United Malt backs $1.5bn takeover bid from French malt giant Malteries Soufflet

South Australia’s 162-year-old Coopers Brewery will remain the last independent player in the country’s malt industry following the $1.5bn takeover of United Malt by the French.

South Australia’s 162-year-old Coopers Brewery is the last Australian standing in the nation’s malt industry following the agreed $1.5bn takeover of United Malt.

The family-owned Coopers is now on track to be the largest locally owned maltster to match its trophy of also being the largest Australian-owned beer producer.

United Malt agreed on Monday to a $1.5bn takeover from French malt giant Malteries Soufflet that will see it grab control of the world’s fourth-largest maltster and a key supplier of crucial malt ingredients to the beer, craft beer and whisky companies.

The agreed takeover deal, which has won over the unanimous support of the United Malt board, also means the last of the large Australian maltsters is now in foreign hands with French, Belgian and other European interests now dominating Australia’s malt industry.

Coopers Brewery will emerge as the largest Australian-owned maltster courtesy of its 60,000 tonne malt processing facility that cost $65m and was opened in 2017.

Tim Cooper, the boss of Coopers Brewery, told The Australian the brewer was pleased to hold the title of the largest Australian-owned beer maker and to soon add to that the nation’s largest locally owned maltster as well.

“We are proud to be in that position because so many of us want Australia to be successful in so many ways, and it’s one of those things when you do reach that title of largest of anything, brewer or maltster, it’s a privilege and something to be proud of,” Dr Cooper said.

The Cooper’s malt facility exports around 70 per cent of its malt to Asia, led by countries such as South Korea, Vietnam, Singapore and Japan, with the balance used for Cooper’s own beer products.

Meanwhile, shares in United Malt rallied 8.6 per cent to $4.78 on the agreed $5 a share takeover bid in a higher market.

Malteries Soufflet doesn’t look to have been persuaded to walk away from its takeover discussions after United Malt in April unveiled a profit downgrade that warned investors it expected first-half underlying earnings of $51m, down from the previous guidance of $58m to $66m.

That earnings downgrade was driven by drinkers lessening their beer intake and reflected softer consumer sentiment across the globe that was hurting brewers.

In March, it was revealed Malteries Soufflet had first approached the United Malt board in December with an indicative offer set at $4.15 per share and that between then and March it had pushed the price up to $5 per share, which was eventually enough to get the board to proceed to discussions and a potential deal.

United Malt was demerged from GrainCorp three years ago and is the world’s fourth-largest maltster. It has facilities across Australia, Britain and North America including a newly expanded distilling plant in Inverness, Scotland, which has had $50m invested in its expansion.

Malteries Soufflet, one of the top three operators in the global malt industry and a subsidiary of leading European agricultural group InVivo Group, will become the world’s largest maltster if its grab for United Malt is successful.

On Monday, United Malt announced in a statement to the ASX that it had entered into a scheme implementation deed with Malteries Soufflet under which Malteries Soufflet has agreed to acquire 100 per cent of the shares in United Malt by way of a scheme of arrangement.

Under the Scheme, United Malt shareholders will receive $5 a United Malt Share in cash, which represents a 45.3 per cent premium to United Malt’s closing share price on March 24, which was before United Malt shares entered a trading halt and the takeover bid was later revealed.

United Malt is the fourth biggest maltster in the world, with its malt going into beer, craft beer and whisky.

United Malt directors have unanimously recommended that shareholders vote in favour of the scheme at the scheme meeting, in the absence of a superior proposal and subject to the independent expert concluding in the independent expert’s report that the scheme is in the best interests of United Malt shareholders.

Chairman Graham Bradley said the scheme provided United Malt shareholders with an opportunity to realise value for their shares at an attractive premium.

“The United Malt board believes that the scheme consideration appropriately reflects the value of our asset portfolio and the anticipated improvement in our near term earnings outlook.

“The United Malt team will work closely with all of our stakeholders, including our employees, customers and suppliers, to ensure their interests are appropriately taken into account during the scheme process.”

Managing director Mark Palmquist said the strategic rationale for establishing United Malt as a stand-alone malt company included enabling the company to pursue a separate growth agenda and potentially participate in industry consolidation opportunities.

“Malteries Soufflet is one of the world’s leading malt producers, operating 28 malt houses across Europe, Latin America, Asia and Africa and is a strong complement to our business.

“If the scheme is implemented, United Malt will have the opportunity to build on its strategic progress since the demerger and leverage the combined strengths and larger platform of both businesses to further capitalise on key growth opportunities.”

Thierry Blandinières, chairman of Malteries Soufflet and CEO of InVivo Group, said the company was excited to announce this significant milestone in its acquisition of United Malt.

“This marks an important step in the implementation of our strategy to create a global platform in the malt sector.

“With complementary assets, both in terms of geographical footprint and business segments, the combination will enable us to better serve our customers from craft and industrial beer brewers to whisky distillers across international markets. We look forward to welcoming the talented United Malt team and enhancing Malteries Soufflet’s expertise, capabilities and global network.”