Caledonian Brewery to go Dutch in 11th hour S&N deal

In a surprise move, the Caledonian brewery has been sold to S&N just weeks ahead of the drinks firm's 7.8 billion acquisition by a the Dutch and Danish consortium, The Scotsman has learned.

S&N, which already had a 30 per cent stake in the firm, has bought up the remaining 70 per cent shareholding from Caledonian directors Sandy Orr, Donald MacDonald and Denis Critchley-Salmonson for an undisclosed sum.

The deal to sell the company, which makes brands including Deuchars IPA and Caledonian 80, will spell the end of the historic Scottish-owned brewing industry in the capital.

It is understood to have been part of the agreement between Edinburgh-headquartered S&N and the Dutch drinks giant, which is due to take control of the Edinburgh-based S&N at the end of this month.

Caledonian managing director Stephen Crawley, who is to stay on following the takeover by Heineken, yesterday confirmed the deal and said it was "business as usual" for the historic brewery.

He told The Scotsman: "The business has been running on the same basis as it is going to run in the future and it is very much business as usual – essentially is it just a shareholder change."

He said no redundancies were planned but added that "everything was up for debate" in the future. Heineken's takeover of S&N is expected to put about 250 jobs at risk in the brewer's corporate functions, including between 100 and 150 jobs at its Edinburgh HQ.

The Slateford Road brewery's 75 staff were told about the acquisition in an e-mail yesterday afternoon.

One worker said: "Everyone's worried about what will happen. We're concerned for our jobs. This is a big change for the Caley Brewery."

Crawley added: "The mix of public and private ownership has gone and the Caley is a survivor.

"The companies are a good fit."

He maintained that the iconic Deuchars brand was set to survive the takeover.

Crawley said: "I would bet my house that we still have Deuchars in five years' time. When I took over, I wanted Deuchars to be to Edinburgh what Guinness is to Dublin and although we have taken steps in that direction, there is still work to do."

The Caledonian operations, including the sales and marketing functions, will continue to trade as a stand-alone business. S&N said the brewing and packaging operations at Caledonian would have closer links to its own brewing network but added that its commercial operation, brands and marketing activities would be "unaffected" by the acquisition.

S&N added that further investment was planned for the brewery, which has already benefited from 4m of improvements paid for by the bigger company over the past four years.

Jeremy Blood, managing director for S&N UK, added: "Over the last four years, we have built close strategic links with the Caledonian team and had already begun to unlock new opportunities for their beers with the S&N network. This final part of the acquisition will simplify matters and enable Caledonian to fully realise its potential as a significant producer of high quality and specialist traditional ales."

The Caledonian Brewery, which dates back to 1869, struck a deal with S&N in 2004 through which the larger company bought a stake in Caledonian. It has since invested millions of pounds in upgrading the brewery site.

When S&N closed its Fountainbridge brewery, it emphasised that it would retain its Scottish presence through its link with Caledonian.

The foreign takeover of S&N was confirmed last week after shareholders voted overwhelmingly in favour of the deal at a meeting in Edinburgh.

S&N will delist as a public company on 28 April.

Heineken last night refused to comment on the deal.