CMA approves Carlsberg and Marston's merger

By James McAllister

- Last updated on GMT

CMA approves Carlsberg and Marston's merger

Related tags Marston's pub company Carlsberg Mergers and acquisitions Competition and Markets Authority

The Competition and Markets Authority (CMA) has the cleared the proposed £780m merger of Marston’s brewing business with Carlsberg UK.

A 'phase 1' investigation was launched in August​ following concerns by the Campaign for Real Ale (CAMRA) that the joint venture would prompt 'market foreclosure for small brewers, which will reduce choice for beer drinkers and pub-goers'.

However, the CMA said it had cleared the combination of the businesses, after finding that concerns raised over the deal did not warrant blocking it.

The deal, which was originally agreed back in May​, is now set to be completed at the end of this month.

When first announced, the joint venture valued Marston’s Brewing Business at £580m; and Carlsberg UK at £200m.

Despite Marston’s superior valuation, the pub chain will hold only a 40% stake in the merged firm, which will be named Carlsberg Marston’s Brewing Company (CMBC).

However, it will also receive a £273m cash payment upon completion of the deal. Carlsberg will hold a 60% stake.

The deal is expected to create significant value through synergies and productivity improvements, with CMBC predicting reported annual joint venture cost synergies of approximately £24m by the end of the third year following completion.

Both Marston's and Carlsberg UK said they welcomed the CMA's decision in separate statements this morning (9 October).

Tomasz Blawat, managing director of Carlsberg UK, said: "We welcome the decision by the Competition and Markets Authority and wish to put on record our thanks to them for the thoroughness of their work in recent months.

“The joint venture between Carlsberg UK and Marston’s PLC to form the Carlsberg Marston’s Brewing Company, unites two historic brewers with shared values, history and heritage, to create a company with a sustainable future in UK brewing.

“Today’s decision is a significant milestone in the formation of the new company, which we believe will create significant value for employees, customers and beer-drinkers in the UK, and we look forward to moving to the next stage on this journey.”

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