DENMARK – Danish brewing and beverage company, Royal Unibrew, has withdrawn its intentions of acquiring Aqua d’Or mineral water brand, the leading Scandinavian mineral water producer with a strong market presence in Denmark and Sweden, from Danone.
The deal, first revealed back in November 2021, has been scrapped after both parties “determined that they will not be able to fulfill the closing conditions”, a Royal Unibrew statement said.
The transaction between the two companies had been expected to close during the first half of 2022, subject to approval from the Danish Competition Authority.
The acquisition was associated with activities that have a strong organization and a modern production facility in Central Jutland, Denmark.
It would have provided additional capacity and diversified the Danish company’s production footprint while also providing access to new sales channels for Royal Unibrew.
In March, the CEO of the French multinational food-products corporation said the global food and beverage giant would either fix the underperformers or let them will go out and expect a rotation of about 10% of assets or sales.
He stated: “We want to do it in a way that is value-creating, which means that if you need to disentangle something in whichever category, you want to do it in a way that doesn’t throw the rest of the category into chaos,”
“One of the problems we are facing in terms of competitiveness is [the] underperforming of some assets, which have been underperforming for a long time. So we will be very determined. If we cannot fix them, we will sell them, and then we have no taboo or sacred cows.”
Last week, Royal Unibrew reported a 12% net revenue growth organically despite unprecedented inflation that is both impacting its cost levels, consumers, and customers.
The company has gone ahead to cut its annual EBIT forecast, pointing to a tougher pricing environment than anticipated across the business and changed consumer behavior, which drives a negative mix.
Royal Unibrew also associates the cut to customer destocking driven by the high inflationary environment and general uncertainty, which strengthens the wholesalers’ focus on cash management.
However, the company noted that its Italian business continues to gain market share in both beer and CSD according to sell-out market share data, in both On-Trade and Off-Trade.
It now sees its full-year EBIT reaching “around DKK1.6bn” (US$211.5m) in 2022, lower than its earlier forecast – set before the invasion of Ukraine – of DKK1.7bn to DKK1.85bn.