into Australia in 1997. It started production in Sydney in 2000 and in Melbourne in 2001 and opened a plant in the UK in 2002. It also exports to Asia and North America. A Lion Nathan spokesman said the company declined to comment on speculation. Independent Distillers also had no comment.

The National Business Review last month reported Independent Distillers had held discussions over the possible sale of its UK and North American businesses but no decision had been made on its New Zealand and Australian operations.

Lion Nathan this year plans to enter the dark spirit ready-to-drink market in Australia, where bourbon, rum and whisky-based drinks are among the most popular retail liquor types.

A Lion source told NZPA the company didn't even know if Independent Distillers was on the market. The source said Lion had not gone through any internal processes at this stage "because nobody knows what the case is"

"I can understand why people would speculate why that we, and every other alcohol producer in the region, might be potentially considering it, but that's all it is at the moment. It's hardly surprising that we're getting mentioned."

Rival Foster's Group, which has experienced strong demand for its Cougar bourbon brand, is less likely to be interested in Independent Distillers as it focuses on integrating its Southcorp wine acquisition.

Lion Nathan, 46 percent owned by Japan's Kirin Brewery Co, has not said if it would enter the dark spirit market through acquisition or developing its own product.

Goldman Sachs JBWere said Independent Liquor could attract a sale price of A$1.1 billion, including debt and equity, based on its earnings from Australia and New Zealand.

Other potential buyers could include New Zealand brewer DB Breweries, a unit of Singapore's Asia Pacific Breweries Ltd. , global spirits players and private equity firms.


08 February, 2006