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.
History
Development of the business
The
Company was founded by William Younger I in 1749 in Edinburgh as William Younger's Brewery. It
merged with
McEwan's in 1931 becoming
Scottish Brewers. In 1960 it merged again this time with
Newcastle Breweries to form
Scottish & Newcastle.
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. The
remaining 50% of BBH was owned by
Carlsberg, which gained full control after the
takeover of S&N in 2008.
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.
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) with contracts to look after some
2,000 pubs on behalf of banks and other pub companies.
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.
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. 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.
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. 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. The offer was immediately rejected by the
Board of S&N, who believed that it significantly undervalued
the worth of the S&N group. 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".
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". 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.
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.
On 31 March 2008, shareholders approved the £7.8 billion takeover
by Heineken and Carlsberg. The acquisition was completed on 29
April 2008 as S&N's shares were
delisted from the
London Stock Exchange.
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 - Greece; Chongqing
joint venture in China; Venture markets:- Switzerland; Africa;
Hungary; Luxembourg; Indian Ocean; South and Central AmericaAndorra
and Asia.
See also
References
External links
. (Heineken)
(Heineken)
(Heineken)
(stake
acquired by Carlsberg)
(Heineken)
(stake
acquired by Heineken)
Wikis
Quiz
Map
Search