Finance / Competition watchdog probing Heineken’s £403m takeover of Punch Taverns
Competition watchdog probing Heineken’s £403m takeover of Punch Taverns
16 February 2017
Heineken's £403 million takeover of pub chain Punch Taverns is being put under the microscope by Britain's competition watchdog amid concerns over the deal.
The Competition and Markets Authority (CMA) has sent out an "invitation to comment" as it said it was looking into whether the takeover may result in a "substantial lessening of competition".
Heineken sealed a deal in December to snap up Punch Taverns with private equity firm Patron Capital, having fought off a rival bid from the pub chain's co-founder Alan McIntosh with a 180p-per-share offer.
The Dutch beer giant already owns 1,100 leased pubs across the UK and would add another 1,895 after the takeover, while Patron would acquire 1,329.
Concerns have already been raised over the deal in the industry, with the Scottish Licensed Trade Association calling for the CMA to launch a probe.
The CMA said it was “considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation” and if so, “whether the creation of that situation may be expected to result, in a substantial lessening of competition”.
It has set a deadline of March 2 for comments on the Punch takeover and is to decide whether to take further action by April 24.
Its announcement comes a day after Heineken boss Jean-Francois Van Boxmeer praised British pubs as an “institution” as he unveiled annual profits.
He told CNBC: “Although the pub sector in the UK has been contracting over the last few years, when you do things right it is a very good business to be in.
“We call it the great British pub. It is an institution in the country and it’s also a great business.
“We have expertise in developing that business, hence the proposed acquisition of part of the Punch estate, which would strategically add to our strength in the UK.”
Heineken said on Wednesday that it hoped the deal would go through by the end of the first half of 2017, but a competition inquiry could throw its plans off course.
The group toasted a 9.9% rise in annual earnings, although it revealed a 1.15 billion euro hit (£976 million) to revenues from the Brexit-hit pound, as well as currency depreciation in other markets
It also cautioned over “volatile” economic conditions over 2017 and said it was expecting a further currency impact of up to 75 million euros (£64 million).
Full year results showed it notched up underlying operating profits of 3.54 billion euros (£3 billion) last year, up from 3.38 billion euros (£2.9 billion), and sold 3% more beer by volume.