Czech Republic: Soft Drink Maker Buys the Countries Fifth-Largest Brewery Group

Czech soft drinks maker Kofola CeskoSlovensko announced today to enter the beer business by acquiring a majority stake in Czech’s fifth-largest brewing group Pivovary CZ Group.

Pivovary CZ Group has an annual production this year exceeding 800 thousand hl, of which more than a third of the beer is destined for export markets. The company employs almost 500 people in its breweries in Hanušovice, Přerov and Litovel. The Holba, Zubr and Litovel brands have been brewed here for more than 130 years. In 2022, Pivovary CZ Group generated annual revenues of CZK 1.300 million (USD 58 million), and the EBITDA reached CZK 250 million(USD 11.3 million).

Kofola said in a press statement that the group plans to “enter another category at the regional level in which it can use its business, distribution and marketing know-how.”

"At Kofola we have learned to develop traditional and local brands with a strong story,” explained Jannis Samaras, CEO of the Kofola Group. “When the opportunity arose to invest in breweries that produce brands with a long history, backed by honest craftsmanship and modern production facilities, we didn't hesitate. We believe that the experience of our people can help their development."

Pivovary Triangl s.r.o., in which Kofola holds a 51% stake will buy 100% of the shares of Pivovary CZ Group and a 100% stake in Fontána PCZG from its former owners Moravská pivovarská a.s.. The company Fontána is engaged in wholesale beer and non-alcoholic beverage sales.

In addition to the family-owned beverage company, two minority shareholders are behind the acquisition of Pivovary CZ Group. Kofola ČeskoSlovensko a.s. will become a 51% owner of the brewery company, the other co-shareholders are the investment group RSJ (29%) and Úsovsko a. s. (20%).

 “We are glad that we have found a partner who will help us to maintain and further develop the quality of our beers and at the same time strengthen their business expansion," explained Jaromír Dvorský, Vice-Chairman of the Board of Directors of Pivovary CZ Group.

"Although we are not primarily concerned with direct synergies with our existing non-alcoholic business, the beer industry also has some common features with the beverage industry. Our goal is to support the art and quality of Czech breweries. It would be a shame if traditional Czech brands were to fall into the hands of foreign investors," explained René Musila, one of the founders and COO of Kofola Group, who will head the beer segment after the acquisition is completed.

Kofola, headquartered in Krnov, 60 km southeast of Ostrava/Czech Republic, is one of the leading soft drink producers and distributors in Central and Eastern Europe. It’s best known product is a carbonated soft drink that bears the same name as the company. Kofola is the principal rival of Coca-Cola and Pepsi in the Czech Republic and Slovakia.

The company was founded by Greek native named Kostas Samaras who discovered the potential of the Kofola brand in  the 1990s after the brand was nearly forgotten after the fall of the communist regime in the Velvet Revolution in 1989.Following a period of decline and trademark lawsuits the Samaras family became sole owner of the Kofola brand in 2000

In 2008, Kofola announced a merger with the Polish lemonade producer Hoop. In autumn 2008, the Polish Private Equity fund Enterprise Investors acquired in a Public Tender Offer 42.46% of Kofola-Hoop for approximately €140 million. Since then the company has expanded very fast into other beverage segments and countries. At the end of 2018, the Kofola Group operated in the Czech Republic, Slovakia, Poland, Slovenia, Croatia, Russia, Austria and Hungary.

Today, the son of Kostas Samaras, Jannis Samaras, is Chairman of the Board and Chief Executive Officer at Kofola CeskoSlovensko.

“Considering the specifics of the beer market and with humility towards the art of the breweries' employees, Pivovary CZ Group will remain an independently managed segment of Kofola,” the company said in the statement.

The parties have agreed not to disclose the price of the transaction. Completion of the transaction, which is subject to the approval of the competition authorities, is expected early next year.

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