Japanese Firm Asahi Purchases Fuller’s for US 330 million

Reasons behind Fuller’s Acceptance of the Sale

Fuller, Smith & Turner (Fuller) sold all its brewing business to Japanese company Asahi for a business value of £ 250 million (about $ 330 million). The agreement would allow Fuller to reach a net amount of approximately £ 205 million (approximately $ 270.5 million) if the proposed transaction were to obtain the necessary shareholder approval and comply with the regulations. If the loss of an iconic brewer could be a blow to London pride, the flagship beer of the Fuller’s Brewery, brewed since 1958 at the Griffin Brewery in Chiswick, West London since 1958, however, raised a glass.

Asahi Acquisition Journey

The Japanese firm, which inherited its brewing heritage in 1889 at the opening of its first brewery, was founded in Osaka (under the name of Osaka Brewing Company). It has undoubtedly spread in European breweries and European shopping frenzy. In Europe, AEL has established a portfolio of iconic premium beers, including Grolsch, Peroni, and Mean time, following the acquisition of these brands and related SABMiller activities at AB InBev in October 2016. They also agreed to acquire five brands of beer from Eastern Europe – including Pilsner Urquell in the Czech Republic, the legendary nicknamed the world’s first golden pilsner beer, produced for the first time on 5 October 1842 in Pilsen. 7.3 billion euros (£ 6.1 billion) in December 2016. At that time, it was Asahi’s largest acquisition to date, and in Europe, of its second largest market. Until now, Asahi has left the brewing style of Pilsner Urquell alone in terms of taste.

The Reasons behind Fuller’s Acceptance of the Sale

But you have to wonder why Fuller’s has decided to sell its brewery business, a family brewer for over 100 years, and to Asahi, a brand known for its tasteless beers. For beer lovers, this has been a shock and many have expressed their anger on social media and elsewhere. Jackie Parker, President of the Campaign for Real Ale (CAMRA), said that it was a very sad day to see such a well-known, historic and respected name leave the brewing business. A representative of Czech Trade based in London, an agency of the Czech Republic based at the Notting Hill embassy, ​​said they were also saddened to learn the sale of Fuller.

It was not just because of the fact that he lived in Chiswick, said the executive. But Fuller’s management has recently made efforts to get involved in the Czech beer scene at its annual Beer Days. London, the city in which famous brands like Courage, Charrington, Truman, Watney, and Whitbread, with this last agreement, will no longer have brewers belonging to local interests.

In retrospect, when Young & Co completely stopped brewing in 2011 after selling its Ram Brewery based in Wandsworth (2006) in South London, Fuller issued a statement in which they said that they had been brewing for 350 years and would like to go on for 350 more. Fuller’s, in which the family controls about half of the shares, has a good deal. Asahi gives equal attention to twice the value estimated by the majority of analysts. With a cash flow of 23 times generated by the company, it is considered high by the standard.

The proposed divestment, which is expected to be completed in the first half of 2019, is subject to the adoption of two ordinary, inter-conditional resolutions approving the transaction upon completion of the reorganization and obtaining a relevant confirmation from the UK Competition and Markets Authority. The reorganization refers to a reorganization of the company by Fuller to transfer certain assets and liabilities of the beer business that are held by Fuller to The Fuller’s Beer Company Ltd. Rothschild & Sons Limited (Rothschild & Co), which is licensed and regulated by the Financial Conduct Authority (FCA) in the United Kingdom, acts exclusively for Fuller and none else in connection with the proposed transaction.

 

 

About Varun Seepathi 40 Articles
With an experience of over 3 years, Varun Seepathi has aided more than 50 medium to small and large firms for foraying into new markets, by increasing footprint in the existing bracket and understanding the ins and outs of these beasts. These beasts are the companies which have been exclusively engaged in materials, chemicals or packaging activities, and have encountered restraints either in the maintenance of P&L or in beating their competitors. He has also authored more than 300 research papers relating to the industry which consist of crucial information such as addressable serviceable market, strategies of players, growth of the market, market size, forecast, market share estimations and winning strategies along with opinions on the same. The “three slope distributor/off-taker evaluation model” currently in use by a lot of multinational companies has also been pioneered by him. A mood driven writer, a professional consultant, and a born explorer, Varun Seepathi is currently working as a full-time consultant. Healthcare, wealth management and information technology are some of the verticals of the industry where he has demonstrated his skills.