ii view: C&C Group shares ascend on Asahi acquisition
Pursuing a strategy to add business optionality and flexibility as well as being sat on an attractive estimated future dividend yield. Buy, sell, or hold?
14th September 2026 12:10
by Keith Bowman from interactive investor
Business acquisition and trading update
Chief executive Roger White said: “This move represents an attractive opportunity to provide a significant number of new customers with MCB [Matthew Clark Bibendum] market-leading service and range proposition while simultaneously delivering immediate scale and efficiency into the group’s operations, in line with our strategy.
“We expect the majority of the customer and supplier transitions to be completed in the coming weeks, and for the acquisition to make a small positive contribution to the overall financial performance of MCB in FY27.”
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ii round-up:
Drinks maker and distributor C&C Group (LSE:CCR) announced the acquisition of the UK wholesale arm of Japanese brewer Asahi for a nominal sum.
The deal sees the Irish maker of drinks such as Bulmers & Tennent’s enter into a long-term business partnership with Asahi. The newly acquired wholesale interests are to be integrated into C&C’s MCB distribution business with the transaction expected to complete in early October.
Shares for the company rose 10% in post-announcement trading having come into this latest news down by around a third year-to-date. Shares for fellow drinks makers Diageo (LSE:DGE) and Fevertree Drinks (LSE:FEVR) are little changed so far in 2026, while shares for spirits maker Pernod Ricard SA (EURONEXT:RI) are down 16%.
Other C&C Group brands include Magners and Blackthorn cider. The deal will see MCB assume all customer and supplier relationships and agreements alongside a leased depot, intellectual property, and certain assets including vehicles and stock.
The Dublin-headquartered company also flagged broadly inline trading for the first half to late August. Total revenues fell 3% year-over-year, with a 3% rise for branded drink sales more than countered by a 4% fall for distribution.
Distribution weakness came about owing to the planned exits from some lower-margin customer business as well as ongoing declines in pub numbers and certain drink categories.
Management continues to predict first-half adjusted operating profits of between €43-44 million (£38 million) with full-year expectations also unchanged despite volatile market conditions.
A capital markets day is scheduled for 24 September.
ii view:
Started in 1935, the maker of drinks including Orchard Pig, Menabrea and Clonmel Irish larger employs over 2,500 people. Branded or drink-related profits dominated during its last financial year at 72%, with distribution the balance of 28%. Geographically, the UK made most sales at 85%, followed by Ireland at 14%, and other countries, including the US, at a combined total of 1%.
For investors, distribution profits proved pressured during the group’s last financial year given an increased consumer preference for long alcoholic drinks and pushed by elevated pub prices. The impact of the weather on sales cannot be ignored. Previous operational challenges have included a new computer system and the pandemic, while C&C lacks the geographical diversity of sales found at rival drink makers such as Diageo.
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On the upside, the move to acquire Asahi’s UK wholesale operations is expected to make a small positive contribution to the overall financial performance of MCB during the full year 2027. A previously outlined change of strategy focusing on the two separate areas of drinks and distribution, as well as this Asahi deal, potentially raise the prospect of a business sale going forward. Other management pushes previously flagged included operational simplification and cost discipline, while group net debt excluding leases of €121 million (£104 million) as of late February sits comfortably below a current stock market value of £372 million.
In all, the highly challenging backdrop for the hospitality industry continues to warrant some caution. That said, this latest business initiative as well as an estimated future dividend yield of around 5% are likely to keep more speculative investors firmly interested.
Positives:
- Strong brand names
- Diversity of operations
Negatives:
- Uncertain economic outlook
- Exposure to fuel prices given distribution and brewing
The average rating of stock market analysts:
Buy
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