Carlsberg was on the verge of disaster

16-08-2010 11:09 Without knowing it, Carlsberg was on the verge of disaster when the company in 2008 had to finance the acquisition of Scottish & Newcastle, chairman of the board, Povl Krogsgaard-Larsen, told Nyhedsbrev for bestyrelser (Newsletter for board of directors). The share issue was underwritten by the American banking and financial group Lehman Brothers, and a wise decision made by the beer giant ensured that Carlsberg was not affected by Lehman Brothers’ collapse on September 15, 2008. »In April 2008 we had just acquired Scottish & Newcastle, and we were going to finance the acquisition with a share issue. We discussed when it would be the best timing for Carlsberg – in the early summer or later in 2008. We decided in favour of the early summer. We raised about DKK 30.5 billion and were able to pay the Scottish & Newcastle’s shareholders,« said Povl Krogsgaard-Larsen, adding that the share issue would never have been possible without Lehman Brothers.

Mr. Krogsgaard-Larsen cannot say whether the decision was wise og just luck: »You are never 100 per cent lucky or 100 per cent wise. For my part, I did not like to wait for the share issue. In the unsettled times when the American mortgage lenders got into trouble, I did not want to wait. We had acquired Scottish & Newcastle, and we had to pay the shareholders. If, for example, we had only managed to raise DKK 12-15 billion in the share issue, we had been forced to cover the remaining DKK 16-19 billion with more bank loans. It would not have been easy to finance such an amount in the autumn of 2008.« In the share issue Carlsberg issued 76 million shares.