CMA probe delays completion of Marston’s and Carlsberg joint venture

28-Jul-2020 - Last updated on 28-Jul-2020 at 09:47 GMT

Joining forces: the joint venture was first announced in May this year

The joint venture between Marston’s Brewing Business and Carlsberg’s UK division to create a giant beer company will be investigated by the Competition and Markets Authority (CMA), rather than the European Commission.

A statement from Marston’s said it had been advised that for procedural reasons the UK CMA is now likely to be the relevant watchdog, rather than the European Commission. Due to this, completion is now expected in the fourth quarter of 2020.

The brewer and pub operator's statement also reiterated that Marston’s does not expect the transaction to raise any competition concerns and that it is satisfied the group has sufficient liquidity in place to meet its requirements ahead of completion.

Transaction terms

The proposed transaction to form a giant beer company was first announced in May this year. The venture, which will create the Carlsberg Marston’s Brewing Company, values Marston’s Brewing Business at up to £580m and Carlsberg UK Brewing Business at £200m.

Carlsberg Marston’s Brewing Company will boast assets that include Carlsberg UK’s Northampton brewery, London Fields Brewery and national distribution centre, as well as Marston’s six national and regional breweries – Marston’s, Banks’s, Wychwood, Jennings, Ringwood and Eagle – plus 11 distribution depots.

The transaction terms also mean the new brewing company will have access to Marston’s pub estate for its beer portfolio, which is enshrined through a long-term supply and distribution agreement.

Market access

At the time of the announcement, Society of Independent Brewers (SIBA) chief executive James Calder said the merger was the latest in a series of consolidating measures within the UK beer market.

He said: “It has the potential to take the Marston’s brand global and brings Carlsberg into the distribution and porterage business only after a few short years of leaving it.

“This merger, yet again, has the potential to impact negatively on small independent brewers by reducing the access to market they receive.”

Previously, the Campaign for Real Ale (CAMRA) called on the CMA to investigate the creation of the new brewing company, rather than the European Commission.