European Beer News (Issue 21)

by Max Bahnson

Merger is the Case

After a not entirely successful IPO last year, Pivovary Lobkowicz, a company that runs 7 regional breweries, sold almost 80% of its shares to CEFC, from China. The transaction was part of a shopping spree by the Chinese energy conglomerate that included a football team, two heritage-listed buildings in the centre of Prague and stakes in an airline.

According to the management of Lobkowicz, the influx of cash will help them acquire a yet unnamed brewery and to expand their business activities in China. Industry insiders, on the other hand, are scratching their heads trying to figure out why CEFC bought a brewing company in the first place.

The mega merger of AB InBev and SABMiller has not gone unnoticed here. SABMiller is the owner of Plzeňský Prazdroj, the country's largest brewer and maker of Pilsner Urquell and Gambrinus.

Besides concerns about Pilsner Urquell's future in terms of quality, there's also the question of the effect this may have in the seemingly endless trademark disputes AB-InBev has with Budějovický Budvar. It's well-known that Anheuser-Busch has always wanted to buy Budvar should it ever be privatised – it is still a state company – but this discards the possibility, as Prazdro's market share is declining.