Carlsberg UK and Marston's brewing arm merge in £780m venture

Marco Green
May 23, 2020

British pub operator Marston's MARS.L said on Friday it will combine its brewing business with Carlsberg UK into a joint venture for a 40% stake and a cash payment of up to 273 million pounds.

Carlsberg Marston's Brewing Company, the joint venture, would deliver annual cost savings of around 24 million pounds, expected by the end of the third year following the completion of the deal, Marston's said.

"The joint venture's brand portfolio will allow us to offer a significantly stronger beer portfolio to our United Kingdom customers", he said.

Carlsberg's group chief executive Cees 't Hart said the deal would bring customers "wider choice, greater capacity, product innovation and marketing and distribution efficiency benefits".

Tomasz Blawat, managing director of Carlsberg UK, said the deal enables the companies to offer "a bigger beer portfolio of complementary worldwide, national and regional brands".

The new company will get both Marston's and Carlsberg UK's breweries and distribution centres in the UK.

Despite the growth of craft beer in the United Kingdom over the past decade, small breweries have struggled in the face of a fightback from global brewing giants, some of which have sought to cash in on changing tastes by buying out smaller operators.

The brewer spent £20 million on an ad campaign previous year as it changed the recipe for its flagship beer, which admitted its current lager is "probably not the best beer in the world," The beer has now been replaced with Carlsberg Danish Pilsner.

The chief executive of Marston's, Ralph Findlay, said: "This new partnership acknowledges Marston's strategy, position and consistent outperformance against the United Kingdom beer market, realising value for shareholders today, whilst retaining an interest in the future upside of the combined entity". Richard Westwood, current managing director of Marston's Beer Company will act as Chief operating officer, charged with integrating and streamlining the joint venture. After a successful relaunch of Carlsberg Danish Pilsner in the United Kingdom a year ago, we are now building a new beer company by combining two organisations with shared values and strong history and heritage in brewing. The stock is still trading more than 40pc below its mid-February price. "Consequently, volumes will decline further in the second quarter".

Other reports by Click Lancashire

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