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Tue 11th Jul 2017 - CMA gives provisional go-ahead to Heineken takeover of Punch after competition concerns addressed, 30 pubs to be sold
CMA gives provisional go-ahead to Heineken takeover of Punch after competition concerns addressed, 30 pubs to be sold: The Competition and Markets Authority (CMA) has given the provisional go-ahead for Heineken’s takeover of Punch after agreeing that proposals to sell 30 pubs would address competition concerns. Heineken has offered to sell 15 Star Pubs & Bars sites and 15 Punch pubs and the CMA has decided this would resolve its worries over the lessening of competition in 33 areas and remove the need for an in-depth investigation. The CMA will now consult on its findings with a closing date of Wednesday, 26 July. The pubs Heineken has offered to sell are: 1314 Inn, Stirling (Star Pubs & Bars); Anvil Inn, Bonnyrigg (Star Pubs & Bars); Bells Bar, Glasgow (Star Pubs & Bars); The Bird Inn, Washington (Punch); Bulls Head, East Leaken (Star Pubs & Bars); The Bush, Silverdale (Star Pubs & Bars); Coach & Horses, Hexham (Punch); The County Hotel, Hexham (Punch); The Falcon, Prudhoe (Punch); The Fleece Inn, Ilkley (Punch); Fox & Hounds Inn, Ryton (Punch); Goblin Ha Hotel, Haddington (Punch); Grapes Inn, Preston (Punch); Kimberley Tavern, Glasgow (Star Pubs & Bars); Kinleith Mill, Edinburgh; (Star Pubs & Bars); Malleny Arms, Balerno (Star Pubs & Bars); Mercat Hotel, Haddington (Punch); Nags Head, East Leake (Punch); Navigation Inn, Loughborough (Star Pubs & Bars); Plough Tavern, Haddington (Punch); The Plungington, Preston (Star Pubs & Bars); Poynters Arms, Dunstable (Punch); Red Lion, Chobham (Punch); Riccarton Inn, Currie (Star Pubs & Bars); Royal Oak, Brandon (Punch); Royal Oak, Nelson (Star Pubs & Bars); Strathspey Bar, Glasgow (Punch); Sync Bar, Pinner (Star Pubs & Bars); Thornton Arms, Burnley (Star Pubs & Bars); and Weavers Bar, Kirkcaldy (Star Pubs & Bars). The CMA stated: “The CMA currently considers that, subject to responses to the consultation required by schedule 10 of the Act, the proposed undertakings will resolve the substantial lessening of competition (SLC) identified in the SLC decision in a clear-cut manner – ie for the reasons set out in the undertakings in lieu of the provisional acceptance decision, the CMA currently does not have material doubts about the overall effectiveness of the proposed undertakings or concerns about their implementation. This is because the proposed structural divestments are intended to replace the competitive constraint provided by Punch on Heineken that would otherwise be lost following the merger in each of the 33 local areas. The CMA also considers the proposed undertakings would be capable of ready implementation because each of the divestment sites are largely standalone businesses (that is, they operate relatively independently), are saleable and likely to continue in operation as a going concern. For the reasons set out above, the CMA currently considers the proposed undertakings are, in the circumstances of this case, appropriate to remedy, mitigate or prevent the competition concerns identified in the SLC decision and form as comprehensive a solution to these concerns as is reasonable and practicable. The CMA therefore gives notice that it proposes to accept the proposed undertakings in lieu of a reference of the merger for a phase 2 investigation. Before reaching a decision as to whether to accept the proposed undertakings, the CMA invites interested parties to make their views known to it. The CMA will have regard to any representations made in response to this consultation and may make modifications to the proposed undertakings as a result. If the CMA considers that any representation necessitates any material change to the proposed undertakings, the CMA will give notice of the proposed modifications and publish a further consultation.” In February, Punch shareholders overwhelmingly voted to back the deal that would see Heineken and Patron Capital, using newco Vine Acquisitions as a bidding vehicle, acquire Punch. Under the terms of the deal, Heineken would acquire from Patron a portfolio of about 1,900 Punch pubs with Patron retaining an additional 1,329 it would run itself.

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