The Wall Street Journal-20080126-Carlsberg- Heineken Ready To Divvy Up Brewer S-N
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Carlsberg, Heineken Ready To Divvy Up Brewer S&N
LONDON -- Brewers Carlsberg AS and Heineken NV showed divergent strategies Friday in their plans to carve up Scottish & Newcastle PLC, after their United Kingdom rival accepted their GBP 7.8 billion ($15.42 billion) joint offer, ending a takeover battle that had dragged on since March.
Denmark-based Carlsberg and Netherlands-based Heineken plan to break up the Edinburgh-based brewer of Kronenbourg 1664 and Newcastle Brown Ale.
Carlsberg will get the 50% it doesn't already own in its highly profitable Russian joint venture with S&N, Baltic Beverage Holdings, as well as S&N's operations in France, Greece and China, transforming the company into a fast-growing brewer focused on emerging markets. BBH operates 19 breweries in Russia, Ukraine, the Baltic countries and Kazakhstan.
Heineken will take control of operations in the U.K., U.S., other European markets and India, where S&N operates in partnership with Indian businessman Vijay Mallya. Heineken said the deal gives it complementary brands with international potential, such as Newcastle Brown Ale and Strongbow cider, as well as new distribution and access to the U.K. cider market.
Heineken Chief Executive Jean-Francois van Boxmeer called the transaction a great deal for all three parties, adding that the acquisition marked a significant strategic step for Heineken, giving it the leadership position in Europe.
"It's been a long time coming, but it has all been worth it," Carlsberg CEO Jorgen Buhl Rasmussen said.
Carlsberg will pay 54.5% of the final offer, up from the 54% it was set to cover in October. With the main sticking point being the valuation of BBH, the Danish brewer has had to fund more of the higher offer.
S&N agreed to discuss a joint takeover approach from Carlsberg and Heineken this month, having turned down three previous offers from them. The deal is expected to be completed in about three months. Credit Suisse Group advised Heineken; Lehman Brothers Holdings Inc. advised Carlsberg; and Deutsche Bank AG and UBS AG advised S&N.
