The takeover was originally recommended to shareholders in August by the Greene King board, which was backed earlier this month and cleared by the European Commission. Cash consideration under the terms of the acquisition implied an enterprise value of £4.6bn.
It is expected that trading in Greene King shares on the London Stock Exchange’s Main Market for listed securities, as well as the listing shares on the Financial Conduct Authority’s official list, will be cancelled by 8pm tomorrow (31 October).
Commenting on the deal, Paul Ruddy, leisure analyst at investment bank Goodbody, said the purchase could lead to even more mergers and acquisitions (M&A) in the food and drink sector.
“A big part of this related to weaker Sterling which effectively makes UK assets cheaper for overseas investors,” said Ruddy. “The timing of further M&A is the great unknown but CKA’s comment when it bought Greene King is worthy of consideration – ‘long term and strategic investor in stable, profitable and cash flow generating businesses that benefit from real estate backing’.
“Are there other overseas investors out there with similar criteria? If so, it is hard to rule out further M&A in the pubs sector.”
Experience investor
Speaking as the takeover was announced, Greene King chief executive Nick Mackenzie said: “CKA is an experienced UK investor and shares many of Greene King’s business philosophies.
“They understand the strengths of our business and we welcome their commitment to working with the existing management team, evolving the strategy and investing in the business to ensure its continued long-term growth.”
Job security
However, the sale raised questions over the security of jobs at the brewer’s headquarters in Bury St Edmonds and its distribution centres in Abingdon, Oxfordshire and Eastwood. Earlier this month, workers union Unite redoubled efforts in a bid to seek clarity and reassurances for the roles of 250 of its members across the business.
Speaking at the time, regional officer Mark Jaina said: “We have had two meetings with management since the takeover was revealed in August, but the information disclosed, so far, is scanty, despite media reports that pub closures could be on the cards.”
Meanwhile, Valeo Foods Group has confirmed closure of the deal to acquire Bakery Foods from 2 Sisters Food Group for a total consideration of around £67m.