Doubts over the viability of future expansion lay behind the sale of George Gales, announced yesterday, to London brewer Fuller's for £91.8m.
Despite 15 consecutive years of growth, brewer Gales' management concluded that the rising costs of doing business and red tape, together with the buying clout of its larger rivals, meant a sale was inevitable.
The opportunities for future growth in shareholder value as an independent operator "[were] now lower than was previously the case", said Gales' managing director Nigel Atkinson (pictured).
"As a board we discuss the trading environment regularly and we looked at a number of related issues earlier this year," he added.
"Despite our growth track record all the pointers were looking at a tough future. Then three months ago came the totally unconnected approach from Fuller's and the offer was just too good to pass up."
Fuller's chief executive Michael Turner said the fit between the two businesses was "incredible".
"It was a full price to pay but as a deal it makes a great deal of sense. The integration costs will be low, plus there will be significant areas for synergy benefits, notably in our purchasing power," he added, noting that a number of lager supply contracts for both Gales and Fuller's are up for renewal next year.
While Fuller's refused to rule in or out a closure of Gales' Horndean brewery, it said it was planning a 'complete review' of all operations before deciding whether to transfer production to the Griffin Brewery in Chiswick. With recent one-off pub purchases in the south west, the 111 Gales' pubs - 97 of which are freehold - raises Fuller's estate to 360. The future of Gales' 800 pub estate staff was pretty secure, although job losses in areas of overlap such as back-office functions were possible, Mr Turner said.
With Gales' board backing the takeover, Fuller's already has support equivalent to 80.6 per cent of the voting rights, making shareholder approval a formality.