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INTERVIEW-UPDATE 1-Carlsberg well placed for consolidation

Published 04/14/2011, 10:40 AM
Updated 04/14/2011, 10:44 AM

* Carlsberg Chairman sees brewery consolidation wave ahead

* Says Carlsberg could likely raise 40-50 bln DKK

* Carlsberg to take part in consolidation, no current plans

* Eyes fixed on Asia for growth

By Mette Fraende and Teis Jensen

COPENHAGEN, April 14 (Reuters) - Carlsberg will not sit back and watch when the brewery sector consolidates in the future, and could raise 40-50 billion Danish crowns ($7.72 billion - $9.65 billion) for acquisitions, its chairman said.

Expecting a big consolidation wave in the future, Chairman Povl Krogsgaard-Larsen told Reuters in an interview on Thursday that Carlsberg is well prepared to take the next step, after its 58 billion crowns acquisition of Scottish & Newcastle in 2008.

"Of course Carlsberg can raise a significant amount of capital, but this is not a signal that an acquisition is impending," said Krogsgaard-Larsen, chairman of the world's fourth biggest brewer after Anheuser-Busch InBev, SABMiller and Heineken.

"We don't have any such plans at this moment."

Various figures have floated around about how much Carlsberg could spend when it goes on the acquisitions path again.

Asked if Carlsberg could today raise 40-50 billion crowns for acquisitions, Krogsgaard-Larsen said "depending on the parameters included in raising capital, it is likely about that size."

"We have now paid down our debt to a manageable level...so that the day it becomes necessary, debt will not be a big problem," Krogsgaard-Larsen said.

"All the big brewers know that it (consolidation) will come in the future and are looking at their puzzles to see where there will be opportunities. Everyone is looking at that now," he said.

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"As a large player Carlsberg cannot, when this happens, sit back and watch."

Consolidation would occur because large scale is decisive for the world's brewers, Krogsgaard-Larsen said.

"Large scale is a factor which is of very big importance to earnings," he said.

ASIAN GROWTH PROSPECTS

World brewers, juggling rising raw materials prices and slowing growth in mature markets, are seeking growth elsewhere and aiming to pass on rising input costs to consumers.

Carlsberg's beer volumes in Eastern Europe fell organically by 9 percent last year, while Asian beer markets, largely unaffected by the 2009 economic crisis, saw 14 percent organic volume growth, Carlsberg said in its 2010 earnings report.

Carlsberg owns 35 breweries in Asia of which 19 are in China, six in Vietnam and five in India.

"In the Far East, primarily China and Vietnam, and all of Southeast Asia, there is a large focus for Carlsberg," the chairman said, adding there were no obvious acquisition targets in Europe.

"There is no doubt that Carlsberg constantly has its eyes on Western China where we are in a strong position and pleased to see that China's 'Go West' policy remains intact," Krogsgaard-Larsen said.

Eastern Europe accounts for about 44 percent of Carlsberg's total beer volume, Northern and Western Europe for about 43 percent and Asia the remaining 13 percent.

"The 13 percent will become more. We would like it to become as large as possible...we will see significant growth," he said.

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(Reporting by Mette Fraende. Editing by Jane Merriman)

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