FDBusiness.com

Heineken has acquired the Galaxy Pub Estate in the UK from The Royal Bank of Scotland for £412 million (€480 million) on a cash-and-debt-free basis. A further £10 million has been paid to settle accrued amounts owed under an existing management agreement between RBS and Heineken.

Galaxy consists of 918 largely freehold pubs and has been managed by Scottish & Newcastle Pub Company, a Heineken subsidiary, since 1999 on behalf of RBS. Galaxy will be combined with Heineken UK’s existing portfolio of 462 outlets. Following this acquisition, Heineken will become one of the leading pub owners and operators in the UK. Heineken expects the acquisition to be earnings accretive from December 2011 and value enhancing in the first year after completion.

Didier Debrosse, regional president Western Europe for Heineken, comments: “The acquisition of Galaxy is consistent with our strategy of driving future value growth in Europe and represents another step in the successful turnaround of our UK business. Our ownership of this estate strengthens our leading position in the UK beer and cider market, particularly in the valuable on-trade channel.”

Stefan Orlowski, managing director of Heineken UK, adds: “There continues to be an important role for the great British pub in the UK on-trade, and this acquisition is a significant vote of confidence in the channel. Owning the Galaxy freehold will allow us to continue the successful transformation of our pub business, concentrate on operational excellence and deliver long-term value from a high-quality, well invested pub estate.”