Heineken agrees to sell off pubs to seal merger

Competition: Fears Punch Taverns deal will hit wider trade

Heineken has offered to offload several pubs as part of efforts to satisfy competition concerns over its £403 million takeover of pub chain Punch Taverns.

The Competition and Markets Authority (CMA) said yesterday the group had offered to sell pubs in each location that could see the deal impact competition and see drinkers face higher prices.

The watchdog had identified 33 areas of concern across Britain, but said Heineken’s proposals, or a modified version of them, “might be acceptable to remedy the competition concerns it has identified”.

The proposed deal has infuriated the Scottish Licensed Trade Association which fears the enlarged group will be a threat to smaller operators in the sector.

Earlier this month, SLTA chief executive Paul Waterson called on the CMA to launch a full competition probe into the merger, warning it will “inevitably lead to decreased choice for consumers, price rises, pub closures and job losses UK-wide” if it goes ahead.

The CMA will now undertake a public consultation and decide by August 22 whether or not to refer the merger for an in-depth investigation.

The CMA has previously said the 1,895 Punch pubs being snapped up by Heineken, which it will add to 1,100 leased pubs it already owns across the UK, only account for 4% of the market and are therefore “not a major route to market for brewers”.

Heineken sealed its deal last December to snap up Punch Taverns with private equity firm Patron Capital, having fought off a rival bid from the pub chain’s co-founder Alan McIntosh with a 180p-per-share offer.

Under the deal, Heineken would buy 1,895 pubs, while Patron would acquire 1,329.

A spokeswoman for Heineken said: “We welcome confirmation from the CMA that only a small number of pubs are required to be sold.

“It’s a sensible outcome and good news for pub-goers across the UK who will see the benefit of well-invested pubs in their communities.”