Carlsberg and Heineken on Friday finally agreed upon a cash bid of £7.8 billion ($15.3 billion) to buy and break up Scottish and Newcastle (S&N) to boost the Danish brewer’s position in Russia and the Dutch group’s presence in western Europe.UK-based liquor major S&N holds a 37.5 per cent stake in India’s United Brewries Group. After a three-month takeover saga, Carlsberg and Heineken have agreed upon a deal at 800 pence a S&N share which was recommended by the board of Britain’s biggest brewer and the world’s sixth-largest beermaker.The deal comes as brewers look to cut costs as input prices for malting barley and aluminum cans have risen and to create a bigger platform for their top brands. S&N and Carlsberg have agreed to release projected information for their 50-50 Russia-based joint venture Baltic Beverages Holding for 2008 to 2010, which had been a sticking point in the takeover fight.“In a single step we have created the world’s fastest-growing global brewer,” Carlsberg chief executive Jorgen Buhl Rasmussen said. The bidders announced bigger projected cost savings than expected, with Heineken targeting annual synergy benefits of £120 million by the fourth full year after the deal closes while Carlsberg looks for annual savings of £126 million by year three.Under the break-up plan, Carlsberg will acquire S&N’s 50 per cent stake in BBH to get full control of the brewer of Baltika in the former Soviet Union, and also S&N’s interests in France, Greece, China and Vietnam. Heineken will take over S&N’s British business, which includes Strongbow cider and John Smith’s beer, along with its operations in other European markets, plus its US and India businesses.The bidders say the approval of the European Commission and other competition authorities will be required and it is expected the deal will be completed in the second quarter. No final S&N dividend for 2007 will be paid.
