Shareholders support S&N’s £7.8bn takeover
Apr 1 2008 by Iain Laing, The Journal
SHAREHOLDERS in the UK’s biggest brewer Scottish & Newcastle yesterday called time on more than 250 years of brewing history by backing a proposed £7.8bn takeover.
S&N said investors voted unanimously in favour of the sale of the company – best known for Newcastle Brown Ale, John Smith’s bitter, Fosters lager and Strongbow cider – to European giants Heineken and Carlsberg.
The decision, taken at a meeting in Edinburgh, still needs court approval before a likely completion on April 28.
It followed S&N’s board finally agreeing to the offer for the company in January following a three-month pursuit by the European brewers.
The duo will break up the business, with the UK operation passing to Dutch giant Heineken. It will also gain S&N’s businesses in Portugal, Ireland, Finland and Belgium.
Danish brewer Carlsberg will take on S&N’s stake in BBH, their fast-growing 50/50 joint venture in Russia and the Baltics, and the firm’s operations in France, Greece, China and Vietnam.
The company shut its massive Tyne Brewery in Newcastle three years ago but it still employs around 200 staff in the North East, largely at its Dunston brewery in Gateshead. It also has breweries in Manchester, Reading, and Tadcaster, North Yorkshire as well as owning the Bulmers cider mill in Hereford.
In February, the company announced plans to close its Reading brewery by 2010 under cost-cutting plans, leaving S&N with around 3,000 UK staff.
Recent annual results for the firm – its last as an independent group – showed flat profits of £444m during 2007.
An 8% fall in UK profits after the wet summer and the impact of the smoking ban was offset by a stronger performance from higher growth markets in Russia and India.
A special resolution backing the merger was passed by 475,568,241 votes to 1,650,957, with 2,509,066 abstentions – more than 99% in favour, S&N said.
Group chairman Sir Brian Stewart told shareholders it was a “momentous and historic“ day for the business.
He said: “While there is sadness at the passing of two-and-a-half centuries of brewing history, the prevalent emotion today is pride.
“It is precisely because we have achieved such strong positions worldwide that the company has been so attractive to others in a consolidating world market in brewing.
“Though today may be an end, it is also a beginning; a new opportunity for our people across the globe – including many still based here in Scotland – to grow within a larger worldwide group.”
