Scottish Courage, the UK's leading brewer and subsidiary of Scottich & Newcastle, is to close its Tyne Brewery in Newcastle by Spring 2005.

The company said that it had acquired Federation Brewery from Northern Clubs Federation Brewery (NCFB) for £7.2m and will combine the two brewing operations at the NCFB site, two miles away at Dunston.  Scottish Courage has also today made an offer to acquire the remaining assets of NCFB for £16.2m, which has been unanimously recommended by the NCFB Board.

John Dunsmore, chairman and managing director of Scottish Courage, said: "Both breweries have been operating below industry standards of capacity and efficiency.  By joining forces, Scottish Courage and The Federation are able to preserve a home on Tyneside for the continuation of two long and enduring brewing traditions."

Scottish Courage said the new combined brewing business will employ 170 people. However, Tyne currently employs 150 people and the Federation brewery 130.