Published: Fri, February 17, 2017
Money | By Oscar Reynolds

UK Competition Regulator Opens Probe Of Heineken's Punch Takeover

UK Competition Regulator Opens Probe Of Heineken's Punch Takeover

The U.K. antitrust regulator on Thursday said it is opening an investigation into Heineken NV's plan to drop £305 million ($380 million) to purchase roughly 1,900 pubs owned by Punch Taverns in the country to assess the transaction's effects on competition.

Heineken already owns some 1,100 leased pubs across the United Kingdom and would add a further 1,895 after the takeover, while Patron would acquire 1,329 following the carve up.

In CAMRA's letter, national chairman Colin Valentine, said: 'We note that Heineken already has an existing market share of 24 per cent in the on-trade and has a declared policy of restricting the access of competitors to the pubs that they own'. The Punch Tenant Network, an independent group that represent's Punch's publicans, fears Heineken's limited number of own-brand products, which include Foster's lager and Strongbow cider, will dash out any pub individuality.

This first phase of the probe will close on April 24, after which the CMA will decide whether to launch a phase 2, in-depth investigation of the deal, which would last six months.

The first phase of the investigation is now scheduled to last until April 24.

The Punch Tenant Network, which represents the United Kingdom firm's publicans, criticised the deal last month, saying it will reduce beer and cider options for customers.

Heineken-owned brands now make up around 85% of what is on offer in the brewer's Star Pubs & Bars division.

A Heineken spokesman said: 'This morning's announcement confirms an important and fully expected stage in the process to finalise our acquisition of the Securitisation A pubs from Punch and Heineken will be fully co-operating with the CMA'.

It said volatility in global currency markets - particularly the Mexican peso, the Nigerian naira and the British pound - had cost it about £976m, and the firm expects to be a further £30m out of pocket in 2017.

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