Royal Unibrew strengthens its position in the Baltic coun-tries through
acquisition of all assets and activities of Livu Alus in Latvia
• Acquisition of all assets and activities relating to the Livu Alus brewery in
• Livu Alus is the number 3 brewery in Latvia in terms of size
• Synergies expected from cooperation between Livu Alus and other Group
ac-tivities in the Baltic countries
• Over a 3-year term a return on invested capital in line with the Group's
re-quired return is expected
The Baltic countries are a focus area in Royal Unibrew's ”MACH II” Strategic
Plan and the Group is already operating Kalnapilio-Tauro Grupe in Lithuania as
well as the soft drinks pro-ducer Cido and the Lacplesa Alus brewery in Latvia.
Royal Unibrew's position is now rein-forced by the acquisition of all assets
and activities relating to Livu Alus from the firm Grigis un Co, SIA.
The acquisition price of the unencumbered activities amounts to EUR 17.5
million (DKK 130 million) including a site that makes possible future
The acquisition is made through Royal Unibrew's Latvian subsidiary Lacplesa
The acquisition, which is subject to, among other things, approval by the
Latvian competition authorities, is expected to be finally realised at the
beginning of Q4 2007.
Livu Alus is the number 3 beer provider in Latvia in terms of size holding a
market share of some 9-10% in 2006. The brewery's main brand is primarily sold
in the mainstream segment through retail traders, whereas the HoReCa segment is
less developed. Moreover, the brewery has a certain amount of exports,
particularly to Lithuania.
The brewery was established in and has been extended since 2000 and still has
unutilised capac-ity. In 2006, net revenue amounted to some EUR 9 million (DKK
67 million). The brewery has approximately 125 employees.
Background to the acquisition
Royal Unibrew is already today a leading supplier of beer, fruit juices, water
and soft drinks in the Baltic countries, with total revenue in 2006 of some EUR
74 million (DKK 550 million) and a total number of employees of approximately
In combination with the Kalnapilio-Tauro brewery in Lithuania as well as the
soft drinks pro-ducer Cido and the Laplesa Alus brewery in Latvia, the
acquisition of Livu Alus represents sig-nificant strengthening of the market
position on beer in Latvia, postponement of capacity-related investments at the
Kalnapilio-Tauro and Lacplesa Alus breweries (cf. Announcement RU20/2006 of 9
August 2006) as well as the achievement of production, sales/distribution and
administration synergies in the Baltic area.
Accounting issues and expectations for the future
It is expected that the Livu Alus activities will be included in the financial
statements of the Royal Unibrew Group as of 1 October 2007 approximately.
As a result of market investments and integration expenses, the acquisition of
the Livu Alus activities is expected to a have minor negative effect on Royal
Unibrew's profit before tax in both 2007 and 2008, whereas, after 2008,
positive earnings contribution and key ratios are ex-pected in line with the
Please direct any questions to me at tel +45 56 77 15 00.
Royal Unibrew A/S