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Scottish & Newcastle Agrees To $15.3 Billion Acquisition

Brewers Carlsberg and Heineken will buy beermaker Scottish & Newcastle for $15.3 billion; two earlier bids were rejected.

LONDON (AP) β€” Brewers Carlsberg and Heineken will buy beermaker Scottish & Newcastle for $15.3 billion, the companies said Friday.
Scottish & Newcastle PLC, which rejected two earlier bids, agreed to an all-cash offer of 800 pence ($15.68) per share.
The offer values the existing share capital of S&N at 7.6 billion pounds ($14.9 billion), and the bidders said they plan to issue another 200 million pounds worth of shares.
The price is a premium of 50.7 percent over the closing share price on March 28, the day before speculation arose about a possible bid for S&N.
If the deal goes through, Copenhagen-based Carlsberg A/S would gain sole ownership of Baltic Beverages and S&N's French, Greek and Chinese operations, while Amsterdam-based Heineken NV would take control of its British, American, Indian and other markets.
Baltic Beverages operates 19 breweries, holding the top position in the Russian, Baltic and Kazakh beer markets, and ranks third in Ukraine. Its brands include Baltika, Arsenalnoe, Slavutich and Alma-Ata.
Sam Hart, analyst at Charles Stanley & Co., predicted that there would be no difficulty in gaining regulatory approval in the U.S., European Union, Russia and Ukraine.
''The emergence of counter-bidders looks very unlikely, given the level of the offer and unattractive growth prospects in S&N's core Western European markets,'' Hart added.
''We now have full control of our destiny in Russia and other BBH territories and I am truly excited about the new opportunities this will present to us,'' said Jorgen Buhl Rasmussen, president and CEO of Carlsberg.
Jean-Francois van Boxmeer, chairman and CEO of Heineken, said the deal made his company the leading brewer in Europe and created ''significant opportunities in profitable markets to grow the premium Heineken brand.''
Part of Heineken's interest in S&N was getting into the U.K. cider market, which is growing nearly 20 percent per year, the company said.
Iain MacLean, national officer of the Unite union, said he was concerned about the possibility of cuts in Scottish & Newcastle's work force of 3,300.
''We have a meeting with Scottish and Newcastle next week and we will be looking for Carlsberg Heineken to guarantee the security of our members' jobs,'' MacLean said.
Scottish & Newcastle shares rose 2.2 percent to close at 783 pence ($15.35) on the London Stock Exchange.
Carlsberg shares fell 4.1 percent to 535 kroner ($106.06) in Copenhagen.
Heineken shares fell less than a percent to 40.03 euros ($58.66) in Amsterdam.
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