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Molson Coors Beverage Co. announced Thursday that it has acquired an 8.5% stake in Fevertree Drinks PLC, the British premium mixer brand, for £71 million ($88 million). The deal is part of Molson Coors’ strategy to diversify beyond beer and expand Fevertree’s presence in the U.S. market.

Under the agreement, Molson Coors will acquire 10.8 million new shares in Fevertree at 654.2 pence per share in an all-cash transaction. The exclusive licensing deal will begin Feb. 1, with shares expected to be admitted to the Alternative Investment Market (AIM) of the London Stock Exchange on Feb. 5.

Molson Coors Sees Fevertree as Strategic Fit

Michelle St. Jacques, Molson Coors’ chief commercial officer, called Fevertree a “perfect fit” for the company’s growing non-alcoholic beverage portfolio.

“Fevertree sits at the intersection of beer and non-alcohol, and is often available in stores where beer is sold. It perfectly complements our alcohol and non-alcohol strategies,” St. Jacques said.

The U.S. has become Fevertree’s largest market, surpassing the U.K. The British brand entered the American market in 2008 and generated £60.3 million ($75 million) in revenue from North America for the first half of 2024, compared to £50.9 million ($63 million) in the U.K.

Fevertree CEO Calls Deal ‘Transformational’

Fevertree’s co-founder and CEO, Tim Warrillow, described the agreement as a “transformational step” for the brand’s growth in the U.S.

“With a national network, supply chain expertise, and a strong strategic vision beyond beer, Molson Coors is the ideal long-term partner to take Fevertree to the next level in the U.S.,” Warrillow said.

U.S. Expansion and Shareholder Returns

The exclusive license agreement gives Molson Coors control over Fevertree’s sales, distribution, and future production in the U.S.. Fevertree stated that the £71 million proceeds from the share issuance will be returned to shareholders through a buyback program starting in February.

The company’s total revenue for 2024 rose 1% to £368 million ($459 million). However, Fevertree warned that short-term pre-tax profits could dip as it transitions to its new U.S. partnership.

Market Analysts See the Move as a Strong Endorsement

Russ Mould, investment director at AJ Bell, said Molson Coors' investment is a “big endorsement” of Fevertree’s success in the U.S. market.

“For Molson Coors, shifting consumer habits mean there’s an incentive to diversify its portfolio. Despite Fevertree’s past supply chain challenges, it has built a strong premium mixer brand with lasting appeal,” Mould said.

Legal Counsel and Responses

• Molson Coors and Fevertree did not immediately respond to requests for comment.
• Counsel information for both companies was not immediately available.

The investment signals Molson Coors’ growing ambition in the premium beverage space, as the company positions itself for long-term growth in both alcohol and non-alcoholic markets.