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Greene King to follow Fuller's in UK brewing exit? - analyst

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Greene King could be the next UK pub estate to offload its brewery operations, with Heineken or Anheuser-Busch InBev a potential buyer, an analyst has forecast.

Greene King owns in the region of 2,900 pubs, restaurants and hotels in the UK

Greene King owns in the region of 2,900 pubs, restaurants and hotels in the UK

In January, Japan's Asahi purchased the beer business of London brewer and pub chain Fuller's. In a note to clients, Bernstein analyst Trevor Stirling has predicted further consolidation ahead if Greene King also looks to exit brewing.

A potential motivation for Greene King to sell is the outstanding debt on its 2015 purchase of rival chain Spirit Pub Co, Stirling said in a note today. A divestment would also help the company focus on its portfolio of around 2,900 pubs, restaurants and hotels as brewing operations only account for 15% of EBIT, according to Stirling.

The analyst suggested potential buyers could come from the major brewers in the UK, including Heineken, A-B InBev, Molson Coors and Carlsberg.

Meanwhile, Stirling marked Edinburgh's Innis & Gunn as a potential takeover target for larger UK brewers following a spate of acquisitions of other craft outfits. In recent years, Heineken has bought stakes in London's Beavertown and Brixton breweries, Carlsberg purchased London Fields and A-B InBev snapped up Camden Town Brewery

Highlighting another Scottish craft brewer, Stirling said BrewDog is "very unlikely" to be sold to a major brewer because of the "owners' rhetoric". In the past, BrewDog has shown little interest in selling to an international name. When asked once if he'd sell to a big brewery, BrewDog co-founder James Watt said: "I'd rather shoot myself in the head."

Shrinking margins for UK craft brewers could herald M&A race - research


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