Molson open to buying craft breweries; believes targets in Canada and the US are 'massively overvalued'
Molson Coors Brewing (NYSE:TAP) believes that craft breweries in Canada and the US are "massively overvalued" to the point where they're generally too costly to acquire, according to a newswire report.
Bloomberg on Friday cited Molson CEO Peter Swinburn as saying the day prior that the company, while open to the possibility of adding more craft breweries to its stable, finds that valuations of craft breweries in North America are excessively lofty. He explained in the article that Canadian craft breweries are difficult to acquire on account of the tax advantages on their side, and US craft breweries are overvalued as a result of the growing popularity of the niche. While Molson is open to acquiring new brands, Swinburn said in the article that the company is not desperate to the point of "running around" North America or Europe to compel craft breweries owners to sell their companies to Molson.
Swinburn said in the article that Molson can accomplish its goals by acquiring, building or borrowing. He added that the company, which sells its Blue Moon brand in Japan and Australia, intends to operate in the craft breweries niche in those markets.
Meanwhile, the article, which noted that the major players in the beer space could experience further consolidation, added that Molson has been viewed by some investors as a potential takeover target down the road.