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Heineken (AMS:HEIA) has been given the go-ahead for takeover with Punch Taverns (LON:PUB).
Following investigations by the Competition and Markets Authority (CMA), it has been decided the deal is able to go forward.
Previous concerns by the CMA included lack of competition “which could lead to price increases or a deterioration in the quality of the service on offer”.
“We have listened very carefully to a range of concerns about this merger. The companies will own less than 10 per cent of all British pubs after any deal, but we are concerned about the loss of competition for pub goers in a number of local areas,” said CMA acting chief executive.
“Without sufficient competition from rivals, pubs in these areas might be able to raise prices or worsen the service they offer customers.”
After initial investigations, the CMA has announced that previous concerns have been resolved.
“Heineken has offered to sell pubs in each of the affected areas to preserve competition and ensure customers in these locations do not lose out,” said the CMA.
“Before reaching a final decision, the CMA carefully assessed and consulted publicly on these proposed undertakings. The CMA is satisfied that its concerns have been addressed and has therefore decided that the merger will not be referred for an in-depth phase 2 investigation,”
The CMA’s investigation concluded that Heineken’s purchase of Punch Taverns would not affect competition with other brands – the pubs being bought make-up four percent of the market.
“We welcome confirmation from the CMA that only a small number of pubs are required to be sold. It’s a sensible outcome and good news for pub-goers across the UK who will see the benefit of well-invested pubs in their communities.” said a spokesperson for Heineken.
Heineken will buy 1,895 Punch Taverns. The remaining 1,329 pubs will be bought by Private equity firm Patron Capital.