Heineken and Carlsberg to take over UK's biggest brewer

The UK’s biggest brewer, Scottish & Newcastle, will fall into foreign hands tomorrow after its £7.8bn (€9.9bn) takeover by rivals Heineken and Carlsberg.

Shares in the Foster’s, John Smith’s and Kronenbourg 1664 maker will be delisted after shareholders called time on more than 250 years of history by approving the deal in March.

The Edinburgh-based group’s four senior managers, led by chief executive John Dunsmore, will stay on for three months as consultants to help shepherd in the new era.

S&N’s board agreed to the offer for the company in January following a three-month pursuit by the European brewers. Shareholders will receive the proceeds of the deal by mid-May.

The takeover by Danish rival Carlsberg and Dutch firm Heineken will herald the break-up of a group which can trace its roots as far back as 1749.

Heineken will take on the UK operation, which employs around 3,000 staff at breweries in the UK.

FTSE 100 Index-listed S&N was formed by the merger of Scottish Brewers and Newcastle Breweries in 1960. It became the UK number one in 1995, when it doubled the scale of its beer business with the acquisition of Courage and set its sights on expansion overseas.

The Dutch giant will also gain S&N’s businesses in Portugal, Ireland, Finland and Belgium.

Meanwhile Carlsberg will take on S&N’s stake in BBH, their fast-growing 50/50 joint venture in Russia and the Baltics, and the firm’s operations in France, Greece, China and Vietnam.

The BBH stake was seen as a key prize in the brewer’s portfolio during a sometimes-fractious pursuit when S&N accused its suitors of trying to pick up the business “on the cheap”.

The duo finally succeeded with their fourth offer for the business after making their initial approach in October.

In February, the company announced plans to close its Reading brewery by 2010 under cost-cutting plans, potentially costing more than 300 jobs.

Recent annual results for the firm – its last as an independent group – showed flat profits of £444m (€565m) during 2007.

An 8% fall in UK profits after the wet summer and the impact of the smoking ban was offset by a stronger performance from higher growth markets in Russia and India.