Regulator approves Carlsberg’s £780m merger with Marston’s

Carlsberg and Marston’s are to be allowed to merge in a £780 million deal, even through it could lead to pubs serving fewer beers from independent brands.

The Competition and Markets Authority said it has cleared the combination of the businesses, after finding that concerns raised over the deal did not warrant blocking it.

The regulator said Marston’s owns many pubs across the UK which might choose to serve more Carlsberg products, and fewer independent brands.

“The CMA found, however, that Marston’s pubs form only a small part of the potential UK customer base for brewers, and that independent brewers would continue to have sufficient access to pubs after the merger, allowing them to compete effectively,” it said in a statement.

It drew a similar conclusion about the combined companies’ wholesale operations, saying that brewers will have sufficient alternative wholesalers to choose from after the deal.

The companies’ breweries are also different enough for there not to be any real concerns, the CMA said. Carlsberg produces mainly lager, while Marston’s focuses on ale.

Shore Capital analyst Greg Johnson said the CMA’s decision will help Marston’s reduce its debt, which was an issue even before the pandemic.

“Although, given the enlarged entity would command around 14% of the UK beer market, we expected the merger to be cleared, it is a positive development, unlocking the £239 million initial cash payment to Marston’s,” he said.

However, he warned that “the trading backdrop remains challenging” as Covid-19 continues to force restrictions on pubs and other leisure businesses.

Marston’s said: “We are pleased to report that the Competition and Markets Authority have cleared the proposed joint venture, and the antitrust condition to completion has now been satisfied.

“The transaction will now complete at the end of October 2020.”