UK: competition authority gives thumbs up for Heineken’s takeover

Heineken’s £403million takeover of Punch Taverns received the green light by the Competition and Markets Authority (CMA) after the competition watchdog accepted plans to sell off some the almost 1,900 newly-acquired pubs to allay fears it could reduce competition.

Heineken announced last December that it was teaming up with Patron Capital, the private equity firm, to buy Punch for £409m (€305m), or £1.78bn once Punch’s debt is taken into account.

The CMA said various third parties had expressed concerns during its market testing that Heineken's pubs might buy less beer from rival breweries and offer its customers less choice.

Before the merger was referred for a further in-depth investigation, the companies were given the opportunity to offer proposals to address these concerns. Heineken offered to sell pubs in each of the affected areas to preserve competition and ensure customers in these locations would not lose out.

The deal makes Heineken, which already has 1,100 sites through its Star Pubs and Bars business, the third largest UK pub group after Greene King and Enterprise Inns. Heineken will get some 1900 boozers, giving it a total of about 3000. 

“We welcome confirmation from the CMA that only a small number of pubs are required to be sold. It’s a sensible outcome and good news for pub-goers across the UK who will see the benefit of well-invested pubs in their communities.” said a spokesperson for Heineken.

The bid was lower than a rival one from Emerald Investment Partners, a vehicle set up by Punch’s co-founder and former finance director Alan McIntosh, but was still favored by the board. 

The deal is expected to complete by the end of August.