Carlsberg, Heineken to Buy S&N?

Brewers in talks to make a run at brewer.

Carlsberg and Heineken are discussing forming a consortium to take out the U.K. brewer Scottish & Newcastle plc, the companies confirmed.

From a joint release:

"Carlsberg A/S and Heineken N.V. confirm that they are in discussions regarding the formation of a consortium to make an offer for the entire issued share capital of Scottish & Newcastle plc. An offer, if made, is likely to be in cash. It is currently intended that Carlsberg will ultimately acquire Scottish & Newcastle plc's interest in BBH, France and Greece and that Heineken will ultimately assume control of Scottish & Newcastle's business in the UK and other European markets."

S&N, however, calls the bid “unwelcome,” according to a report in Bloomberg. It said it’s ``confident in its future as an independent group'' and ``strongly urges shareholders to take no action.''

A British analyst quoted by Bloomberg says the deal is driven partly by Carlsberg’s desire to take control of BBH, its Russian venture with S&N.

From the Bloomberg report.

``Carlsberg is desperate to get its hands on BBH and control over the biggest-growth part of its business, which has been half-owned,'' said Bruce Davidson of Blue Oar Securities in London, who has a ``sell'' rating on Scottish & Newcastle. ``The driving force is the need to get into emerging markets.''

The Bloomberg report can be seen here.

The Carlsberg/Heineken release can be seen here.