EU backs Heineken's S&N takeover

European Union regulators have approved most of Heineken's deal to buy Scottish & Newcastle's (S&N) European business.

However the EU competition commission raised concerns about the impact of the proposed deal in Ireland.

Regulators will refer the case to Irish authorities over concerns that its beer market might become dominated by Heineken and Guinness owner, Diageo.

S&N shareholders have approved a £7.8bn takeover deal, while EU regulators have approved Carlsberg's planned stake.

The deal marks the end of independence for the UK's largest brewer, which owns Fosters, Newcastle Brown Ale, John Smith's and Kronenbourg 1664.

In Ireland it also owns Beamish and Crawford, which would be owned by Heineken if Irish authorities give it clearance.

The EU approved the sale of S&N's ventures in Finland, Belgium and Portugal, as well as the UK.

Lucrative

Under the takeover, Denmark's Carlsberg will assume control of the majority of S&N's businesses outside the UK and Ireland.

That includes Carlsberg's Russian joint venture with S&N - Baltic Beverage Holdings (BBH).

Analysts say that Carlsberg's desire to gain full control over the highly lucrative BBH was a key factor behind the takeover.

In February, S&N released its last set of annual profits for the firm, which showed that 2007 profits were £444m, unchanged on 2006.

UK profits were down 8% because of the smoking ban and poor summer weather.

S&N currently employs 3,300 people in the UK, with breweries also in Manchester, Gateshead, Tadcaster and the Bulmers cider mill in Hereford.

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