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Brewer consolidation to break up Scottish and Newcastle

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Brewer consolidation to break up Scottish and Newcastle

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Britain’s biggest brewer, Scottish and Newcastle, is being bought by Carlsberg and Heineken, in a cash deal valuing it at 10.5 billion euros. Carlsberg will take over S&N’s interest in Baltic Beverage Holdings plus its business in Greece, China, Vietnam and France. Heineken gets the British side of the business and operations in Belgium, Portugal and Ireland.

InBev of Belgium remains the biggest producer followed by British based SAB Miller. Heineken will be the third biggest producer followed by Anheuser Busch of the US and Carlsberg. The deal, which has taken three months to put together, will boost the Danish brewer’s position in Russia and the Dutch group’s presence in western Europe.

Analysts said it would be positive for both the bidders who have announced bigger projected cost savings than expected. Brewers are looking to cut costs as prices have risen for raw materials including malting barley and aluminium for cans. This also puts pressure on other brewers such as Molson Coors and Foster’s to improve their performance or consolidate.