UK brewer - impact on business value of proposed new venture

The client, a leading UK branded brewer, was exploring opportunities for improving efficiency and reducing the cost of its existing distribution activities through a joint venture with another brewer and a logistics company. The client required assistance in understanding the absolute value of its contribution to the proposed joint venture; the relative value of the three parties' contributions; and the financial impact, both immediately and on an ongoing basis.

The PwC team immediately saw fundamental differences between the objectives of the three parties involved in the project. The team assisted the client in communicating its objectives to the other parties and to develop more suitable financing and operating structures. By developing an integrated financial model that captured both the one-off and ongoing effects of the venture, PwC helped the client understand the financial implications of the project. It also provided the brewer with support in their negotiations, making their arguments more compelling through rigorous financial analysis.

The PwC team was able to present arguments from the perspective of the relative value of the contributions being made and the ongoing return to each party. The combination of technical valuation skills and the team's experience of joint venture arrangements enabled our client to better understand the implications of a major business decision. PwC's analysis and insight helped the brewer gain an improved understanding of potential risk factors.