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Heineken offers to sell pubs to ease competition worries on Punch Taverns takeover

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Heineken has offered to sell pubs in 33 areas across the UK in a bid to get the green light from competition authorities for its takeover of part of Punch Taverns.

Earlier this month the Competition and Markets Authority (CMA) told the Dutch brewer it was concerned the move to acquire roughly 1,900 sites from Punch would mean there was not sufficient competition in the 33 areas identified and that it could lead to price increases or a deterioration in the quality of service on offer.

Heineken has offered to sell pubs in the affected areas in a bid to avoid a more in-depth investigation by the CMA, which could last up to six months.

The competition watchdog now has until August 22 to decide whether it is satisfied with the offer from Heineken, although its initial reaction appeared to be favourable.

“The CMA has decided that there are reasonable grounds for believing that these proposals, or a modified version of them, might be acceptable to remedy the competition concerns it has identified,” it said.

The CMA has the power to extend the deadline to October 17, if it feels it needs to give the proposal extra scrutiny.

As part of the process, the CMA will hold a public consultation, after which it could reject Heineken’s olive branch and engage in a Phase 2 investigation.

Heineken owns the Star Pubs and Bars business, which has roughly 1,100 sites throughout the UK. Its interest in Punch, which has a total of 3,350 sites, first emerged in December.

The global brewing giant agreed a £403m deal alongside investment firm Patron Capital, which is contributing around £100m of the purchase price. The deal would make the Dutch brewer the third largest UK pub group after Greene King and Enterprise Inns.

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

 

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