Bass on verge of pounds 200m Carlsberg-Tetley deal
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Your support makes all the difference.Bass is on the verge of sealing its pounds 200m deal to buy Carlsberg- Tetley. The merger, which would mark the biggest consolidation of the UK brewing industry in the last century, could be announced today.
Lawyers from Bass and the joint owners of Carlsberg-Tetley - Allied Domecq and Carlsberg of Denmark - were burning the midnight oil last night, attempting to conclude several months of complex negotiations before the weekend.
The City has been growing impatient for final details of the deal following official confirmation at the end of last month that negotiations were taking place. It will return Bass, under the leadership of Sir Ian Prosser, to the top of the brewing league ahead of Scottish and Newcastle, which last year bought Courage. Together, Bass and S&N control more than 70 per cent of Britain's brewing capacity. From 6,000 breweries in 1900, the total number of breweries has been whittled down to a couple of hundred.
Analysts are keen to see an end to the uncertainty hanging over Bass's share price, caused by fears that the deal may dilute the company's earnings for the next two years. "We desperately need to see the full details," said one analyst yesterday.
The regulatory authorities are also keen to scrutinise the deal which will give Bass control over almost 40 per cent of the beer market. The Department of Trade and Industry's sanction of last year's takeover of Courage, which took S&N's market share beyond 35 per cent, should not be construed as a precedent, according to industry observers.
Opinion in the industry and the City is divided over whether the takeover of Carlsberg-Tetley should be examined by the Monopolies and Mergers Commission. S&N was dealt with lightly, having only to amend a beer supply agreement with the Inntrepreneur pub chain.
Since then, however, Ian Lang, President of the Board of Trade, has abandoned the "national champions" policy adopted by his predecessor Michael Heseltine. The Government, one analyst said, may well become concerned about control of more than 70 per cent of the market by just two companies.
Analysts said that Bass was likely to agree to more onerous undertakings than those imposed on S&N to avoid a reference to the MMC. Some believe it may be forced to sell a couple of hundred pubs and dispose of several brands from the Carlsberg-Tetley portfolio.
Bass stands to gain control over one of the best-selling bitters, Tetley, and two leading lagers, Carlsberg Export and Super. It already owns the best-selling Carling Black Label, plus Caffreys, Tennent's Extra, Stones, and Worthington.
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