By Adriano Marchese
Marston's PLC said Friday that it has formed a joint venture with Carlsberg UK Holdings Ltd. to create the Carlsberg Marston's Brewing Company, a new U.K. brewer and distribution company.
The British pub operator said its stake in the newly formed joint venture is 40%, and it will receive a cash equalization payment of up to 273 million pounds ($333.5 million). It said it will focus on its pub and accommodation business, while retaining its 40% interest in a "larger, more attractive" brewing business. Meanwhile, Carlsberg UK, a division of Danish brewer Carlsberg A/S, has the remaining 60% stake in the newly formed company.
Marston's said the cash equalization payment will materially reduce debt outside the securitization and provide additional financial flexibility.
The joint venture is expected to achieve reported annual cost synergies of around GBP24 million by the end of the third year following completion. It expects the joint venture will generate material additional revenue synergies as well, it said.
The transaction is set for completion in the third quarter of 2020. The company said the joint venture values Marston's brewing business at up to GBP580 million and the Carlsberg U.K. brewing business at GBP200 million.
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