The German Brewing Industry

doi:10.3790/978-3-89644-343-4

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Schiereck, D., Sigl-Grüb, C., Voigt, C. (Eds.) (2006). The German Brewing Industry. Verlag Wissenschaft & Praxis. https://doi.org/10.3790/978-3-89644-343-4

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The German Brewing Industry

Editors: Schiereck, Dirk | Sigl-Grüb, Christoph | Voigt, Christian

Rheingauer Monographien

(2006)

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Publisher Name: Verlag Wissenschaft & Praxis
ISBN: 978-3-89644-343-4
978-3-89673-343-6 (print edition)
DOI: https://doi.org/10.3790/978-3-89644-343-4
Edition: 1
Language: English
Pages: 370
Collections: NBE WISO
NBE D&H
Subjects: Corporate finance

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Institution: € 106.00 (incl. local VAT if applicable)
Individual: € 69.90 (incl. local VAT if applicable)

Abstract

This book is a compilation of articles which emerged from the »Project Course M&A - the German Bewing Industry« at the European Business School, Oestrich-Winkel. The design of this project course has a special character. Departing from a single industry, the students were asked to filter and elaborate on relevant aspects of finance related to M&A activities in this industry.

Due to the underlying concept, the articles in this book cover a wide range of M&A-related topics. Starting with descriptive issues of brewing companies and deals, continuing with an empirical evaluation of trading and transaction valuation of aquirers and targets, going further to the issue of constructing industry indices and finally widening the focus to Central and Eastern European beer markets, this book provides insights into an industry which can hardly be found in one single source and in this compactness. On top, insights on depicted transactions are provided in the form of case studies.

Section Title	Page	Action	Price
Preface	I
Overview of Content	IV
Table of Content	V
Jochen Gast and Christian Johansson: A Case Study: The Acquisition of Holsten Brauerei AG by Carlsberg A/S	1
1 Introduction	1
2 The Main Characters	1
2.1 Facts and Figures	1
2.2 Holsten - Background and History	2
2.3 Carlsberg - Background and Growth Strategy	5
3 The Take-Over of Holsten	6
3.1 Reasons for the Take-Over of Holsten	6
3.2 The New Brand Structure	8
3.3 The Transaction	10
3.3.1 Course of Events	10
3.3.2 Financial Terms	10
3.4 Risks of the Acquisition	12
3.5 Reactions to the Announcement of the Acquisition	13
3.5.1 Analysts' Opinions	13
3.5.2 Market Reaction	14
4 Ex-Post Analysis	15
5 Conclusion	16
Appendix	18
References	23
Β M&A-Activities in the German Brewing Industry	26
Mirko Jablonsky and Patrick Zenz-Spitzweg: I Descriptive Statistics - Merger Waves and Multiples	27
1. Introduction	27
1.1. Objective of the Study	27
1.2. Course of Analysis	28
2. Theoretical Background	28
2.1. Basic Considerations Regarding the German Beer Market	28
2.2. The Concept of Multiple Valuation	31
3. Merger Statistics	33
3.1. M&A Activity in the German Brewing Market	33
3.2. Selected Transactions in the German Market	35
3.3. German vs. International Transactions	38
4. Conclusion and Future Outlook	41
Appendix	43
References	49
Diana Diekmann and Heiko Weber: II Trading Multiples in the German Brewing Industry	51
1 Introduction	51
1.1 Objective of the Study	51
1.2 Course of Analysis	52
2 Conceptual Foundation of Valuation Methodologies	53
2.1 Definition of Trading Multiples	53
2.2 Equity Multiples	55
2.2.1 Cash Flow Multiple	55
2.2.2 Price/Earnings Ratio	56
2.3 Enterprise Multiples	56
2.3.1 Sales Multiple	56
2.3.2 EBIT Multiple	57
2.3.3 EBITDA Multiple	58
3 Analysis of Trading Multiples in the Brewing Industry	58
3.1 Description of the Data Sample and Multiple Calculation	58
3.2 Calculation and Analysis of Trading Multiples	61
3.2.1 Equity Multiples	61
3.2.1.1 Cash Flow Multiple	61
3.2.1.2 Price/Earnings Ratio	62
3.2.2 Enterprise Multiples	64
3.2.2.1 Sales Multiple	64
3.2.2.2 EBIT Multiple	65
3.2.2.3 EBITDA Multiple	66
4 Conclusion and Final Remarks	67
Appendix	70
References	76
Sarah Ali Khalil Ibrahim and Katharina von Bassewitz: III Transaction Multiple Valuation in the German Brewing Industry	77
1 Introduction	77
1.1 Objective of the Study	77
1.2 Course of Analysis	78
2 Multiple Valuation Foundation	79
2.1 Conceptual Basics of Multiple Valuation	79
2.2 Overview of the Most Commonly Applied Multiples	82
2.2.1 Sales Multiples	83
2.2.2 EBIT Multiple	83
2.2.3 EBITDA Multiple	84
2.3 Drivers of Variation in Multiples	85
3 Analysis of Transaction Multiples in the German Brewing Industry	86
3.1 Description of the Data Set	86
3.2 Initial Evaluation of the Assessed Transaction Multiples	87
3.2.1 Description of Sales Multiple Levels	87
3.2.2 Description of EBIT Multiple Levels	88
3.2.3 Description of EBITDA Multiple Levels	89
3.3 Evaluation of Multiple Levels with Value Drivers	90
3.3.1 Growth	90
3.3.2 Profitability	91
3.3.3 Size	92
3.3.4 Intensity of Investments	92
3.3.5 Transaction Advisor	93
3.3.6 Premium	93
4 Concluding Remarks and Outlook	94
Appendix	96
References	102
Sebastian Schels and Tim Knipps: C Case Study: The Acquisition of Würzburger Hofbräu AG by Kulmbacher Brauerei AG	103
1 Introduction	103
2 The Acquirer: Kulmbacher Brauerei AG	104
2.1 Company Background	104
2.2 Product Portfolio	104
2.3 Corporate Strategy	105
2.4 Shareholder and Holding Structure	106
2.5 Financial Data	107
3 The Target: Würzburger Hofbräu AG	108
3.1 Company Background	108
3.2 Product Portfolio	108
3.3 Corporate Strategy	109
3.4 Shareholder and Holding Structure	109
3.5 Financial Data	110
4 Strategic Rationale	112
4.1 Würzburger Hofbräu Under External Pressure	112
4.2 Kulmbacher Brauerei AG's Strategic Decision	113
4.3 Shareholders' Interests	115
5 The M&A Deal	116
5.1 The Transaction	116
5.2 Capital Market Reaction	119
6 Financial Rationale	120
6.1 Valuation of the Target	120
6.2 Analysis of Comparable Transactions	121
7 Conclusion	122
References	124
D Short and Long Term Performance of M&A Activities in the German Brewing Industry	128
Florian Geiger and Tobias Roediger: I M&A Announcement Effects on Bidders in the German Brewing Industry	129
1 Introduction	129
1.1 Objective of the Study	129
1.2 Course of Analysis	130
2 Review of Literature	131
3 Empirical Analysis	132
3.1 Derivation of Hypotheses	132
3.2 Event Study Approach	135
3.2.1 Methodology	135
3.2.2 Tests for Statistical Significance	138
3.3 Data Selection	138
3.3.1 Data Base Selection Criteria	138
3.3.2 Characteristics of the Data Sample	139
3.4 Discussion of Results	140
3.4.1 Cumulative Average Abnormal Returns	140
3.4.2 Comparison of Subsamples	142
3.4.3 Multivariate Regression	144
3.5 Implications	146
4 Summary and Conclusion	147
Appendix	149
References	153
Jörg Gerbig and Felix Zawadzky: II M&A Announcement Effects on Targets in the German Brewing Industry	159
1 Introduction	159
1.1 Objective of the Study	159
1.2 Course of Analysis	160
2 Review of Literature	160
3 Introduction of Hypothesis	163
4 Sample	165
4.1 Data Collection and Data Revision	165
4.2 Descriptive Statistics	166
5 Methodology	168
5.1 Determination of Event Windows	168
5.2 Examination and Aggregation of Abnormal Returns	168
5.3 Examination of Statistical Significance	170
5.4 Analysis of Influencing Factors	171
6 Results	172
6.1 Share Price Reactions	172
6.2 Influencing Factors on Share Price Reactions	174
7 Conclusion	176
Appendix	178
8 References	181
Jens Anderson and Jörg Homann: III Long-Term Performance in the German Brewing Industry - Acquirer versus Non-Acquirer	187
1 Introduction	187
1.1 Objective of the Study	187
1.2 Course of Analysis	188
2 Review of Literature and Formulation of Hypotheses	188
2.1 Review of Literature	188
2.2 Formulation of Hypotheses	192
3 Sample and Data Description	192
4 Methodology	194
4.1 Long-term Performance Study Methods	194
4.2 Methodology Selection	199
4.2.1 Estimation of Abnormal Returns	199
4.2.2 Test Statistic	203
5 Empirical Results	205
5.1 Long-term Results	205
5.2 Short-term Results	206
6 Summary and Concluding Remarks	209
Appendix	211
References	215
Claus Naarmann and Dominikus Priller: E Case Study: The Acquisition of Brau und Brunnen by RB Brauholding	221
1 Introduction	221
2 Profiles of the Involved Companies	222
2.1 The Bidder - RB Brauholding (Radeberger)	222
2.2 The Target - Brau und Brunnen AG	224
3 The Transaction	227
3.1 Course of the Transaction	227
3.2 Transaction Price and Valuation Issues	229
3.3 Reaction of the Share Price of Brau und Brunnen AG	231
4 Strategic Rationale behind the Transaction	232
5 Evaluation of the Transaction	235
6 Conclusion	238
Appendix	240
References	242
F The German Brewing Industry in an International Comparison	246
Ulf Dobberke and Florian Voigt: I Index for listed Breweries in Germany	247
1 Introduction	247
1.1 Objective of the Study	247
1.2 Course of Analysis	247
2 Foundations	248
2.1 Overview of the German Brewing Market	248
2.2 Index Basics	250
3 Description of the Data Sample	251
4 Index Calculation Methodology	252
4.1 Performance versus Price Index	252
4.2 Index Formula	253
4.3 Index Weighting and Free Float	255
4.4 Correction Factor	256
5 Performance Analysis	257
5.1 Holsten as the Key Driver of the BEX	257
5.2 BEX-Germany versus DAX, MD AX and EuroS toxx	260
6 Conclusion and Outlook	263
Appendix	265
References	267
Nils Steiner and Bastian Biesenbach: II Developing a European Brewing Industry Index	269
1 Introduction	269
1.1 Objective of the Study	269
1.2 Course of Analysis	270
2 Indexation for the European Brewing Industry	270
2.1 Overview on Index Types	270
2.2 Reasons for a European Brewery Index	271
2.3 The European Brewing Industry Index (EuroBEX)	272
3 Methodology and Sample	273
3.1 Methodology	273
3.1.1 Method of Index member selection	273
3.1.2 Calculation of the EuroBEX	274
3.1.3 Quarterly Index Adjustment	275
3.2 Sample	276
4 Results	278
4.1 Analysis of the EuroBEX	279
4.2 Analysis of the BEX in an M&A Context	281
5 Conclusion	283
References	285
Jens Tegelaers: III Performance Index UK versus Germany	287
1 Introduction	287
2 General Overview	288
3 Market Structure	290
3.1 German Brewers	290
3.2 UK Brewers	291
4 Setting up the Index	292
4.1 Sample	292
4.2 Index Method	293
4.3 Examination Period and Data	294
4.4 Weightening and Capping	294
5 Results and Observations	295
5.1 Currency Adjustment	296
5.2 Risk and Return	297
5.3 Problems and Constraints	299
5.4 Additional Remarks	300
6 Conclusion	301
References	303
Philip Janßen and Carsten Düber: IV A Consolidated View on Central and Eastern European Beer Markets Including Russia and China	305
1 Introduction	305
1.1 Objective of the Study	305
1.2 Course of Analysis	306
2 Comparative Analysis of Global Beer Markets	307
2.1 Mature Versus Emerging Markets	307
2.2 Macroeconomic Analysis	308
2.2.1 Drivers of Growth	308
2.2.2 Focal Point Emerging Markets	309
2.3 Microeconomic Analysis	310
3 Consolidation in the Global Beer Market	312
3.1 Long-Term Benefits for the Buyers	312
3.2 Contemporary Development	313
3.3 Long-Term Benefits for the Sellers	314
4 Market Environment and Related Strategies	315
4.1 Consumption Trends	315
4.2 Analysis of Beer Prices	316
4.3 Market Life Cycles	318
4.4 Developments in Eastern Europe Including Russia and China	320
4.5 Main Brewers	322
4.6 Strategic Considerations	323
4.6.1 Plausible Alternatives	323
4.6.2 The Influence of Scale and Market Fragmentation	323
4.6.3 Choices Depending on Market Maturity	324
5 Portraying Outperformers	325
5.1 Ukraine	325
5.2 Russia	328
5.3 The People's Republic of China	331
6 Conclusion	335
Appendix	337
References	351

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