LONDON (Alliance News) - Greene King PLC Friday said it has exchanged contracts to sell 16 pubs which will allow the company to complete its takeover of Spirit Pub Co PLC following a ruling by the Competition and Markets Authority, the anti-trust regulator in the UK.
The regulator said Greene King had to sell 16 of its pubs over competition concerns before the company can complete its takeover of Spirit Pub. On Friday, Greene King said it has exchanged contracts to sell the pubs and the deal should be completed sometime in October, it said.
"We have exchanged contracts with buyers for the 16 pubs we were required to sell by the CMA. We are therefore close to completing the remedial actions required of us to receive unconditional CMA approval for the acquisition of Spirit Pub Company," said Chief Executive Rooney Anand.
Once those pubs have been sold, there will be no further obligations for Greene King to satisfy before it can complete the takeover of Spirit Pubs.
"Although the CMA process was intensive, we reached a sensible conclusion. The fact that we only had to dispose of 16 pubs, out of a combined total of 3,100, highlights the compelling strategic rationale for the deal, thus avoiding unwanted business distraction and minimising the lost profit from any disposals," said Anand.
Greene King will provide an update on the integration of the two businesses in December when it releases its interim results.
Greene King agreed to acquire Spirit Pub in a GBP773.6 million deal that values Spirit shares at 115 pence per share last November. Following completion of the deal, Spirit shareholders will own around 28.9% of the combined company, with Greene King shareholders owning the remaining 71.1%.
The number of pubs Greene King has had to sell is significant compred to the CMA's initial investigation, which found that around 1,000 Spirit pubs overlap with a Greene King pub in a local area. At that time however, the CMA said that in the vast majority of those areas, it did not have any competition concerns given the many alternative pubs offering similar eating and drinking options.
Greene King shares were down 0.6% to 816.50 pence per share on Friday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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