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Done Deal! -- Whitbread to Quit Brewing BusinessMay 26, 1999 -- In a move certain to rock British pub culture if it is allowed to proceed, Whitbread PLC, owners of the Whitbread Beer Company, have reached an agreement to buy the pub holdings of Allied Domencq, the BBC reported yesterday. The deal will make Whitbread the United Kingdom's largest leisure group, says the report, providing them with more than 10,000 outlets, including some 7,000 pubs. The purchase, worth BP2.4 billion (US$3.8 billion), has been in the works for several weeks and was first reported in World of Beer on May 4 (see http://worldofbeer.com/brightbeer/allied0.html). As British law prohibits breweries from owning more than 5,000 pubs, the deal will necessitate Whitbread spinning off its brewing company. While Whitbread has stated that they will place the brewery interests into another company in order to comply with the law, they have also admitted to receiving inquiries as to the possible sale of the brewing company. Rumoured potential buyers include South African Breweries (which earlier this year began trading on the London Stock Market) and Heineken.The stock market reacted well to the announced sale, with Allied's stock rising 25 pence to 576.5 pence, up 4.5%, and Whitbread up 23 pence, or 2.3%, to 1040 pence. Consumers, on the other hand, were not nearly so joyous. The Campaign for Real Ale (CAMRA) condemned the deal and called for an immediate inquiry by the Office of Fair Trading. Said Mike Benner, the Head of Campaigns and Communications for CAMRA, "Consumers will be the losers if this deal goes through," (There is perhaps hope for an OFT investigation, or at least precedent. In June of 1997, the OFT rejected the proposed merger of Bass and Carlsberg Tetley, saying that the deal would be contrary to the public interest.) For more on the sale and CAMRA's reaction, please visit the CAMRA home page at http://www.camra.org.uk.Search The Real Beer Library For More Articles Related To: Allied Domencq, Whitbread
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