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Greene King ties up £70m Capital deal
UK brewer Greene King has announced a £70 million deal to buy Capital Pubs.
The move comes as the East Anglian company looks to increase its presence in London ahead of the 2012 Olympics.
The brewer will acquire Capital’s 34 pubs in London, taking its portfolio of pubs in the city to 250.
The deal comes after Capital’s management rebuffed bids from rival brewers Fuller, Smith & Turner last month.
It also represents Greene King’s third acquisition this year, after the purchase of RealPubs and Cloverleaf for a combined £108m.
Greene King chief executive Rooney Anand said: “The proposed acquisition represents another firm step as we continue to expand our presence in London.
“Capital Pubs would bring a further 34 premium pub assets and take our Greater London estate to approximately 250 at a time when London is outperforming the national pub market.
“This offer represents a fair price for a high quality, largely freehold pub estate. Capital Pubs is a premium London pub company that fully meets our criteria as we continue to progress our retail expansion strategy.
“Capital Pubs’ estate fits well within the Greene King portfolio and we intend to combine it with our recently acquired Realpubs business, thereby generating attractive cost and revenue synergies.â€
Greene King, which is best known for its Old Speckled Hen and Greene King IPA beers, expects the deal to add its earnings in the first full year of ownership and to generate savings of £2m though reduced overheads and purchasing benefits.
Clive Watson, co-founder and chief executive of Capital Pubs, said: “Greene King is an excellent cultural fit and will be a good home for both the business and our staff.”
This deal, when it completes is, a superb move by both Greene King and Capital Pubs. It clearly shows a huge positive move of some value. The brewing industry if well marketed at the pub level has riches in the supermarket chains too. This move shows that the well thought and valued £70 million purchase by the intelligent management of Greene King values Capital Pubs in the right region on the strength of its excellent freehold property portfolio. Capital Pubs has shown that it’s a great Greene King type company, (Greene King with sales exceeding £1 billion a year), and that it is competent enough to own them (and I am sure the excellent brands like Mitchells and Butler or JD Wetherspoons would have featured too). It is not now dealing with some simpleton cheap outfit.The genuinely clever and board senior staff of both these superb brands can run charity marathons knowing that their charity work is genuine, and unlike some, and in line with competent business management and non prejudicial care. Well done indeed.
Best Wishes,
DINESH R MAKWANA (DREAMWORDS AND INORBITS)