Molson Coors Beverage Co has acquired a minority stake in UK-based mixer business Fever-Tree.
The Coors Light and Miller Lite brand owner will pay GBP71m (US$88m) for an 8.5% share in Fever-Tree as part of a strategic partnership arrangement to expand the tonic water producer’s US footprint. Fever-Tree will begin a share buyback in February worth the same amount.
Molson Coors, which will become Fever-Tree’s second largest shareholder, labelled the investment as a “significant step” in growing its non-alcoholic portfolio.
As part of the deal, the North American group will gain exclusive rights to sell Fever-Tree in the US and will manage the onshoring of production in the country.
“Our strategic partnership with Fever-Tree in the US is a meaningful step in Molson Coors’ journey to becoming a total-beverage company with a winning portfolio of drinks for a wide variety of consumer occasions,” said Molson Coors CEO Gavin Hattersley. “We’ve made progress here, and today we are building on that progress in a significant way with Fever-Tree as the latest and largest non-alc brand to join our portfolio.”
Fever-Tree’s biggest market by sales is the US, accounting for around 35% of sales. The company generated sales of GBP60.3m in the country for the six-month period to the end of June 2024.
Co-founder & CEO Tim Warrilow added: “With a national network providing significant scale and muscle, alongside its proven track record, supply chain expertise and clearly stated strategic desire to drive the future of their business beyond beer, Molson Coors are the ideal long-term partner to take the Fever-Tree brand to the next level across the US.”
Shares of Fever-Tree, which makes drinks including Madagascan Cola and Ginger Ale, were up 23.71% as of 10:14am GMT today. However, they remain down by more than 20% over the past 12 months.
Molson Coors, which booked a flat sales performance from the first nine months of 2024 in November, is scheduled to announce its full-year figures on 13 February.
