Monday 16 September 2019

Hong Kong investor buys UK's Greene King brewery for €2.95bn

Businessman Li Ka Shing
Businessman Li Ka Shing

Thomas Buckley

An investment group backed by Hong Kong billionaire Li Ka-shing has agreed to buy UK brewery and pub chain Greene King for £2.7bn (€2.95bn).

The offer by CK Asset Holdings is equal to 850 pence a share, a premium of about 51pc to Greene King's closing price on Friday. The British company's shares surged on Monday to a high of 865.8 pence.

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The deal is the latest in a series of acquisitions of British pub operators. Private equity firm TDR Capital, whose pubs include the Slug & Lettuce, Yates and Walkabout chains, in July agreed to buy the UK's EI Group Plc for about £1.3bn.

The move by Li, whose interests range from telecommunications to real estate, comes amid a decline in the pub trade with hostelries shutting down across the UK.

The business is facing growing challenges including a decline in beer drinking among younger consumers and the rise of alternatives for a night out - cash-strapped millennials more inclined to entertain at home.

Prior to news of the takeover, Greene King had lost more than a third of its value over the past four years. About a quarter of UK pubs have closed down over the past two decades, according to the Office for National Statistics.

The sector remains profitable and cash flow-generating, and will continue to be an important part of British culture, CK Asset Holdings said in a statement. The company also declared its confidence in Greene King's established position as well as its attractive real estate assets and resilient financial profile.

The CK deal follows the sale by Anheuser-Busch InBev NV of its Australian beer assets to Asahi Group Holdings Ltd. in a deal valued at about $11 billion. The Japanese company also recently acquired the beer business of Fuller, Smith & Turner Plc.

Bloomberg

Irish Independent

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