Competition watchdog pondering £780m Carlsberg and Marston’s merger

Regulators are considering whether to launch an investigation into the £780 million merger between Carlsberg’s UK division and brewer Marston’s.

The Competition and Markets Authority (CMA) said it would establish whether the deal announced in June could reduce competition in the UK, although it emphasised that no decision has been made.

The move makes attempts by Carlsberg and Marston’s to seal the deal by the end of September – initially slated as a hopeful competition date – unlikely.

CMA officials said in a statement: “The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

Ralph Findlay
Ralph Findlay

Interested parties are invited to submit their views to the agency by September 2.

If the deal is not held up, the two companies hope to create the Carlsberg Marston’s Brewing Company, with Marston’s brewing business valued at £580 million and Carlsberg’s UK brewing division at £200 million.

Marston’s said it will own a 40% stake in the joint venture and will use the plans to focus on its pub and accommodation business.

The companies said talks started towards the end of 2019, and they hope to seal the deal in the third quarter of 2020.

Ralph Findlay, chief executive of Marston’s, told the PA news agency in June that the deal was “sign of confidence” in the long-term future of the UK brewing sector.

He said: “It’s clearly a very difficult time right now for brewery and pub operators.

“We know that things will remain uncertain over the next few months, but we are confident that this strengthens our position in the long term.”

Tomasz Blawat, managing director of Carlsberg UK, told PA at the time that the “strong heritage” of both firms made the venture logical.

He said: “I believe in having a strong balance of international brands and local brands. The deal complements this perfectly.

“I wish this was all happening in a different set of circumstances but things have substantially changed since we first had conversations last year.

“We were well into discussions when the coronavirus crisis kicked in and we were left facing the choice of whether to continue, but we have a very long-term view.”