FDBusiness.com

London-based Young & Co has exited brewing after selling its 40% shareholding in Wells & Young’s Brewing Company to Charles Wells, the English regional brewer and pub operator, for £15.1m. Young & Co will now focus on its portfolio of managed and tenanted pubs inLondon and the South of England.

Wells & Young’s was formed in 2006 following the merger of Young’s brewing operations with those of Charles Wells, with Charles Wells holding a majority 60% stake.

Young will use the consideration from the transaction to invest in the further development of its Young’s and Geronimo pub estates.

The existing, exclusive three-year rolling supply agreement with Wells & Young’s for the supply of drink to Young’s pub estate has been amended. There are now two agreements: one for beers and ciders, the other for wines and spirits. Both are two-year rolling agreements but Young cannot give notice of termination within the first two years.

The licences granted to Wells & Young’s in 2006 in respect of the Young’s beer brands remain in place and Wells & Young’s is fully committed to developing these brands.

In the 53 weeks to April 4th 2011, Wells & Young’s contributed £2.6m to Young’s total adjusted profit before tax. However, the ongoing profitability of the brewing business will be impacted by the loss of the Corona licence.

“This transaction is mutually beneficial for both Young’s and Charles Wells. Young’s is focused on investing in its premium pub estate whilst Wells & Young’s is looking to invest in developing new and existing beer brands,” comments Young’s chief executive, Stephen Goodyear. “We are pleased to retain good supply agreements and our customers will therefore continue to enjoy their customary array of quality cask ales and lagers throughout our estate.”