19th Aug 2020 08:16
(Alliance News) - The UK's competition regulator on Wednesday said it will probe the joint venture between UK brewer and pub operator Marston's PLC and Carlsberg UK Holdings Ltd.
Shares in Marston's were down 1.7% at at 50.00 pence each in London.
The monopoly watchdog said it is considering whether the proposed brewing and distribution joint venture between Marston's and Danish brewer Carlsberg will result in the creation of a relevant merger situation and lead to a substantial lessening of competition in the UK.
Marston's and Carlsberg in May had announced the formation of a new joint venture for brewing and distribution in the UK, resulting in a large cash payment to Marston's.
Under the agreement, FTSE 250-listed Marston's would receive a 40% stake in the Carlsberg Marston's Brewing Co joint venture, plus a balancing cash payment of up to GBP273 million.
The joint venture had valued Marston's brewing business at GBP580 million and Carlsberg's UK brewing business at GBP200 million.
Marston's had said it would use the proceeds from the joint venture to cut debts. In March, the company had commenced a debt reduction programme with the goal of reducing debt by GBP200 million by 2023. As at the end of 2019, Marston's net debt was GBP1.39 billion.
In announcing interim results in June, Chief Executive Officer Ralph Findlay said: "Looking ahead, our transformational deal with Carlsberg positions the company well for the future. Post completion, Marston's will be a focussed pub and accommodation business with a significantly strengthened balance sheet, well placed to rebuild trading momentum and leverage the market opportunities available to us over the medium to longer term."
The Competition & Markets Authority is inviting comments on the transaction until September 2.
By Tapan Panchal; [email protected]
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