UK: Heinekens deal to acquire pub chain Punch Taverns under antitrust probe
Heineken's deal to acquire pub chain Punch Taverns could be under threat as the Competition and Markets Authority (CMA) probes the agreement, Sky News reported on February 16.
The CMA has issued an 'invitation to comment' to interested parties as it looks at whether the deal, which will see Heineken take over almost 2,000 pubs in the UK, could result in a "substantial lessening of competition".
Concerns have already been raised about the deal by parts of the licensed industry, and this move by the CMA will allow them to formally submit their reasons for opposing the deal.
Heineken clinched a deal to take over the Punch Taverns company in partnership with private equity firm Patron Capital.
The two firms successfully fought off a counterbid by Punch Taverns' co-founder, Alan McIntosh, by offering to pay 180p-per-share for the company.
It will see Heineken acquire 1,895 UK pubs on top of the 1,100 it already controls, with Patron securing the remaining 1,329.
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 allowed until 2 March for comments on the takeover to be submitted, and it will then decide whether to take further action on the issue by 24 April.
A Heineken spokesman said the CMA's call for comments on the planned takeover was an "important and fully expected stage in the process to finalise our acquisition", and added: "Heineken will be fully co-operating with the CMA."
Paul Waterson, chief execuive of the Scottish Licensed Trade Association, has been very vocal in his opposition of the deal and welcomed the news that the CMA will be looking into the takeover.
"We are delighted that the CMA has chosen to listen to the concerns voiced by so many businesses, organisations and individuals within the pub and brewing industry and open an investigation into Heineken's takeover bid for Punch Taverns," he said.
"Heineken is a global brewer, with very different priorities to their customers who often rely on hard earned local relationships to make their businesses work.
"We know from both Heineken's words and actions that they will give preference to their own products across their estate, and this is simply not fair for brewers, publicans or consumers."
The news comes less than 24 hours after Heineken stated in their company results that they expected the deal to complete by mid-2017.
The brewer revealed that its profits fell by 15% last year, and that it had taken a £976m hit from global currency volatility including fluctuations in the British pound following the Brexit vote.
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