9th Oct 2020 10:19
(Alliance News) - The UK Competition & Markets Authority said it has cleared the proposed joint venture between UK brewer and pub operator Marston's PLC and Carlsberg UK Holdings Ltd.
In May, Marston's and Carlsberg announced the formation of a new joint venture for brewing and distribution in the UK. 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 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.
The monopoly watchdog's decision on Friday follows a probe announced in August into several possible ways in which the deal could harm competition in the supply of beer and cider in the UK.
The UK CMA said it considered whether access to pubs by smaller independent brewers could be adversely affected as a result of the deal but found however that Marston's pubs form only a small part of the potential UK customer base for brewers, and that independent brewers would continue to have sufficient access to pubs after the merger, allowing them to compete effectively.
It also considered whether combining the wholesaling services that both companies provide, through which they distribute their own and other producers' drinks to pubs and restaurants, could raise competition concerns. While the establishment of the joint venture means that the two businesses are likely to distribute each other's products more frequently, potentially leaving less room to take on other brands, the CMA however found that brewers will continue to have sufficient alternative wholesalers to choose from after the merger.
Commenting on the approval, Marston's said: "We are pleased to report that the Competition & Markets Authority have cleared the proposed joint venture, and the antitrust condition to completion has now been satisfied."
The acquisition is expected to complete at the end of October.
Shares in Marston's were trading 24% higher at 51.62 pence each on Friday morning in London.
By Ife Taiwo; [email protected]
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