South Korea: Carlsberg sells remaining stake in Hite Brewery
Danish brewing giant, Carlsberg A/S, announced on June 13 the placement in the market of its 13.1% stake in Hite Brewery Ltd. Co. South Korea (“Hite”). Carlsberg has effectively sold 2,523,251 shares for a net cash consideration of approximately DKK 1.3 bn. Following the sale of the shares a pre tax gain of approximately DKK 600 m will be booked as a special item.
Following completion of this sale Carlsberg ends a seven year long and value creating involvement as a minority shareholder in Hite. This divesture is consistent with Carlsberg’s on-going commitment to free-up invested capital from minority positions where there is no clear path to control.
The profit after tax from this transaction will be approximately DKK 440 m. This was not included in the financial outlook for 2006 as stated most recently in the first quarter report dated 10 May 2006. Consequently, the gain from the sale of the shareholding leads to Carlsberg raising expectations for 2006 net profit to approximately DKK 1.65 bn.
Hite Brewery (000140.SE) last down 6.3% at KRW89,500 on the news, according to Dow Jones Newswires. "The stake sale will pressure Hite shares for a while as investors who bought the shares at the below-market price are expected to take profits," says Daewoo Securities analyst Baik On-Mok. Adds unclear 2H business outlook for Hite already priced into shares, any further downside likely supported at KRW88,000. Volume heavy about KRW2.9 billion.
Carlsberg is one of the leading brewing groups in the world, with a large portfolio of beer and soft drinks brands. Its flagship brand – Carlsberg – is one of the fastest-growing and best-known beer brands in the world. More than 30,000 people work for Carlsberg at 92 local production sites in 48 countries, and its products are sold in more than 150 markets. In 2005 Carlsberg sold more than 100 million hectolitres of beer, which is about 83 million bottles of beer a day. Find out more at www.carlsberg.com/info.
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