Marston’s is the third national cask brewer to take over by a multinational corporation in barely a year, each time at a discount due to uncertainty in the British economy.
In January 2019, Asahi bought Fuller’s brewing business for £250 million, while Hong Kong property firm CKA paid £2.7 billion for Greene King’s brewing arm and pub estate in August. Brexit has suppressed the pound since the UK. voted itself out of the EU in June 2016, effectively making these real estate transactions more attractive to foreign investors than ever. Combined with the share price drop from COVID-19, this merger shows Carlsberg getting the best deal of the lot.
For Carlsberg the benefits are clear: with competition for taplines bound to intensify as potentially thousands of pubs are either unable to open or close for good after COVID-19, having another 1,600 pubs tied into a supply deal will keep Carlsberg brands growing.
The merger will offer Carlsberg brands access to Marston’s 1,600 pubs and will be a relief to the debt-stricken Marston’s, which owes £1.39 billion to creditors. However, it casts doubt on the future of the 11 other breweries and brands it owns, including the 50,000-hectoliter (43,000-barrel) Wychwood Brewery—home of Hobgoblin—and much-loved regional brands like Jennings Brewery and Ringwood Brewery.
Marston’s’ pub business is not part of the deal, but written into the agreement is the guarantee of a supply arrangement for Carlsberg brands. The merger creates the new Carlsberg Marston’s Brewing Company, 60% of which is owned by Carlsberg UK, with Marston’s receiving the remaining 40%. Marston’s also receives £273 million in cash, which places the value of the brewing side of its business at £580 million.