Molson Coors Beverage Co. is set to acquire an 8.5% stake in UK-based tonic and mixer maker Fevertree Drinks.
The Coors Light maker has struck a deal to pay £71m ($88.3m) in cash for the shareholding as a part of what Fevertree has called a “long-term strategic partnership”.
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As part of the agreement announced on the London Stock Exchange today (30 January), Molson Coors will manage the sales, distribution and production of Fevertree’s products in the US from 1 February.
Gavin Hattersley, Molson Coors’ CEO, said the partnership will help the group move towards “becoming a total-beverage company with a winning portfolio of drinks for a wide variety of consumer occasions”.
He added: “The US is our biggest global market by revenue, and the same is true for Fevertree, so we believe this partnership provides ample opportunity for our teams to build on the strong success Fevertree has achieved to date.”
As part of the deal, Molson Coors will take over Fevertree’s US “operating entity”, Fevertree USA, for $23.9m in cash.
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By GlobalDataAfter taking ownership of Fevertree’s US production relationships, Molson Coors plans to later move production in-house, leveraging its supply chain, procurement capabilities, and operational efficiencies.
Fevertree expects the partnership will help to boost its cash generation as it expands in the US, where it has been operating since 2008.
Alongside the news of its tie-up with Molson Coors, the UK soft drinks maker also released a pre-close trading update for 2024.
For the year ended 31 December, Fevertree reported total group revenue growth of 2% on a constant-currency basis to £368m.
Total Fevertree brand revenue was up 3% year on year at £363.4m, while the mixers producer’s US revenue increased by 12% at a constant currency to £128m.
In March last year, the business said it was “confident” of doubling EBITDA in 2024, as glass and freight costs had started to ease.
Fevertree said today it expected to see “a strong uplift in adjusted EBITDA for the full year, in-line with expectations”.
As the transaction with Molson Coors takes place in 2025, Fevertree expects low-single-digit group revenue growth and a short-term EBITDA impact. However, it also anticipates double-digit revenue growth in 2026, supported by increased US marketing investments.
