UK Regulator To Investigate Heineken's $380M Pubs Buy

Heineken's £403m takeover of Punch Taverns faces competition probe

The Competition and Markets Authority (CMA) has launched an investigation into Heineken's proposed acquisition of part of the Punch Taverns pubs portfolio.

The Competition and Markets Authority's probe comes just under a week after Heineken, working with private-equity firm Patron Capital Advisers, won shareholder approval to buy Punch Taverns.

The proposed deal, which will see Heineken become the third largest pub operator in the United Kingdom (behind Greene King and Enterprise) has faced considerable scrutiny from within the sector.

The Punch Tenant Network, which represents the United Kingdom firm's publicans, criticised the deal last month, saying it will reduce beer and cider options for customers.

The CMA said it was "considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation" and if so, "whether the creation of that situation may be expected to result, in a substantial lessening of competition".

The UK watchdog will consider whether the deal would reduce competition and choice for customers and whether it needs to launch an in-depth investigation into the takeover. We know from both Heineken's words and actions that they will give preference to their own products across their estate, and this is simply not fair for brewers, publicans or consumers.

Heineken-owned brands now make up around 85% of what is on offer in the brewer's Star Pubs & Bars division.

A Heineken spokesman said the CMA's call for comments on the planned takeover was an "important and fully expected stage in the process to finalise our acquisition", adding: "Heineken will be fully co-operating with the CMA".

It said volatility in global currency markets - particularly the Mexican peso, the Nigerian naira and the British pound - had cost it about £976m, and the firm expects to be a further £30m out of pocket in 2017.

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