Scottish & Newcastle

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Scottish & Newcastle



Fate	Acquired by consortium of Heineken and Carlsberg


Founded	1749
Defunct	April 2008
Location	Edinburgh, Scotland, UK
Industry	Beverages
Products	Beers, Lagers and Ciders
Subsidiary	S&N UK; Brasseries Kronenbourg; Alken-Maes; Central de Cervejas; Hartwall; Mythos; Waverley TBS; Beamish & Crawford; S&N Pub Enterprises

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. The company was acquired jointly by Heineken and Carlsberg in April 2008, with the company's assets being split between them.^[1] The trading name "Scottish & Newcastle UK" continues to be used, for the time being, to denote the UK trading operation of Heineken International.

1 History
2 Final Executive Management Group & Board of Directors
3 Pub Enterprises
4 BBH
5 Acquisition by Carlsberg/Heineken consortium
6 How the business will be divided between the Carlsberg/Heineken consortium
7 Brands
8 References
9 External links

[edit] History

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. 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.

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 based at Bow and Maidstone with the task being integrated into Dagenham and Croydon with the remainder of The City and West End Accounts being serviced by Greenford. Reciprocal acquisitions saw the Caledonian Brewery in Edinburgh and the Northern Clubs' Federation Brewery in Dunston added to the business.

By 2005, S&N had become a major European brewer with a balance of high growth emerging markets and high volume developed markets. Annual volumes are now approaching 60 mhl.

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.

[edit] Final Executive Management Group & Board of Directors

The Executive Management Group (EMG) of Scottish & Newcastle plc at 28 April 2008 (before acquisition) consisted of:

John Dunsmore, Chief Executive Officer (Main Board Director)
John Nicolson, Managing Director of Developing Markets (Main Board Director)
Tim Seager, Managing Director of Brasseries Kronenbourg (France)
Jeremy Blood, Managing Director of Scottish & Newcastle UK Limited (UK & Ireland)
Alberto da Ponte, Managing Director of Sociedade Central de Cervejas e Bebidas, S.A (Portugal)
Yrjo Narhinen, Managing Director of Oy Hartwall A.B. (Finland)
Ian McHoul, Finance & Strategy Director (Main Board Director)
Eleanor Cannon, Human Resources & Corporate Affairs Director
Stephen Glancey, Operations & Information Systems Director (Main Board Director)
Nuno Teles, Marketing & Venture Markets Director
Peter Kennerley, Company Secretary & General Counsel (Main Board Director)

The Board of Directors of Scottish & Newcastle plc at 28 April 2008 (before acquisition) consisted of:

Sir Brian Stewart, Chairman
John Dunsmore, Chief Executive Officer
John Nicolson, Managing Director of Developing Markets
Stephen Glancey, Operations & Information Systems Director
Peter Kennerley, Company Secretary & General Counsel
Ian McHoul, Finance & Strategy Director
Sir Angus Grossart, Non-executive Director
Sir Ian Robinson, Non-executive Director
Philip Bowman, Non-executive Director
Bridget Macaskill, Non-executive Director
Brian Wallace, Non-executive Director
Erik Hartwall, Non-executive Director
Henrik Therman, Non-executive Director
Neville Bain, Non-executive Director
Ian McAllister, Non-executive Director

[edit] Pub Enterprises

In 2003, S&N sold its remaining Pub estate to the Spirit Group - retaining a successful tenanted pub management business (S&N Pub Enterprises) with contracts to look after some 2,000 pubs on behalf of banks and other Pub companies.

[edit] BBH

By acquiring Hartwall, 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.^[2]

[edit] 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.^[3] 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.^[4] The offer was immediately rejected by the Board of S&N, who believed that it significantly undervalued the worth of the S&N group.^[5] On 31 October, S&N announced that it had requested the Swedish 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". ^[6]

A new offer was made public on 15 November 2007 by Carlsberg and Heineken, raising the offer to 750 pence per share. (Thus being an increase of 30 pence per share.) The partners claimed this was "substantially in excess of the standalone independent value of S&N".^[7] 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.^[8]

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.^[9]

On 31 March 2008, shareholders approved the £7.8 billion takeover by Heineken and Carlsberg.^[10] The acquisition was completed on 29 April 2008 as S&N's shares were delisted from the London Stock Exchange.^[1]

[edit] How the business will be divided between the Carlsberg/Heineken consortium

Heineken get:

S&NUK; Beamish & Crawford - ROI; Hartwall - Finland; Alken Maes - Belgium; Central de Cervejas - Portugal; Indian JV with UB; US export business and other venture markets.

Carlsberg get:

Remaining 50% of BBH; Kronenbourg - France; Mythos - Greece; Chongqing joint venture in China; Venture markets:- Switzerland; Africa; Hungary; Luxembourg; Indian Ocean; South and Central America Andorra and Asia.