A statement was issued today by Mrs. Margaret Beckett, the UK President of the Board of Trade, regarding an agreement between Carlsberg A/S and Bass PLC to merge the two British brewing groups Bass Brewers Limited and Carlsberg-Tetley PLC, which was announced to the Copenhagen Stock Exchange on 25 August 1996.
Mr. Ian Lang, former UK President of the Board of Trade, stated on 9 December 1996 that the merger could not be approved without further investigations and would therefore be referred to the Monopolies and Mergers Commission (MMC).
Mrs. Beckett has today announced that the proposed merger between Bass Brewers and Carlsberg-Tetley will not be allowed to go ahead.
When the proposed merger was agreed between Bass PLC and Carlsberg A/S, various agreements were entered into to take effect, subject to regulatory approval, in case the merger could not be approved. Hence, it is anticipated that the 50 per cent interest held by Bass PLC in Carlsberg-Tetley and the UK beer brands of the company will be taken over by Carlsberg A/S for GBP 110 million.
Mr. Michael C. Iuul, Managing Director and CEO of Carlsberg International A/S has the following comment:
"Obviously, we are disappointed with the decision announced by the UK President of the Board of Trade. We had hoped to merge Carlsberg-Tetley into an even larger and more efficient brewing group and we are convinced that this would have been the best solution for the company. However, we have known all along that the British brewing industry is being closely monitored by the competition authorities and we have therefore in the past year been contemplating a number of efficiency measures within Carlsberg-Tetley in the event the merger would be blocked. During our merger talks with Bass, we identified a variety of savings, some of which we will be able to implement without the participation of Bass. The fundamental structural reorganisation to be implemented in Carlsberg-Tetley within the next few years will obviously involve expenses for the company. However, it should be taken into consideration that Carlsberg will be taking over a 50 per cent interest in the company for GBP 110 million, which is substantially below the market value."