Marston’s acquires Charles Wells brewing business for £55 million

Claire Dodd

Claire Dodd

18 May 2017

Wolverhampton-based brewer and pub operator, Marston’s has acquired the beer and brewing business of Charles Wells for £55 million, plus working capital adjustments.

The Bedfordshire-based Charles Wells will retain its pub operating arm, describing the sale as a strategic 're-balancing' of its operations. It will now focus on its retail operations, which includes over 200 pubs.

Meanwhile Marston’s said the deal will allow the company to extend its trading area in the South of England and Scotland. It will also take on the distribution of brands including of Estrella Damm, Erdinger and Kirin, after inheriting trading agreements from Charles Wells. The Charles Wells portfolio itself includes over 30 beers, including Bombardier, Young’s and McEwan’s.

Justin Phillimore, CEO of Charles Wells Brewery, said: 'We are delighted to have reached an agreement with Marston’s to acquire our brewery and become a close trading partner. After a detailed review of our strategy we had decided to re-balance the company more towards retail investment and that meant finding a partner we could work with for the future. There are opportunities for both companies in this deal and we look forward to bringing them to life.'

Marston’s said the deal also extends its 'number one' position in the premium bottled ale and cask ale markets, as well as enhancing its share of the premium canned market. This is Marston’s second major acquisition in recent years, following the purchase of the Thwaites beer business in 2015 for £25 million.

Expected synergies from the deal are believed to be around £4 million by the 2019 financial year, while return on invested capital (ROIC) is expected to exceed 18% in third full year.

Ralph Findlay, CEO of Marston’s PLC, said: 'The acquisition of Charles Wells Brewing and Beer Business builds on Marston’s established brewing prowess and is a further step in our objective to develop the leading premium beer business in the UK market.

'We have demonstrated our ability to acquire, integrate and develop beer brands evidenced by the success of brands such as Hobgoblin, Wainwright, and Lancaster Bomber. We have also achieved success with international licensed brands including Shipyard, now the second biggest craft beer in the UK on trade.

'We also aim to develop further our range of international licensed brands, and look forward to working with our new overseas partners, including Estrella Damm, Erdinger and Kirin.'

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