E-Malt.com News article: 3512

Latvia: The Danish Brewery Group (Bryggerigruppen) reinforces its number two position in the Baltic States by acquiring controlling interest in leading Latvian brewery, the company announced on October 20. Bryggerigruppen acquired 83.5% of the share capital of Lacplesa Alus A/S registered in Latvia, the leading Latvian brewery with well-known brand and particularly strong in the HoReCa segment.

The acquisition price of the shares amounts to DKK 8.9 million (EUR 1.2 million), whereas the interest-bearing debt of the company amounts to DKK 19.0 million (EUR 2.5 million) equal to a total value (enterprise value) of some DKK 28 million (EUR 3.7 million). The acquisition, which is subject to, among other things, approval from the Latvian competition authorities, is expected to be completed in early 2005.

Lacplesa Alus A/S is a leading supplier of beer in Latvia with expected revenue of some DKK 45 million (some EUR 6 million) in 2004. The company’s main brand – Lacplesis - is known as a high quality brand placed in the premium segment, and it is particularly strong in the HoReCa area. In addition to its own brands, the company sells and distributes a number of international beer brands in Latvia.

In 2003 the total Latvian beer market reached some 1.5 million hectolitres with Lacplesa Alus A/S holding a share of some 11%, which made it the number 3 beer supplier in Latvia. The company has some 200 employees.

The V8 Strategic Plan of The Danish Brewery Group identifies the Baltic countries as a key target area. In July 2004, the Group announced its acquisition of the leading Baltic soft drinks producer SIA ”Cido Partikas Grupa” registered in Latvia (cf Announcement BG23/2004 of 29 July 2004). This initiative is now complemented by the acquisition of 83.5% of the share capital of Lacplesa Alus A/S.

The Danish Brewery Group now has three breweries and one soft drinks producer in the Baltic countries with expected revenue of DKK 500 million and some 1,000 employees. This clearly makes The Danish Brewery Group one of the leading beverage suppliers in the Baltic countries. In combination with The Danish Brewery Group’s acquisition of SIA ”Cido Partikas Grupa”, which holds a 31% share of the market for fruit juices and soft drinks in Latvia, the acquisition of Lacplesa Alus A/S makes possible the achievement of considerable synergies on sales and distribution. Furthermore, positive results are expected from purchasing and production synergies resulting from cooperation with AB Kalnapilio Tauro grupé in Lithuania. The Danish Brewery Group’s contribution of capital and competence will, based on an overall strong market position, enable further exploitation and enhancement of Lacplesis brand strength.

The Company is expected to be included in the consolidated financial statements of The Danish Brewery Group as of 1 January 2005. Due to inadequate financial strength, Lacplesa Alus A/S lost market shares in 2004. The Danish Brewery Group estimates a result before tax slightly below break-even for 2005. In 2006, the company is expected to show a profit before tax and it is estimated that as of 2007 the company will achieve a return on invested capital of at least 10%.


24 October, 2004