On 25 January 2008, Carlsberg and Heineken together with Scottish & Newcastle (S&N) announced that they had reached an agreement on the terms of a recommended cash offer to be made by Carlsberg and Heineken jointly. The transaction has compelling strategic rationale for Carlsberg.

The global brewing industry has continued to consolidate and by participating in this consolidation Carlsberg will continue to strengthen its competitive positions. For Carlsberg, the transaction encompasses  S&N’s share of BBH, as well as the French, Greek, Chinese and Vietnamese operations.

The acquisition will create a unique platform for the future. Similar to the buy-out of Orkla SA in 2004, this is about taking control of our destiny and effectively repositioning Carlsberg in the top league of global brewers. The deal thus represents a transformational transaction which will deliver a major increase in Carlsberg’s operational scale and long term growth prospects, resulting in the creation of the world’s fastest growing global beer company with significantly enhanced operational scale and long-tem growth. Moreover, the transaction represents a natural next step for Carlsberg and follows its clear strategy of achieving full control over its key operational assets.

In a few words, the transaction is about long-term value creation for Carlsberg’s shareholders. The transaction places Carlsberg in a position of full control of one of its key businesses, it provides a strong platform for future growth and thus contributes to secure the foundation for a profitable future.

In more details, the most notable benefits are:

  • full control over BBH: Carlsberg will gain full control over BBH, removing uncertainty over the long-term control of the asset and substantially increasing Carlsberg’s long-term growth profile. Unification of BBH ownership will enable Carlsberg to maximise the potential of its key Carlsberg and Tuborg brands in the BBH markets;

  • increased exposure to growth markets: Carlsberg will significantly increase its exposure to growing beer markets;

  • enhanced position in Western Europe as the clear number two brewer: the addition of the French and Greek operations complements Carlsberg’s existing portfolio of leading European market positions providing increased scale and an opportunity to extend Carlsberg’s proven efficiency programmes;

  • scale benefits: the enhanced beer platform will allow Carlsberg to generate significant synergy benefits based on reductions in overheads, implementation of best brewing practices and purchasing savings; and • expanded Asian platform: the transaction reinforces Carlsberg’s long-standing and growing Asian presence through the acquisition of positions in the attractive Chinese and Vietnamese markets.