Greene King eyes building best pubs and beer business in the UK

Greene King chief executive Rooney Anand

Greene King chief executive Rooney Anand - Credit: Archant

Greene King's plans for its £774m acquisition of Spirit Pub Company will be under the spotlight when it presents its half-year results on Thursday.

Greene King's plans for its £774m acquisition of Spirit Pub Company will be under the spotlight when it presents its half-year results on Thursday.

The deal agreed earlier this month will create a firm with more than 3,000 managed and leased pubs under brands such as Fayre & Square, Flaming Grill, Hungry Horse and Loch Fyne.

Greene King chief executive Rooney Anand said the acquisition was a key step towards building the 'best pubs and beer business' in the UK.

The takeover allows Bury St Edmunds-based Greene King, which dates back to 1799 and has around 1,900 outlets, to shift the balance of its estate towards more profitable outlets it manages rather than tenanted operations.


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The EDP Top 100 firm is particularly keen to benefit from Spirit's exposure in London and the South East, adding that the deal will be earnings enhancing in two years.

The Irish maker of Magners cider C&C launched a rival bid for Spirit, but saw its October offer rejected by the board of the Burton-on-Trent-based firm.

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The merger is expected to generate £30m a year of cost savings from areas such as overlapping corporate and support functions, although Greene King said it has not yet developed proposals on headcount reductions.

Investors will also want Greene King's guidance on the vote by MPs earlier this month to unwind the tied link between landlords and pub chains.

The reaction to the vote sent shares in pub companies down by as much as 17pc the following day. The amendment could affect the 20,800 of Britain's 48,000 pubs that are subject to beer ties.

Tenants of tied pubs pay lower rents than non-tied pubs, but higher prices for their beer and other drinks.

In July the EDP Top100 company served up its fifth year in a row of record results with annual underlying profits lifting 7.4pc to £173.1m.

Mr Anand said: 'There are now clear signs that both the UK economic outlook and consumer confidence are improving, although consumers continue to spend cautiously.'

Greene King's full-year profit for the current year is expected to be up by another 1.7pc to £176m.

Have you got a business story for the EDP? Email business editor Ben Woods at ben.woods@archant.co.uk

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