Heineken free to buy Punch pubs after CMA agrees to site sell-off

HEINEKEN has been given approval for its takeover of part of Punch Taverns after offering to sell 30 pubs by the end of the month to appease the concerns of competition authorities.

The Competition and Markets Authority (CMA) said it had accepted the proposals, meaning it would not launch an in-depth investigation into the deal, which often takes up to six months. Heineken made its offer after the CMA said in June that the takeover of part of the Punch estate could reduce competition in 33 areas across the UK.

The CMA said it used a process similar to that of its pre-merger scrutiny of the combination between Greene King and rival Spirit. The process identified local areas of concern by analysing where the pair would have a high share of pubs (more than 35pc), where pubs were close to one another, and where other local pubs might struggle to compete.

Most of the pubs on the slate are in the north of England or Scotland with half being from Heineken’s own Star Pubs & Bars estate and the other half belonging to Punch. The sales are expected to be completed by Aug 29. The CMA said various third parties had expressed concerns during its market testing that Heineken’s portfolio of pubs might buy less beer from rival breweries and offer customers less choice.

But the watchdog said the part of Punch being purchased by Heineken only represented 4pc of pubs in Great Britain and that only one brewer sold more than 10pc of its beer to those sites, meaning it was not a substantial part of the brewing industry’s sales. It also suggested that Heineken would be unlikely to drastically cut back the drinks on offer as this could hit the popularity of its pubs.

The Dutch brewer is acquiring around 1,900 sites from Punch after agreeing a £403m deal alongside investment firm Patron Capital, which is taking on the remaining 1,300 Punch pubs. The deal makes Heineken, which already boasts 1,100 sites through its Star Pubs & Bars business, the third largest pub group in the UK, with the company following Greene King and Enterprise Inns.

The bid was lower than a rival one from Emerald Investment Partners, a vehicle set up by Alan Mcintosh, Punch’s co-founder and former finance director, but was still favoured by the board.