Greene King agrees £187m Belhaven deal
Greene King has continued its expansion drive with a £187m deal to take over Scottish brewer Belhaven.
The Belhaven board is recommending Greene King's cash offer of 625 pence a share, a 27.8 per cent premium over the average share price over the past six months.
Belhaven, Scotland's biggest independent brewer, operates around 230 pubs across Scotland, and brews beers including flagship ale Belhaven Best.
A deal with Greene King has been rumoured for some months although the Suffolk brewer has not commented before today's announcement.
Last month, Greene King bought Essex brewer TD Ridley in a £45.6m deal, ending more than 160 years of family ownership. Since 1996, Greene King has acquired over 1,600 pubs in eight major acquisitions. Greene King chief executive Rooney Anand said the latest deal is a "unique opportunity to achieve instant scale" in the Scottish market, where it has little presence currently.
The merger is expected to generate cost savings of £3 million in the first full year of ownership, rising to around £5 million over the following two years. Purchasing savings, cross-selling to the free trade, national pub groups, take-home and export markets, and management efficiencies will generate the savings.
Mr Anand said: "This is a full and fair offer for Belhaven, a business that we have long admired for the strength of its pubs, brands and people.
He added: "The offer is consistent with our strategy to deliver shareholder value by augmenting our organic growth with selective acquisitions that improve the overall quality of the group.
"We are both integrated operators with proud histories and our businesses complement each other well. Belhaven will retain everything at the heart of its success, including its name, its brands, and its brewery, but will also benefit from being part of a larger group opening up new markets for its products."
Stuart Ross, chief executive of Belhaven, said: "Belhaven has achieved 15 years of unbroken growth, a record of which we are very proud. Today's cash offer reflects the quality of our business and our Board unanimously recommends that it is in the best interests of our shareholders.
"We believe that Greene King is the ideal partner for Belhaven. It is a hand in glove fit. The commercial models of the two companies are almost identical and we share the same ideals about the value of people, brands and heritage.
"In Scotland, we can look forward positively to the future and we are confident that our assets, including our people, will make a meaningful contribution to the future growth and prosperity of the enlarged group."
Belhaven's directors recently raised concerns about the short-term impact on trading of the Scottish smoking ban, which comes into force next March. Greene King said its offer gives certainty to shareholders "at a time when the Belhaven Group faces commercial and financial risks arising from the change in legislation."
