U.K. Asks Heineken to Address Competition Concerns in Buying Pubs From Punch
Heineken Holding N.V.'s (HEIO.AE) 305 million pound ($386.5 million) purchase of 1,900 pubs in Britain from Punch Taverns PLC (PUB.LN) could reduce competition in 33 places, hence the need for the Dutch brewer to provide a remedy, the U.K. Competition and Markets Authority said Tuesday
Heineken has until June 20 to offer proposals or face an in-depth investigation into the merger, the U.K. regulator said.
Heineken and Punch announced last December that the brewer would buy a group of pubs--known as the Punch A segment--and some others immediately after the completion of private-equity company Patron Capital Advisers LLP's own purchase of Punch. Punch's pubs have been divided into A and B segments, with the first made up of around 2,000 pubs and Punch B holding more than 1,000.
Andrea Coscelli, CMA acting chief executive and decision-maker in the case, said: "The companies will own less than 10% 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."
"Without sufficient competition from rivals, pubs in these areas might be able to raise prices or worsen the service they offer customers," he added.
Punch Tavern said the companies are putting proposals to the CMA to address the points it has raised, and are confident that they will satisfy competition concerns.
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(END) Dow Jones Newswires
June 13, 2017 02:54 ET (06:54 GMT)