Marston’s and Carlsberg to unite brewing operations in £780m joint venture
UK pub chain Marston’s share price skyrocketed today as it announced a plan to merge its brewing business with Carlsberg’s UK division in a £780m deal.
The joint venture will value Marton’s Brewing Business at up to £580m and Carlsberg’s at £200m.
But despite Marston’s superior valuation, the pub chain will only own 40 per cent of the merged firm – Carlsberg Marston’s Brewing Company. It will receive £273m in cash upon completion of the deal.
Marston’s, whose beer brands include Courage, Young’s, Hobgoblin and Wainwright, saw its share price rocket 87.5 per cent to 61.05p on news of the Carlsberg joint venture. Carlsberg’s inched up 1.6 per cent.
Ralph Findlay, chief executive of Marston’s, said: “This new partnership acknowledges Marston’s strategy, position and consistent outperformance against the UK beer market, realising value for shareholders today, whilst retaining an interest in the future upside of the combined entity.”
Tomasz Blawat, managing director of Carlsberg UK, added: “We are excited to move into the next phase of our growth strategy. After a successful relaunch of Carlsberg Danish Pilsner in the UK last year, we are now building a new beer company by combining two organisations with shared values and strong history and heritage in brewing.
“Our intent for the Carlsberg Marston’s Brewing Company is for it to become a platform for growth for all of our customers and suppliers. We believe the new business will deliver even more value for employees, customers and consumers, thereby creating greater future growth potential.”
Carlsberg will hold a 60 per cent stake in the Marston’s joint venture and said it expects to see annual cost synergies of £24m from the deal.
Both parties said they expect the deal to close in the third quarter of 2020, subject to shareholder and regulatory approval.
JP Morgan Cazenove acted as a financial adviser and joint corporate broker to Marston’s, with Numis also serving as a joint corporate broker.