Premium mixer maker Fevertree has secured a deal with US beverage giant Molson Coors that will see the latter take an 8.5 per cent stake in the British-based company for £71 million, or 654.2p per share.
The move, underpinned by an exclusive licensing agreement, aims to boost Fevertree’s sales, distribution and production footprint across the United States.
Shares in Fevertree, which floated at just 134p in 2014, leapt by 20.2 per cent on Thursday to close at 791p—though this remains far short of the record high of £39.56 set in September 2018. Proceeds from the new stake sale will be returned to Fevertree shareholders through a buyback programme.
Molson Coors, the Chicago-headquartered name behind Carling and Doom Bar, has been broadening its non-alcoholic portfolio in response to declining beer sales, with shipments of US beer last year hitting their lowest levels since the 1990s. “This is a meaningful step towards becoming a total beverage company,” said Gavin Hattersley, Molson Coors’ chief executive, highlighting the opportunity to diversify into premium mixers.
Fevertree founder and CEO Tim Warrillow called the deal a “transformational step”, adding that it reflects growing demand for higher-quality mixers across multiple drink categories in the US, now Fevertree’s biggest market by revenue.
Under the agreement, Molson Coors will leverage its extensive American sales and distribution network, as well as operational scale, to amplify Fevertree’s presence. The new partnership is expected to improve the mixer maker’s cash conversion in the US, reducing working capital needs.
Some analysts, such as Fintan Ryan at Goodbody, believe relinquishing direct operational control could prove a strategic trade-off. However, Matthew Webb of Investec and Anubhav Malhotra at Panmure Liberum suggest that the deal not only unlocks fresh capital returns for Fevertree shareholders but also secures Molson Coors as a potential long-term acquirer of the brand.
Meanwhile, Fevertree reported a modest 1 per cent increase in full-year group revenues to £367.9 million and signalled a likely dip to low single-digit revenue growth in 2025 as it transitions its US operations to Molson Coors.
This tie-up follows other high-profile industry collaborations, including Carlsberg’s recent $4.2 billion purchase of Britvic, the British drinks maker behind Robinsons and J2O, as brewers and beverage groups continue to expand into alternative and soft-drinks markets.
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Fevertree taps Molson Coors with £71m stake sale to fuel US growth