Endeavour Group merger complete, plans begin for separation

06 February, 2020 by Deborah Jackson

The merger of Endeavour Drinks and ALH Group came into effect on 4 February, creating Australia’s largest integrated drinks and hospitality business, Endeavour Group.

Woolworths Group currently holds 85.4 per cent of the combined Endeavour Group and 14.6 per cent is owned by Bruce Mathieson Group, Woolworths’ joint venture partner in ALH.

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Last week it was announced that veteran drinks executive Steve Donohue has been appointed CEO-elect of Endeavour Group to be supported by Colin Storrie as Chief Operating Officer and Chief Financial Officer (elect).

Experienced ASX 50 Director and global leader in the hospitality and food and beverage sector, Peter Hearl was announced as Chairman-elect of Endeavour Group in December and a Woolworths spokesperson has told National Liquor News that they are currently working on appointing the rest of the board.

Woolworths Group Chairman, Gordon Cairns, said: “With their in-depth knowledge of the industry and deep understanding of the business, they’re ideally placed to oversee the next phase of growth for Endeavour Group, while also sustaining and building on our existing partnership.”

Woolworths Group will now consider options for the planned separation of Endeavour Group, which is hoped to be achieved by the end of the financial year.

The merger of Endeavour Drinks and ALH makes Endeavour Group Australia’s largest integrated drinks and hospitality business with sales of around $10 billion and EBITDA1 of $1 billion.

It comprises highly integrated store-based and online offerings, with more than 1,500 BWS and Dan Murphy’s retail drinks outlets and 327 ALH hotels.

ALH retail drinks outlets currently comprise approximately 35 per cent of Woolworths Group retail drinks sales with 86 Dan Murphy’s and 512 BWS stores owned by ALH at the end of March 2019.

Other businesses included in the merger are Endeavour Drinks’ own and exclusive brands business, Pinnacle Drinks; Langton’s, a fine wine auction and retail business; Cellarmasters, a wine subscription business; and an 8.7 per cent stake in ALE Property Group.

Woolworths Group’s 1H20 results will be released on 26 February 2020 and will continue to report the results of the Endeavour Drinks and Hotels segments separately.

National Liquor News has reached out to Woolworths and will sit down for a chat with Endeavour Group CEO-elect Steve Donohue in the coming weeks.