C&C Group and AB Inbev to buy Matthew Clark and Bibendum from Conviviality
Magners and Tennent’s producer C&C Group is poised to buy Matthew Clark and Bibendum PLB from the failed Conviviality empire.
Brewing giant AB Inbev, which distributes Magners in the UK, is supporting C&C Group as it prepares to take over the supply businesses.
The deal includes subsidiary businesses Catalyst, Peppermint, Elastic and Walker & Wodehouse, while the Matthew Clark arm will give AB Inbev and C&C a strong route to the on-trade market.
The takeover is likely to be finalised later today, and C&C chief executive Stephen Glancey said: "We know the Matthew Clark and Bibendum businesses very well. They are great businesses with unparalleled on-trade market access, a wide range of supplier relationships and supported by a knowledgeable and loyal employee base.
The last few weeks have been challenging for employees, customers and suppliers alike. We hope today's announcement can put an end to this period of disruption and uncertainty.
“We look-forward to working with our new colleagues and other stakeholders to bring stability and restore the group’s position as one of the leading and most respected drinks suppliers to the UK hospitality sector.”
Matthew Clark and Bibendum supply more than 23,000 on-trade outlets, so the supply chain has been plunged into chaos following the collapse of Conviviality.
The news is a welcome shot in the arm for Matthew Clark and Bibendum PLB employees and the wider drinks trade.
But it leaves Conviviality’s retail arm, encompassing hundreds of Bargain Booze and Wine Rack stores, in limbo. They are not part of the deal, as C&C and AB Inbev are only interested in the supply and distribution side of the collapsed Conviviality empire. Many stores are shut, while others are facing up to barren shelves as they cannot source enough products to cater to their shoppers.
Conviviality shares were trading at a high of 426p in November 2017 but had fallen to 101p before they were frozen amid financial calamity at Conviviality last month.
Consideration for the shares will be a “nominal sum”, meaning investors are facing up to painful losses and some are considering suing the Conviviality board.
C&C will provide sufficient funds to support the on-going working capital and other cash requirements of the business.
When it all goes through, Matthew Clark Bibendum – the name of the new arm of C&C’s business – will have £102 million of working capital facilities provided by its current lender group, repayable in installments over the next year.
Matthew Clark Bibendum will be run as a separate business and C&C management believe the combination with C&C will create the leading independent route-to-market network across the UK, alongside C&C’s existing drinks wholesaling businesses in the UK and Ireland.