Carlsburg denies venture breach claim
Oct 25 2007 The Journal
DANISH brewer Carlsberg has denied claims from Scottish & Newcastle that it has breached the terms of a joint venture between the two companies.
S&N said that Carlsberg had breached terms of the agreement for the jointly-owned Russian beer business, Baltic Beverages Holding (BBH). The claim follows a statement from Carlsberg and Heineken last week that they were mulling a joint bid for S&N.
Edinburgh-based S&N, which shut its Tyne Brewery in Newcastle in 2005 but still employs 80 staff at its Federation Brewery in Dunston in Gateshead, said it was now considering whether to take full control of BBH and that it may look for a new partner for BBH, which is seen as one of S&N’s most prized assets.
Last week, Carlsberg and Heineken said that they were in talks about forming a consortium to buy S&N, the largest UK-owned brewing company. But S&N quickly snapped back that the interest was unwelcome.
If Carlsberg and Heineken do make a bid, their plan is to split S&N with Heineken taking control of S&N’s main business in the UK and some other European markets, while Carlsberg would take over S&N’s operations in France and Greece, and gain full control of BBH. On Tuesday, the brewer launched a counter offensive over the BBH business and in a statement, S&N said: "The board believes that the actions of Carlsberg constitute initiation of the voluntary termination provisions of the agreement under which Carlsberg is obliged to offer its shares in BBH to S&N.
"The board is still evaluating whether the best interests of S&N shareholders will ultimately be served by outright ownership of BBH or through the introduction of a new partner(s) into BBH."
The firm added that it had been "content" with the joint ownership of BBH, and had wanted it to continue "for the long-term".
"However, given the breaches of the agreement by Carlsberg and their serious implications for BBH, the board of S&N has felt compelled to respond swiftly to protect its position," S&N said. But in a short statement, Carlsberg replied that it believed "the claims made have no merit".
