C&C Group Shares Rise after Asahi Wholesale Acquisition and Trading Update

Shares in C&C Group (LON: CCR) rose 6.5% to around 95p on Friday, making the drinks group one of the standout movers on the London market, after it announced a deal to acquire Asahi UK’s wholesale operations and issued a first-half trading update broadly in line with expectations.

The move higher reverses a softer patch for the stock, which had drifted from around 98p at the start of September to below 89p earlier in the week, before Friday’s announcement sparked a sharp rebound.

C&C said it had agreed to acquire Asahi UK’s wholesale interests, including Nectar Imports and Asahi UK’s direct distribution business, for nominal consideration.

The businesses will be integrated into C&C’s Matthew Clark Bibendum (MCB) division following completion, expected in early October, with MCB also entering a long-term partnership tied to Asahi brands in the UK. The agreement includes the transfer of supply arrangements to the Fuller, Smith & Turner on-trade estate.

Alongside the deal, C&C reported that net revenues for the six months to 31 August fell 3% on a constant currency basis, as 2% growth in Branded revenue was offset by a 4% decline in Distribution. Underlying operating profit for the half is expected to come in at €43-44 million, in line with guidance.

Chief executive Roger White said the acquisition would deliver “immediate scale and efficiency” and should make a small positive contribution to MCB’s performance in the current financial year, as investors welcomed the low-cost expansion of the group’s distribution footprint.

Attention now turns to C&C’s Capital Markets Day on 24 September and interim results on 28 October.