Scottish & Newcastle rejects takeover bid

European brewers Carlsberg and Heineken have put in a takeover bid for Scottish & Newcastle (S&N) but the group has rejected it saying the break-up bid is “unsolicited and unwelcome”. S&N has insisted that it is confident in its future as an independent group.

The European brewers have said informal talks have already taken place with Edinburgh-based S&N, Britain’s last remaining national brewer, but a formal offer had not been made.

Following the announcement, shares in S&N increased 119.5p valuing it at £7.14billion. However, analysts say bidders may end up paying at least £10 billion, £8 billion for the company and a further £2 billion to take on its debts.

Rumours that Carlsberg could bid for S&N has been escalating since May when the Danish firm altered rules over ownership which had been in place for 131 years. If successful, Carlsberg would be in charge of BBH, Russia’s No1 brewer, which it co-owns with S&N.

Furthermore, it would also take control of S&N’s interests in France, where it owns number one beer brand Kronenbourg 1664, and in Greece, where it makes Mythos, the market leader.

The Dutch brewer Heineken would get S&N’s operations in Britain, where it accounts for 2 in every 5 pints drunk and its other European businesses.

Heineken’s interest in S&N was a big shock to City analysts with some saying it was an odd move.

As well as Kronenbourg, S&N’s well-known brands are Strongbow, which makes up for more than 3 in every 5 pints of cider sold in the UK and Australian lager, Foster’s, and Britain’s number one ale brand, John Smith’s.

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