Scottish & Newcastle Agree To £7.8bn Takeover

Independent brewery group Scottish & Newcastle has today announced that it has reached agreement with Carlsberg and Heineken on the terms of a £7.8 billion takeover deal, which will see the company split up into different divisions allocated amongst Carlsberg and Heineken respectively and sees the culmination of weeks to hostility and rejection at the initial proposals.

The UK’s largest brewer has finally accepted the proposal from the two major brewing groups, in a move that has been on the cards for a number of weeks following two initial approaches which were both subsequently rejected and the involvement of the Takeover Panel in ushering the deal through.

The move will see the Edinburgh-based group divided between Carlsberg and Heineken, with Heineken adopting much of its European operation and Carlsberg enjoying the benefit of a 100% holding in key asset BBH, the Baltic regional brewery giant, which was one of the major bargaining tools available to Scottish & Newcastle throughout the discussions.

After receiving a twenty-four hour extension on the “put up or shut up” motion by the Takeover panel, the board of directors of the concerned parties have agreed on terms, with the Scottish & Newcastle board now looking to recommend to their shareholders that they accept the deal.

For Heineken, the move is expected to yield an annual cost saving of around £120 million, benefiting from the more streamlined distribution channels held by Scottish & Newcastle throughout the UK and Europe,

Meanwhile the deal is thought to be beneficial to Carlsberg by providing the remaining 50% of equity in their part-owned Russian subsidiary BBH, with a view to reaping the full benefits of this growing market.

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