Last orders for brewer Scottish & Newcastle as it is sold to rivals

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The Independent Online

Scottish & Newcastle has agreed to be bought for £7.8bn by its continental European rivals Heineken and Carlsberg, ending more than 250 years of history for the company as an independent national brewer.

Following three months of wrangling, the maker of Foster's, Kronenbourg 1664 and Newcastle Brown Ale finally recommended the fourth offer for the business, worth 800p a share, which will lead to a carve-up of the company. The Edinburgh-based brewer's UK operations will pass to the Dutch giant Heineken, while Carlsberg will assume full control of BBH, the fast-growing joint venture in Russia and the Baltics, in which it had a 50 per cent stake.

Analysts said the deal, which is 11 per cent higher than the first offer for S&N made by the consortium – and 31 per cent above the level at which the shares were trading before speculation started, was a good one for shareholders, though the 15p final dividend will not now be paid. A counter-bid remains a possibility, but is thought unlikely.

Heineken has also reached agreement with the trustees of the Scottish & Newcastle Pension Plan to secure the future of the pension scheme, and is to inject £50m into the plan to accelerate deficit payments.

The chairman of the trustee board, Dr Neville Bain, said he was encouraged by the "positive expressions of commitment" made by Heineken. However, there are concerns about job losses among the 3,300 UK staff. Iain MacLean, national officer of the Unite union, said the deal "will result in a period of uncertainty for the workforce, and we are primarily concerned about the implications for UK jobs".

The agreement also raised concerns from the Campaign for Real Ale (Camra) over consumer choice and the future of S&N's real ales, such as Theakstons. Camra's chief executive, Mike Benner, said: "The inevitable result of consolidation is brewery closures, brand losses and less choice for consumers."

During the takeover campaign S&N had accused the consortium of trying to pick up the firm "on the cheap". But the S&N chairman, Sir Brian Stewart, who has led the bid defence, yesterday said that the board had decided to recommend the offer because it "delivers a fair value for S&N, reflecting its growth prospects".

The deal will also net £218m for the Blackpool Tower owner and leisure tycoon Trevor Hemmings, who sold the holiday camp chain Pontins to S&N in 1989 in return for a stake in the brewer. Although he subsequently bought Pontins back, Mr Hemmings still holds 2.8 per cent of S&N.

Along with BBH, Carlsberg will take on the company's operations in France, Greece, China and Vietnam, while Heineken will also cement its position as Europe's leading brewer, bolstering its position in Portugal, Ireland, Finland and Belgium.

Currently the world's seventh largest brewer by sales, S&N has breweries in Manchester, Reading, Dunston and Tadcaster.

It traces its roots back to 1749, when the William Younger brewery was established in Leith, Edinburgh. The Newcastle arm of the company dates back to the foundation of the John Barras brewery in 1770.