Whitbread set to buy Allied Domecq
Company must sell brewery business to complete deal
May 25, 1999 - Drinks and leisure group Whitbread has agreed to buy Allied Domecq United Kingdom-based pub operations in a stock deal worth about 2.4 billion pounds ($3.8 billion).
The acquisition includes around 3,500 pubs and restaurants, Allied's 50 percent stake in joint venture First Quench and its 25 percent stake in Britannia soft drinks. The deal, should it go through, would nearly double the number of pubs owned by Whitbread to more than 6,000, making it the largest operator of pubs in the country.
However, the company would have to sell its brewery business to comply with U.K. regulations that block brewers from owning more than 5,000 pubs. Whitbread brews some of the country's best-known beers, including Heineken and Stella Artois. It has a market share of about 15.5 percent.
The sale would allow Allied Domecq to unload its troublesome pubs business and focus on its spirits operations.
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