According to chartered accountancy firm Gerald Edelman, there have been more than 180 mergers and acquisitions in the UK pub sector since the start of 2018 – an unprecedented level of activity.
What’s more, research by The Morning Advertiser (MA) also found that three of the UK’s biggest pub companies – Star Pubs and Bars, Ei Group, and Greene King – have collectively invested more than half a billion pounds in their pub estates since 2017.
With two of the largest deals from a frenzied period of wheeling and dealing taking place in the past 12 months, we look back at the biggest acquisitions of 2019.
Asahi buys Fuller’s beer arm
Announced in January, the sale of Fuller, Smith & Turner’s cider, soft drinks, wine wholesaling and distribution business, as well as its beer and brewing operations, to Asahi Europe Limited set the tone for what would be a busy year of mergers and acquisitions in the pub and beer sectors.
The £250m deal – from which Fuller’s made a profit of £164.5m according to its financial results for the 26 weeks ended 28 September 2019 – wasn’t the west London-based operator’s only piece of business in 2019 as it announced a £40m grab for Cotswold Inns & Hotels in October.
The acquisition, which included seven freehold country inns and hotels alongside eight staff cottages, saw Fuller’s add 201 bedrooms to its pub estate estate, taking it to more than 1,000 rooms by the end of 2019.
However, while the sale of Fuller’s beer arm to Asahi stole the headlines in January, it wasn’t the first deal in the pub and beer sector to be rubber stamped in 2019.
As reported by MA on 2 January, North Yorkshire-based Black Sheep Brewery acquired operator and brewer York Brewery for an undisclosed sum after the latter entered administration on 13 December 2018.
Black Sheep acquired the £21m-turnover York Brewery and brands as well as four outlets in the business as part of the deal.
What’s more, capping off a month of frantic January sales, the operator behind 15 sites across London, the Home Counties and the south-west, Redcomb Pubs, was sold to Young’s for £34m, while Stonegate Pub Company announced the acquisition of Bar Fever Ltd (Fever Bars) and six sites from Novus Leisure – both for undisclosed sums.
Magic Rock, Aprirose and Oakman
In March, Australian-based food and beverage behemoth Lion Global Markets acquired 100% of Yorkshire craft brewer Magic Rock Brewing, with the operator of Australian Breweries James Boag and XXXX Castlemaine Perkins, pledging to offer Magic Rock the financial and strategic support to fuel further growth of its business, brand and hospitality experience.
A matter of weeks later, real estate investment company Aprirose acquired Spirit Pub Company’s branded pub portfolio from British Land for approximately £130m.
The deal, announced on 1 April, saw Aprirose increase its existing portfolio of leased and managed pubs to just under 200 sites following the purchase of Spirit’s 45-asset portfolio from the FTSE-100 property company.
Multiple operator Oakman Inns also completed the acquisition of seven freehold pubs with combined earnings before interest, taxation, depreciation and amortisation (EBITDA) of £2.8m on 30 April.
There’s been a merger!
Summer 2019 saw the first of two of the largest pub sector deals in recent history, let alone 2019.
It was revealed on 18 July that Stonegate Pub Company had agreed to buy pubco Ei Group for £1.27bn – a move which will eventually see the operator’s estate rise by around 4,000 sites, making Stonegate the UK’s largest pub owner.
As reported by MA, the Ei Group shareholders gave the company’s acquisition by Stonegate Pub Company near unanimous approval on 12 September, with the Competition and Markets Authority stating on 9 December that it would clear the acquisition if “local concerns” were overcome after it concluded that the takeover did not raise national competition concerns.
Elsewhere, national pub group Red Oak Taverns concluded an eventful summer with the purchase of 18 leased and tenanted pubs from Wadworth for an undisclosed sum.
Greene King sold
There was no let up from the sector’s wheeling and dealing in Autumn as a £2.7bn deal for Greene King to be taken on by Hong Kong company CK Bidco was concluded on 31 October.
The deal, deemed ‘concerning for Britain’s beer scene’ by some commentators from the pub and beer sectors, was accompanied by assurances from Greene King that it would continue to maintain its name and existing support centres in Bury and Burton, and planned to invest in the business.
What’s more, a frantic end to the year saw Admiral Taverns complete deals for large pub packages from both Star Pubs & Bars and Marston’s.
In late October, Admiral announced that it had purchased 150 tenanted community sites from Star Pubs & Bars – increasing its portfolio of wet-led venues across England, Scotland and Wales from 800 to 950 pubs.
However, the Chester-based operator’s portfolio would pass the 1,000 pub mark before the end of the year with the £44.9m purchase of 137 pubs from brewer and operator Marston’s in early November.
Hawthorn, Camerons and Robinsons
As we entered final month of the year there was still time for more deals to be made.
On 3 December, MA reported that Hawthorn Leisure had bolstered its managed estate after its owner – NewRiver REIT – acquired community pub company Bravo Inns Limited for £17.9m.
In addition, North-east-based brewer and pub operator Camerons Brewery announced the acquisition of the five-venue Bar Soba group for an undisclosed sum on 12 November. The deal will see Camerons add Bar Soba’s sites - three in Glasgow, one in Edinburgh and one in Leeds - to increase its managed pub estate to 34 venues with the help of HSBC, which financed the acquisition.
Elsewhere, Cheshire-based Robinsons Brewery announced the acquisition of Individual Inns - comprises six sites – as the brewer and operator grew its managed estate to 20 pubs and made its first inroads in the Yorkshire on-trade.