Watchdog to cast eye over Punch Taverns takeover
The Competition and Markets Authority (CMA) said today it had sent out an “invitation to comment” as it looks into whether the £403 million acquisition may result in a “substantial lessening of competition”.
The Dutch brewing giant sealed a deal in December to snap up Punch Taverns alongside private equity firm Patron Capital, having seen off a rival bid from the pub chain’s co-founder Alan McIntosh. Heineken already owns some 1,100 leased pubs across the UK and would add a further 1,895 after the takeover, while Patron would acquire 1,329 following the carve up.
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Hide AdHowever, industry concerns have been raised over the deal, with the Scottish Licensed Trade Association (SLTA) being particularly vocal in its call for the CMA to conduct a probe.
The trade organisation’s chief executive, Paul Waterson, today welcomed the intervention from the watchdog. He said: “We are delighted that the CMA has chosen to listen to the concerns voiced by so many businesses, organisations and individuals within the pub and brewing industry and open an investigation into Heineken’s takeover bid for Punch Taverns.
“Heineken is a global brewer, with very different priorities to their customers who often rely on hard earned local relationships to make their businesses work.”
A Heineken spokesman said the CMA’s call for comments on the planned takeover was an “important and fully expected stage in the process to finalise our acquisition”, adding: “Heineken will be fully co-operating with the CMA.”
The CMA said it was “considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation” and if so, “whether the creation of that situation may be expected to result, in a substantial lessening of competition”.
It has set a deadline of 2 March for comments on the takeover and is to decide whether to take further action by 24 April.
Heineken said on Wednesday that it hoped the deal would go through by the end of the first half of 2017, but a competition inquiry could throw its plans off course. The group toasted a 9.9 per cent rise in annual earnings, although it revealed a hit to revenues from currency movements.