Express & Star

End of an era for Black Country brewing as Marston's sells up for £206m

Marston’s has sold its 40 per cent stake in a brewing joint venture for £206 million.

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The group, which has its headquarters at St John's House in Wolverhampton, will now focus entirely on operating pubs.

It ends almost 200 years of brewing heritage, with Banks and Company first starting beer-making at Park Brewery, Wolverhampton in 1875.

Carlsberg Marston's Brewing Company was created in November 2020 and has its headquarters at Marston's House, Brewery Road in the city.

The stake has been bought by a subsidiary of Carlsberg in cash. Completion is aimed for the end of September.

The board of Marston's has unanimously approved the sale.

CMBC was set up to combine the drink portfolios and extensive distribution network of Marston’s and Carlsberg in a £780m merger.

Chief executive Justin Platt

Justin Platt, the new chief executive of Marston's, said: “Today’s announcement represents a significant milestone for Marston’s as we realise our stake in CMBC. In my first six months with the business, it has become very clear to me that our core capability and key opportunity to unlock value for shareholders is in driving a focused and successful pub business.

“This deal further strengthens our balance sheet, significantly reducing our debt by over £200 million. In addition, CMBC remain valued strategic partners and we continue to benefit from our ongoing long-term brand distribution agreement with them. Crucially, it allows us to become a pure play hospitality business and focus on what we do best – namely, giving our guests amazing pub experiences. I look forward to delivering on the opportunities a focused pub business will provide to ensure we maximise value for our shareholders.”

Marston’s, which has around 1,370 pubs, will retain a long-term brand distribution agreement with CMBC as a key supplier and strategic partner.

The full exit from CMBC will create a pure play hospitality business focused on pubs whilst retaining the benefits of a long-term brand distribution agreement with CMBC as a key supplier and strategic partner.

The Marston's board of directors believe that the value to be achieved by the sale represents an attractive result for Marston’s shareholders with the Marston’s Group’s interest expense to reduce by around £18m annually.

CMBC has been challenged by a number of unforeseen macro and socio-economic factors, including Covid-19, higher operating costs and inflation.

It was recently revealed that the licensed production and distribution agreement for San Miguel with CMBC in the UK will not be renewed beyond the end of this year.

In the initial formation of CMBC, Marston’s received proceeds of £267m

Marston’s has received an incremental £54.8m of dividends from CMBC since 2020.

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