After earlier rumours in the press, (53,02 EUR, -0,13%) issued a press release to confirm it has started a strategic review of its Finnish Hartwall business. The strategic review was said to be expected to be finalised before the end of the year and will explore options for Hartwall, both inside and outside the group.
Hartwall was acquired as part of the Scottish & Newcastle transaction, and is active in beer, carbonated soft drinks, waters, long-drinks, wines, spirits and ciders. We believe annual beer volumes represent approximately 1m hl (out of a consolidated beer volume for the group that is estimated at about 189m in 2013, following the APB acquisition). Hartwall has a number 2 position in the Finnish beer market with a market share believed to be slightly in excess of one quarter.
already commented on the competitive nature of the Finnish beverage market in recent results releases. We lack separate financial figures on Hartwall which would allow to better judge the situation. Note that recent press rumours suggested a possible disposal price of about L 500m. Clearly, Hartwall is too small to impact our investment case on . We continue to believe is too undervalued vs. its larger brewing and FMCG peers. Hence we reiterate our BUY rating and € 57 target price.