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Scottish & Newcastle

 
Wikipedia: Scottish & Newcastle
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Scottish & Newcastle
Former type Public
Fate Acquired by consortium of Heineken and Carlsberg
Founded 1749
Defunct April 2008
Headquarters Edinburgh, Scotland, UK
Key people Sir Brian Stewart (Chairman), John Dunsmore (Chief Executive)
Industry Beverages
Products Beers, Lagers and Ciders
Subsidiaries S&N UK; Brasseries Kronenbourg; Alken-Maes; Central de Cervejas; Hartwall; Mythos; Waverley TBS; Beamish & Crawford; S&N Pub Company
Website www.scottish-newcastle.com

Scottish & Newcastle plc was one of the world’s leading "long alcoholic drinks" (LADs) companies with strong positions in 15 countries, including leadership in the UK, France and Russia. It was headquartered in Edinburgh, Scotland, UK. In the last 20 years, S&N expanded significantly from its home base to become a major international business with beer volumes growing almost tenfold. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but it was acquired jointly by Heineken and Carlsberg in April 2008, with the company's assets being split between them. The trading name "Scottish & Newcastle UK" continues to be used, for the time being, to denote the UK trading operation of Heineken International.

Contents

History

Development of the business

The Company was founded by William Younger I in 1749 in Edinburgh as William Younger's Brewery.[1] It merged with McEwan's in 1931 becoming Scottish Brewers.[1] In 1960 it merged again this time with Newcastle Breweries to form Scottish & Newcastle.[1]

By 1985, the company had become a regional brewer focused on Scotland and the North of England, ranked number five in the UK and selling around 6 Mhl per annum. By 1995, with the purchase of rival brewing business Courage, S&N had become the UK’s leading brewer, producing around 15 Mhl per annum. Its UK brewing division became known as Scottish Courage but this reverted to "S&N UK" in February 2006. Its Managed Pub division was known as "S&N Retail" with around 2,500 outlets in the estate. In early 2000, S&N expanded outside the UK via a number of acquisitions in Western Europe, growing sales to over 50 Mhl per annum. By acquiring Hartwall in 2002, Finland’s leading beverage company business, S&N became 50% owners of Baltic Beverages Holding (BBH) encompassing brewing interests in Russia, Ukraine, Kazakhstan and the Baltic Countries of Latvia, Lithuania and Estonia.[2] The remaining 50% of BBH was owned by Carlsberg, which gained full control after the takeover of S&N in 2008.[3]

In July 2003, S&N acquired the Bulmers cider business, adding the Strongbow, Scrumpy Jack and Woodpecker brands to its portfolio, together with the UK's biggest cider mill and orchards in Hereford.[4]

In November 2003, S&N sold its remaining pub estate to the Spirit Group - retaining a successful tenanted pub management business (S&N Pub Company[5]) with contracts to look after some 2,000 pubs on behalf of banks and other pub companies.[6]

2004 saw some radical cost cutting measures, particularly within the UK where it was noted by analysts that the cost base was too high. During the year, the Fountain Brewery in Edinburgh was closed, followed some months later by the Tyne Brewery in Newcastle. This was followed in 2005 by the closure of distribution depots at Bow, Chelmsford and Maidstone with the task being integrated into Dagenham Regional Distribution Centre and depots at Hackbridge and Croydon with the remainder of the London Accounts being serviced by Greenford. The company began to use Transit Points in Chelmsford and Faversham as cheap logistical alternatives to full working depots. Reciprocal acquisitions saw the Caledonian Brewery in Edinburgh and the Northern Clubs' Federation Brewery in Gateshead added to the business.[7]

In February 2005, Scottish & Newcastle and Carlsberg UK finalised a joint venture to carry out Technical Services work in the UK. Service Dispense Equipment Limited (SDEL) was formed from the dispense assets of both businesses.[8] This work is now contracted by the JV, to a new company Innserve Ltd. Innserve supplies, installs and maintains drinks dispense systems in 98,000 Pubs and bars around the UK.

In 2006, S&N entered into a joint venture with the Swiss based freight company, Kuehne and Nagel to set up a UK drinks distribution company (K+N Drinks Logistics). Some 3,000 S&N employees transferred to the new business.[9]

Acquisition by Carlsberg/Heineken consortium

On 17 October 2007, Heineken International and Carlsberg jointly announced that they were considering forming a consortium to bid for, and acquire the total capitalisation of Scottish & Newcastle. No formal offer had been put to S&N at the time.[10] On 25 October, however, Heineken and Carlsberg announced that they had submitted a written proposal to S&N. They invited S&N to discuss a possible offer, the terms as to which they were prepared to proceed included a bid of 720 pence per share.[11] The offer was immediately rejected by the Board of S&N, who believed that it significantly undervalued the worth of the S&N group.[12] On 31 October, S&N announced that it had requested the Danish Courts to begin arbitration proceedings between itself and Carlsberg A/S in relation to the latter's alleged contractual infringements, relating to the joint ownership of Baltic Beverages Holdings (BBH). Carlsberg immediately countered that it believed S&N's claims were "spurious and without merit". [13]

A new offer was made public on 15 November 2007 by Carlsberg and Heineken, raising the offer to 750 pence per share. The partners claimed this was "substantially in excess of the standalone independent value of S&N".[14] On 17 January 2008, S&N announced that it was now in formal discussions with the consortium, following a revised proposal to purchase the business for £8.00 per share.[15]

On 25 January 2008, following limited due diligence and discussions with S&N, the consortium announced a formal cash offer for the entire S&N business at £8.00 per share. This offer had the full support of the S&N Board and was recommended to shareholders.[16]

On 31 March 2008, shareholders approved the £7.8 billion takeover by Heineken and Carlsberg.[17] The acquisition was completed on 29 April 2008 as S&N's shares were delisted from the London Stock Exchange.[18]

Operations

S&N owned or co-owned three of the top ten beers in Europe.

  • Baltika (stake acquired by Carlsberg)
  • Foster's (European rights, now owned by Heineken)
  • Kronenbourg 1664. (now owned by Carlsberg, although S&N UK/Heineken retain UK rights on a 50 year supply contract)

In addition to these key brands, its portfolio included other well-known drinks brands (acquirer in brackets):

Division of the business between the Carlsberg/Heineken consortium

Heineken got:

S&NUK; Beamish and Crawford - ROI; Hartwall - Finland; Alken Maes - Belgium; Central de Cervejas - Portugal; Indian JV with UB; US export business and other venture markets.

Carlsberg got:

Remaining 50% of BBH; Kronenbourg - France; Mythos (beer) - Greece; Chongqing joint venture in China; Venture markets:- Switzerland; Africa; Hungary; Luxembourg; Indian Ocean; South and Central America Andorra and Asia.

See also

References

  1. ^ a b c "Records of William Younger & Co Ltd, brewers, Edinburgh, Scotland". Archives hub. July 2009. http://www.archiveshub.ac.uk/news/wyounger.html. Retrieved 2009-07-25. 
  2. ^ "S&N gulps Hartwall and moves into Russia". BBC News. 15 February 2002. http://www.independent.co.uk/news/business/analysis-and-features/sampn-gulps-hartwall-and-moves-into-russia-660776.html. Retrieved 2009-01-01. 
  3. ^ "Baltika Brewery". Carlsberg Group. http://www.carlsberggroup.com/Company/Markets/Pages/Russia.aspx. Retrieved 2008-04-30. 
  4. ^ "£278m Bulmers buy completes S&N u-turn". Guardian. 29 April 2003. http://www.guardian.co.uk/business/2003/apr/29/9. Retrieved 2009-01-01. 
  5. ^ S&N Pub Company
  6. ^ "Pub sector recast as S&N sells retail division". Guardian. 7 October 2003. http://business.timesonline.co.uk/tol/business/article1167145.ece. Retrieved 2009-01-01. 
  7. ^ "Further fears after brewery cuts". BBC News. 18 February 2004. http://news.bbc.co.uk/1/hi/scotland/3496871.stm. Retrieved 2009-01-01. 
  8. ^ "Brewing big guns are refused another drink". Edinburgh News. 11 March 2005. http://edinburghnews.scotsman.com/business/Brewing-big-guns-are-refused.2609602.jp. Retrieved 2009-01-01. 
  9. ^ "Unions angered by Scottish & Newcastle's latest venture". Manufacturing News. 26 April 2006. http://www.themanufacturer.com/uk/content/6529/Unions_angered_by_Scottish_&_Newcastle%92s_latest_venture?PHPSESSID=58e4ea21ea9228363c0ef41a1fa40636. Retrieved 2009-01-01. 
  10. ^ "Bid plan for Scottish & Newcastle". BBC News. 17 October 2007. http://news.bbc.co.uk/2/hi/business/7048796.stm. Retrieved 2007-10-31. 
  11. ^ Heineken N.V. (25 October 2007). "Heineken N.V. and Carlsberg A/S approach to Scottish & Newcastle plc". Press release. http://www.heinekeninternational.com/071025heinekennvpressrelease.aspx. Retrieved 2007-10-25. 
  12. ^ Scottish & Newcastle PLC (25 October 2007). "REG-Scot.& Newcastle Statement re Possible Offer". Press release. http://www.scottish-newcastle.com/snplc/ir/fininfo/finnews/rnsitem?id=1193319469nRNSY3731G. Retrieved 2007-10-31. 
  13. ^ "REG-Scot.& Newcastle Statement re Possible Offer". Reuters. 32 October 2007. http://investing.reuters.co.uk/news/articleinvesting.aspx?type=mergersNews&storyID=2007-10-31T170126Z_01_L31805990_RTRIDST_0_SCOTTISH-NEWCASTLE-BBH-UPDATE-1.XML. Retrieved 2007-10-31. 
  14. ^ Carlsberg A/S (15 November 2007). "Carlsberg A/S and Heineken N.V. - full and fair proposal made to Scottish & Newcastle PLC". Press release. http://www.carlsberggroup.com/media/News/Pages/19_151107.aspx. Retrieved 2007-11-15. 
  15. ^ S&N plc (17 January 2008). "Discussions wth Carlsberg A/S and Heineken N.V.". Press release. http://www.scottish-newcastle.com/snplc/media/news/2008/2008-01-17/. Retrieved 2007-11-15. 
  16. ^ "S&N accepts £7.8bn takeover deal". BBC News. 25 January 2008. http://news.bbc.co.uk/1/hi/business/7208341.stm. Retrieved 2009-01-01. 
  17. ^ "Scottish & Newcastle shareholders agree takeover". BBC News. 31 March 2008. http://news.bbc.co.uk/1/hi/business/7322668.stm. Retrieved 2009-01-01. 
  18. ^ Bradley, Jane (29 April 2008). "S&N sails into history as brewer taken over". The Scotsman. http://business.scotsman.com/fooddrinkagriculture/SN-sails-into-history-as.4028900.jp. Retrieved 2008-04-30. 

External links


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