UK: S&N to sell French on-trade distribution
Scottish & Newcastle has reached an agreement with a wholesaler to sell a large proportion of its on-trade distribution businesses in France.
While announcing its third quarter figures today (20 November), S&N unveiled that it has made a GBP85m (US$175m) deal with Centrale Européenne de Distribution that will see it "become a major force in on-trade distribution".
The company said that Brasseries Kronenbourg will have a "forward agreement" with the French wholesaler in an effort to strengthen brands such as Kronenbourg Red & White, 1664 and Grimbergen as well as improve its route to market in the French on-trade.
In a statement, the company said that the deal will have an immediate positive impact on S&N in terms of both profitability and cash flow. It added that under IAS the business will be classified as discontinued. Meanwhile, the trading loss for the year, which is anticipated to be around £12m, will be reported outside of operating profit and the post tax earnings will be excluded from normalised earnings.
The transaction will result in a loss on disposal of around £370m, the majority of which is goodwill on acquisition.
Despite contracts having been agreed, the sale will be subject to finalisation procedures such as employee consultation and French anti-trust clearance.
Completion of the deal is anticipated to take place during the first quarter of next year.
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