Heineken buys back pub business from RBS

Heineken has bought the Royal Bank of Scotland Group’s Galaxy Pub Estate.

The Dutch brewer paid over £412 million in cash for the tenanted pub business, which adds to the company’s UK assets and helps RBS’s plans to divest itself of its non-core assets.

A further £10m was paid by the brewer to terminate the existing management agreement with the bank.

The deal, involving 918 pubs, brings Heineken’s total outlets in the UK to 1,380 and ends RBS’s role as one of the country’s largest pub landlords.

One of the pubs to be exchanged in the deal was The Punch Bowl in Mayfair, which is leased to film director Guy Ritchie.

The pubs have been part of RBS’s portfolio since 1999, when they were bought from Scottish & Newcastle for a reported £450m.

In 2008 S&N was bought by Heineken and it is to this wing that the pubs have returned, with RBS apparently accepting a loss of around £28m, which it described as a “good result in a difficult market”.

Heineken now operates in the same league as other pub groups such as Mitchells & Butlers, which owns some 1,600 pubs around the UK.

In a statement, Heineken’s UK managing director, Stefan Orlowski, described the sale as a “significant vote of confidence” in the UK pub industry.