By Louisa Fahy

Aug. 27 (Bloomberg) – C&C Group rose the most since June in Dublin trading after agreeing to buy some AB-InBev assets, gaining control of Scotland’s leading beer brand, Tennent’s, and a wider network to sell Magners cider.

C&C shares climbed as much as 13 percent. The 180 million- pound ($292 million) acquisition from AB InBev, the world’s biggest brewer, is expected to immediately boost earnings per share, C&C said today. The Dublin-based company will also get the rights to distribute brands including Stella Artois in Ireland, Northern Ireland and Scotland.

AB-InBev is selling assets to repay debt after the $52 billion merger that formed the company last year. As a result of the accord, C&C, grappling with falling cider revenue, gains Tennent’s, which accounts for 55 percent of lager sales to Scottish pubs. The deal is expected to boost operating profit by 10 million pounds a year by 2012, C&C said.

“We see the deal as significantly improving C&C’s trading prospects in Northern Ireland and Scotland,” Paul Meade an analyst at NCB Stockbrokers in Dublin, said in a note. “It marks a significant shift in strategy from being solely dependent on cider.”

Meade, who has an “accumulate” rating on the stock, said the deal will boost earnings by 4 percent in the first year. C&C  rose as much as 30 cents to 2.53 euros in Dublin and traded at 2.50 euros at 11:57 a.m. local time.

‘Iconic Brand’

“We are buying an iconic brand in Scotland so we can strengthen our cider business,” Chief Executive Officer  John Dunsmore told reporters on a conference call. “Having a portfolio of brands adds huge strength to Magners.”

The deal will allow C&C to transport its cider using the distribution network already used for ABI’s beverages in Scotland and Northern Ireland. The acquisition is expected to help C&C grow Magners sales in Scotland by at least 20 percent in the next two years, the CEO said in a phone interview.

C&C also reaffirmed its full-year profit target, saying the cider division’s performance was “encouraging” in the five months through July, with revenue down 4 percent excluding currency swings. Group revenue declined 5 percent on that basis during the period.

The beverage maker last month slashed its sales forecast, saying it expected a 5 percent revenue drop for the first four months of its financial year, excluding currency effects, as consumer spending suffered.

C&C will fund the deal from its cash and existing loan facilities. The acquisition is subject to shareholder approval and regulatory consent.

C&C was advised by Rothschild on the transaction, while Lazard Ltd. advised AB InBev.

Tags | ab-inbev, belgium, brewer, C&C, cider, ireland, magners, Production, scotland