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| Brewer S&N agrees £7.8bn takeover | Brewer S&N agrees £7.8bn takeover |
| (about 1 hour later) | |
| UK brewer Scottish & Newcastle (S&N) has agreed to be bought by Carlsberg and Heineken for £7.8bn ($15.3bn). | UK brewer Scottish & Newcastle (S&N) has agreed to be bought by Carlsberg and Heineken for £7.8bn ($15.3bn). |
| S&N is the UK's largest brewer, with brands such as Newcastle Brown Ale and Foster's, and is the world's seventh largest brewer by sales volume. | S&N is the UK's largest brewer, with brands such as Newcastle Brown Ale and Foster's, and is the world's seventh largest brewer by sales volume. |
| The company is set to be split up between Carlsberg and Heineken when the takeover is completed. | The company is set to be split up between Carlsberg and Heineken when the takeover is completed. |
| Edinburgh-based S&N employs 3,300 staff in the UK, with breweries in Reading, Manchester, Dunston and Tadcaster. | |
| The firm also employs more than 15,000 employees in direct operations in Europe, a further 15,000 in its BBH joint venture in Eastern Europe and more than 7,000 people in Asia. | |
| 'Transformational' | 'Transformational' |
| S&N received its first bid approach from Carlsberg and Heineken in October last year, when the two firms offered 720p-per-share. The approach was rejected, as were two further offers. | S&N received its first bid approach from Carlsberg and Heineken in October last year, when the two firms offered 720p-per-share. The approach was rejected, as were two further offers. |
| PLANNED S&N BREAK-UP Heineken to own S&N's UK operations including Strongbow cider, John Smith's beer, Newcastle Brown Ale and Foster'sHeineken to acquire S&N's operations in Portugal, Ireland, Finland and BelgiumCarlsberg to take full control of BBH, which includes the Baltika beer brandCarlsberg to acquire S&N's assets in France and Greece Carlsberg to acquire S&N's assets in Asia, notably in Vietnam and China Scottish & Newcastle's share priceScottish reaction | PLANNED S&N BREAK-UP Heineken to own S&N's UK operations including Strongbow cider, John Smith's beer, Newcastle Brown Ale and Foster'sHeineken to acquire S&N's operations in Portugal, Ireland, Finland and BelgiumCarlsberg to take full control of BBH, which includes the Baltika beer brandCarlsberg to acquire S&N's assets in France and Greece Carlsberg to acquire S&N's assets in Asia, notably in Vietnam and China Scottish & Newcastle's share priceScottish reaction |
| However, last week 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. | However, last week 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. |
| "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," S&N 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," S&N said. |
| The break-up plan means Heineken will acquire S&N's British operations, including Strongbow cider and John Smith's beer. | The break-up plan means Heineken will acquire S&N's British operations, including Strongbow cider and John Smith's beer. |
| 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. | |
| Carlsberg said the benefits of the deal included full ownership of BBH - the Russian-based joint venture between it and S&N - plus exposure to growth markets and cost savings. | Carlsberg said the benefits of the deal included full ownership of BBH - the Russian-based joint venture between it and S&N - plus exposure to growth markets and cost savings. |
| "For Carlsberg, it is a transformational transaction, which will deliver a major increase in its operational scale and long term growth prospects," said the firm's chief executive Jorgen Buhl Rasmussen. | "For Carlsberg, it is a transformational transaction, which will deliver a major increase in its operational scale and long term growth prospects," said the firm's chief executive Jorgen Buhl Rasmussen. |
| "In a single step, we have created the world's fastest-growing global brewer." | "In a single step, we have created the world's fastest-growing global brewer." |
| "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," he 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," he added. |
| Ownership of BBH, which owns Baltika beer, had led to a row after S&N said Carlsberg's role in the takeover approach had broken the joint-venture agreement. | Ownership of BBH, which owns Baltika beer, had led to a row after S&N said Carlsberg's role in the takeover approach had broken the joint-venture agreement. |
| Pension | Pension |
| S&N BACKGROUND 1749: William Younger brewery established in Edinburgh1913: William Younger and William McEwan merge to form Scottish Brewers1960: Scottish Brewers merges with Newcastle Breweries to become Scottish & NewcastleOctober 2007: S&N rejects first takeover approach from Heineken and CarlsbergJanuary 2008: After rejecting three bid approaches, S&N finally agrees to an 800p-a-share offer from Heineken and Carlsberg History of the company | S&N BACKGROUND 1749: William Younger brewery established in Edinburgh1913: William Younger and William McEwan merge to form Scottish Brewers1960: Scottish Brewers merges with Newcastle Breweries to become Scottish & NewcastleOctober 2007: S&N rejects first takeover approach from Heineken and CarlsbergJanuary 2008: After rejecting three bid approaches, S&N finally agrees to an 800p-a-share offer from Heineken and Carlsberg History of the company |
| S&N said guarantees from Heineken would be put in place regarding the company's UK pension scheme. | S&N said guarantees from Heineken would be put in place regarding the company's UK pension scheme. |
| "As part of the agreement, Heineken will also accelerate the deficit payments previously agreed with S&N, with an injection shortly after closing £50m into the plan," the firm said. | "As part of the agreement, Heineken will also accelerate the deficit payments previously agreed with S&N, with an injection shortly after closing £50m into the plan," the firm said. |
| But there were concerns that the deal could lead to job losses in the UK and reduce consumer choice. | |
| Mike Benner, chief executive of the Campaign for Real Ale, said: "The inevitable result of consolidation is brewery closures, brand losses and less choice for Britain's consumers." | |
| He also questioned the impact it would have on traditional real ales in the UK such as John Smith's and smaller regional brands such as Magnet. | |
| Unite, the union, said it had contacted Heineken's chairman, Mr Van Boxmer, and would be pressing for a meeting with him to "secure a range of commitments relating to the job security of our members". | |
| By early afternoon, S&N shares were 2.5% up while Heineken soared 27% but Carlsberg shares had fallen 1.8%. | |
| The deal still requires approval by the European Commission as well as other competition bodies and is tipped to be completed by the second quarter. | The deal still requires approval by the European Commission as well as other competition bodies and is tipped to be completed by the second quarter. |