S&N’s board has finally agreed to recommend a cash bid of £7.8bn from its two European rivals, after several months of brinkmanship and squabbling. Assuming the deal goes through – and most people seem to think that at 800p-per-share there’s not much chance of them being gazumped – it will put an end to 260 years of independence for Britain’s last big brewer.
It’s been a long-running saga – it was back in October that Carlsberg and Heineken first said they were interested in bidding for S&N, although their putative 720p-a-share bid got very short shrift. When an increased offer at 750p was rejected in November, things got a bit icy – S&N even threatened legal action for breach of contract. A 780p bid was then mooted, but again no joy. Now S&N has finally agreed to an 800p offer, just hours before the expiry of the Takeover Panel’s ‘put up or shut up’ deadline.
So the battle appears to be all over bar the shouting – apparently the major shareholders and the pension fund trustees are on side, the financing is all lined up, and all the due diligence is done. So barring a last-minute hitch at the EGM or a spanner in the works from the EU, S&N could be a footnote in history by the summer.
Most of the bickering has been over BBH, S&N’s Russian joint venture with Carlsberg. It’s been growing so rapidly – 33% in the first three quarters of last year – that both sides were desperate to get it all to themselves. Not surprisingly, S&N argued that Carlsberg were trying to do so on the cheap – and given that it’s managed to bump up the price by 80p a share, it’s clearly done a pretty good job.
Carlsberg is stumping up three-quarters of the increase, but CEO Jorgen Buhl Rasmussen obviously thinks it’s worth it to get ‘full control of our destiny in Russia’. He sounded happy as Larry this morning. ‘In a single step we have created the world's fastest growing global brewer,’ he proclaimed proudly. Heineken sounds equally happily – it’s now the undisputed market leader in Europe, and will soon get its hands on UK brands like John Smith’s and Strongbow (thus ensuring that even more of our beer tastes exactly the same).
And a good thing too – after the bruising takeover battle they’ve just been through, they’ll all be in need of a stiff drink.