BBC News | BUSINESS | UK brewer buys Kronenbourg

The new business will see Kronenbourg and Peroni line up alongside S&N's traditional tipples including Newcastle Brown Ale.

S&N chief executive Brian Stewart said the enlarged brewing activities would rank it alongside Europe's biggest brewer, Heineken.

"We started from a strong base in the UK. The new business will now be a leader in Europe," he said.

"From that platform the new group can both enhance its position in Europe and expand further to compete in the global market."

San Miguel may follow

The deal is based on a three-year takeover by S&N of Danone's brewing interests in the UK, France, Belgium, Ireland and Italy.

S&N will inject Ł472m in cash, shares and preference shares, with Danone retaining an option until April 2003 to dispose of its interest in the partnership for a further Ł1.2bn.

Danone is restructuring its Spanish brewing operations in a separate deal by selling its interest in San Miguel to Mahou, in which it will continue to own a 33.4% stake.

S&N will retain an option to buy that stake in Mahou.

The Danone deal may provide some comfort for S&N's shareholders, whose holdings have halved in value since last May, culminating in S&N being dropped from the FTSE 100 index of leading British stocks last Friday, in its quarterly revision.

Lager strength

S&N's planned sale of its leisure division will help fund its brewing acquisition.

It has put its Center Parcs holiday villages and Pontins holiday camps up for sale to focus on expanding its brewing and retail pub operations.

The merged beer business will be particularly strong in the lager market.

S&N's Foster's lager is the second biggest seller in the UK market, Kronenbourg is the leader in France - selling twice as much as its nearest rival - while Peroni is the second biggest seller in Italy.


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