3G Eyes Up Diageo in Latest Takeover Rumours
08 Jun 2015 --- Shares in international drinks group Diageo, which owns global brands such as Guinness and Smirnoff Vodka, have soared amid takeover rumours.
Reports suggest that the Brazilian billionaire businessman Jorge Paulo Lemann, at the helm of 3G Business Partnerships, is interested in buying the drinks company, one of the biggest in the world. Lemann has close connections in the food and beverage industry, having joined US serial acquisition specialist Warren Buffet (Berkshire Hathaway) in the purchase of food giants HJ Heinz and Kraft Foods, as well as international fast food chain Burger King.
Consolidation in the alcoholic beverage industry has been rife in recent years, with 3G playing a role in the creation of Latin American brewers, the consolidation of Interbrew and the subsequent recreation of Anheuser Busch Inbev, the world’s largest brewer, in 2008.
Some analysts have expressed scepticism at the possibility of such a deal. One, at Jefferies, was reported as saying that a leveraged buyout was unlikely, given that 3G would need to find around €43bn to fund the deal. Another, at Sandford C. Bernstein, thought the chances of a takeover in the near-term would seem slim, given the attention that 3G still needs to focus on the HJ Heinz/Kraft merger.
