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Fri 22nd May 2020 - Marston's and Carlsberg UK form joint venture business
Marston's and Carlsberg UK form joint venture business: Marston’s and Carlsberg UK have formed a joint venture partnership, Carlsberg Marston’s Brewing Company (CMBC), to create a “best in class, brand-led UK brewer of scale”. The deal values the Marston’s Brewing Business at up to £580m (13.0 times adjusted 2019 Ebitda) and the Carlsberg UK Brewing Business at £200m – Marston’s is to receive a 40% stake in CMBC and a cash equalisation payment of up to £273m. Carlsberg UK takes a 60% stake in CMBC. Marston’s and Carlsberg UK said the deal would create significant value through synergies and productivity improvements, with reported annual joint venture cost synergies of about £24m expected by the end of the third year following completion. The cash equalisation payment to Marston’s will materially reduce debt outside its securitisation and provides additional financial flexibility. Marston’s will focus on its “high-quality, well-invested pub and accommodation business while retaining a 40% interest in a larger, more attractive brewing business”. Following discussions initiated in late 2019, the transaction is anticipated to complete in the third quarter of 2020, subject to shareholder approval and competition clearance. Ralph Findlay, chief executive of Marston’s, said: “This new partnership acknowledges Marston’s strategy, position and consistent outperformance against the UK beer market, realising value for shareholders, while retaining an interest in the future upside of the combined entity. Marston’s strong heritage, extensive distribution platform and established reputation for brewing and logistics excellence, together with Carlsberg UK’s values, long history in beer, brand portfolio and scale, combine the best attributes of both to create a compelling beer business with an outstanding portfolio of global and local beer brands, proven brewing expertise, strong distribution network and wholesale opportunity. Marston’s will play a key role in the prospects of the combined entity that represents an exciting new chapter in Marston’s established brewing heritage and future potential, while enabling it to further reduce its debt and focus on maximising value from its high-quality pub estate.” Tomasz Blawat, managing director of Carlsberg UK, added: “We are excited to move into the next phase of our growth strategy. After a successful relaunch of Carlsberg Danish Pilsner in the UK last year, we are now building a new beer company by combining two organisations with shared values and strong history and heritage in brewing. Our intent for CMBC is for it to become a platform for growth for all of our customers and suppliers, offering a bigger beer portfolio of complementary international, national and regional brands. We believe the new business will deliver even more value for employees, customers and consumers, thereby creating greater future growth potential.” Cees ‘t Hart, chief executive of Carlsberg Group, said: “The creation of the joint venture is an important step forward for our UK business. The joint venture’s brand portfolio will allow us to offer a significantly stronger beer portfolio to our UK customers. In addition, the combined business will bring our customers wider choice, greater capacity, product innovation and marketing and distribution efficiency benefits.” 


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