Partner Article

£7.8bn takeover for Brown Ale brewer

Brewer Scottish & Newcastle (S&N) last week agreed to be bought by Carlsberg and Heineken for £7.8bn. Newcastle Brown Ale producer S&N is the UK’s largest brewer. The company is set to be split up between Carlsberg and Heineken when the takeover is completed. S&N said it had begun talks with the two firms when they proposed an 800p-per-share offer, an offer it has now agreed to.

A S&N spokesperson said: “The S&N board believes that the consortium’s offer delivers a fair value for S&N, reflecting its growth prospects, and will be recommending that shareholders accept.”

Heineken said it would achieve savings of £120m annually, new distribution in the UK and access to the UK’s fast-growing cider market, as well as access to developing markets. The break-up plan means Heineken will acquire S&N’s British operations, including Strongbow cider and John Smith’s beer.

Dr Gioia Pescetto, Associate Dean and Senior Lecturer in Finance at Durham’s Business School, said: “The brewing industry is facing difficult market conditions worldwide and a global move towards industry consolidation. “Against this backdrop, S&N has done very well to push the Carlsberg-Heineken’s consortium to increase the offer four times and deliver better value to its shareholders.

“The combined strength of the brands and considerable savings opportunities could also be good news for the future of brewing in the UK and job security.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .