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DENVER (AP) â¿¿ Molson Coors will spend $3.54 billion to buy StarBev and its nine breweries in central and eastern Europe as it expands its operations further.
The Denver brewer is betting on a vibrant region once the economic crises subsides in the European Union, where unemployment has now reached the highest point since the euro was introduced in 1999.
"The central and eastern European beer market is attractive, with strong historical trends and upside potential as the region returns to its pre-economic-crisis growth rates," President and CEO Peter Swinburn said Tuesday.
The brewer slogged through a similar economic swamp recently, when the economic crises cut severely into the budgets of beer drinkers in the U.S. However, Molson Coors appears to have emerged leaner and stronger in its most recent quarter, and the U.S. economy appears to be on the mend. Beer sales are again on the rise.
StarBev had sales of about $1 billion last year, brewing more than 11 million barrels of beer.
The company, which brews Bergenbier, Ozusko and Borsodi beers, is owned by funds advised by CVC Capital Partners Ltd. and StarBev management.
A deal for StarBev would help Molson Coors put its brands, such as Carling, into the hands of beer drinkers in central and Eastern Europe.
StarBev has 4,100 workers and brewing operations in the Czech Republic, Serbia, Croatia, Romania, Bulgaria, Hungary and Montenegro. StarBev, is also a distributor of brands such as Stella Artois, Beck's, Hoegaarden, Lowenbrau and Leffe, and sells in Slovakia and Bosnia-Herzegovina as well.
Molson Coors has been forced to slash costs with beer sales crushed by the economic downturn that started in 2008, but those trends appeared to be turning around in the final quarter of fiscal 2011.
The company in February posted stronger-than-expected sales for the fourth quarter and notched a 35 percent increase in profit. That came after a dismal third quarter in which Swinburn compared the economic downturn and its effect on beer drinkers to an "earthquake."