Sights set on Scottish & Newcastle

After months of rumours, Carlsberg and Heineken have confirmed that they are in discussions on a possible bid for rival brewer Scottish & Newcastle.

Morningstar.co.uk Editors 17 October, 2007 | 2:46PM

No formal approach has yet been made, but speculation points to a bid at around the 800p per share mark. The shares are currently 763p, up 126p today. A price of 800p would value S&N shares at £7.5bn. It has £1.9bn of debt, giving an overall price tag of £9.4bn.

The deal would see Carlsberg take over S&N’s business in France and Greece. The real prize, however, would be the 50% stake in BBH (Baltic Beverages Holdings). Carlsberg owns the other half and has made no secret of its desire to get its hands on the remaining share of this leading brewer, which operates in Russia, the Ukraine, Kazakhstan and the Baltic States.

Heineken would take over S&N’s business in the UK and other European markets. This split should circumvent any competition issues in the UK, as Heineken left the mainstream UK lager market several years ago.

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