C&C pays €50m for Gaymer Cider

IRISH drinks group, C&C has increased its presence in Britain’s drinks market by reaching agreement to buy the British cider assets of international drinks group, Constellation Brands, for £45 million (€50m) in cash.

The deal is expected to be completed by mid-January and, according to C&C finance director Stephen Glancey, should immediately be earnings enhancing for the group.

In taking over the Gaymer Cider Company, C&C will become the second largest player in the British cider market with brands such as Blackthorn, Gaymer’s and Olde English.

These will add to its Magners product and create a full portfolio of cider brands for the group.

The latest acquisition will also give C&C a cider production facility in Somerset, a distribution warehouse in Bristol and 250 new employees, all of whom are expected to be retained.

With regard to what presence Gaymer’s or Blackthorn might gain in the Irish market, Mr Glancey said it was “too early” to suggest what the strategy might be for here.

However, he added: “We buy businesses to promote and develop them.”

He said that the acquisition will greatly increase C&C’s standing in the cider market and offers “excellent expected returns for shareholders”.

Indeed, C&C’s share price jumped by 8.53% to €2.80 yesterday, on the back of the news.

The Gaymer deal marks C&C’s second significant acquisition since the former Scottish & Newcastle management team of John Dunsmore, Mr Glancey and Kenny Neison joined the group last year and follows their €205m takeover of Anheuser Busch-InBev’s Irish, Northern Irish and Scottish divisions in August – assets of which include Tennents Lager and the Wellpark Brewery in Glasgow, where it is made.

In the year to the end of last February, Gaymer’s total cider volumes amounted to 1.5 million hectolitres, which is nearly twice the size of Magners’ current volumes in Britain.

The US-based Constellation Brands has been looking to withdraw from the cider business – and focus on its wine business – for some time. Indeed, C&C had already made a play for the Gaymer’s business last year.