Lehman Brothers Collection - Contemporary Business Archives

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Lehman Brothers Collection

Twentieth-Century Business Archives

The Carlsburg Breweries and the Tuborg Breweries, the United Breweries Limited - Lehman Brothers Collection

The Carlsburg Breweries and the Tuborg Breweries, the United Breweries Limited

List of Deals

Despite humble beginnings, Carlsberg Breweries grew to produce the signature beer of Denmark. Christian Jacobsen founded a brewery in 1817 in Copenhagen. His son J.C. Jacobsen then headed the brewery beginning in 1835. J.C. Jacobsen used a system of bottom fermentation and developed the first lager beer brewed outside Bavaria. In 1847 he built a new brewery, christening it Carlsberg after his son. J.C. Jacobsen used his profits to establish the Carlsberg Laboratory (1875), the Museum of National History at Frederiksborg Castle (1860), and the Carlsberg Foundation (1876). In 1868 Carlsberg began exporting beer to the U.K.

The Carlsberg Brewery's namesake, Carl Jacobsen, founded his own New Carlsberg Brewery (Ny Carlsberg) in 1871 to rival his father's now-Old Carlsberg (Gamle Carlsberg). The rivalry spawned innovation. J.C. Jacobsen developed steam brewing and some refrigeration methods, and in 1883 a Carlsberg Laboratory scientist discovered a way to produce a pure yeast, named Saccharomyces Carlsbergensis in Carlsberg's honor. In 1888 Carl Jacobsen and his wife Ottilia donated their considerable art collection to the Danish people and opened the Ny Carlsberg Glyptothek museum to display these works in 1897.

J.C. Jacobsen died in 1887, leaving Gamle Carlsberg to the Foundation. The Old and New Carlsberg Breweries were again linked in 1902, when Carl Jacobsen offered his brewery to the Foundation. The companies were re-integrated in 1906. Carl also established the New Carlsberg Foundation, a charitable organization that supports the arts. Profits from the Carlsberg Breweries have since gone to the Carlsberg Foundation.

Tuborg Factories Ltd. began in 1873 as a more wide-ranging public company, manufacturing beer, sulphuric acid, and fertilizer beside Tuborg Harbor outside Copenhagen. Eventually Tuborg focused on beer production, developing pasteurization techniques for beer and pioneering bottled beer sales. It merged with an assortment of small breweries, the United Breweries Ltd., in 1894. The oldest of the United Breweries had brewed beer since 1454. In 1931 the charitable Tuborg Foundation was established to support commercial and social ventures in Denmark.

Carlsberg and Tuborg Breweries entered a trade agreement in 1903. The companies agreed to share expenses and profits equally. Exports to the U.K. surged in the 1930s. Carlsberg opened a brewery in Malawi in 1968. Carlsberg and Tuborg merged in 1969. The Carlsberg Foundation transferred the Carlsberg Breweries assets to Tuborg in exchange for beneficial ownership of most of the stock shares.

At the time of the deal, Carlsberg-Tuborg produced beer, soft drinks, and mineral waters, with interests in breweries in eight countries including Great Britain, Turkey, Malaysia, and Iran. In Denmark alone the company employed 7,600 workers. In 1970, 125.4 million gallons of beer fermented in Carlsberg-Tuborg plants, and 16.5 million gallons of soft drinks and mineral waters. The company captured an 85 percent market share in Danish beer sales, and 24 percent of the finished beer was exported. Carlsberg-Tuborg held interests in glass manufacturing plants, carbon dioxide producers, and refrigeration.

The sale of $15 million in 8.75 percent 15-year bonds was intended to fund foreign investments and to retire other debt. In 1970, Carlsberg-Tuborg held 455.7 million Danish Kroner in share capital and reserves, with 279.8 million Kroner in debt (including this bond issue). Net profit for both companies in 1970 amounted to 59.7 million Kroner.

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