Greene King ties up £70m Capital deal

UK brewer Greene King has announced a £70 million deal to buy Capital Pubs.

The move comes as the East Anglian company looks to increase its presence in London ahead of the 2012 Olympics.

The brewer will acquire Capital’s 34 pubs in London, taking its portfolio of pubs in the city to 250.

The deal comes after Capital’s management rebuffed bids from rival brewers Fuller, Smith & Turner last month.

It also represents Greene King’s third acquisition this year, after the purchase of RealPubs and Cloverleaf for a combined £108m.

Greene King chief executive Rooney Anand said: “The proposed acquisition represents another firm step as we continue to expand our presence in London.

“Capital Pubs would bring a further 34 premium pub assets and take our Greater London estate to approximately 250 at a time when London is outperforming the national pub market.

“This offer represents a fair price for a high quality, largely freehold pub estate. Capital Pubs is a premium London pub company that fully meets our criteria as we continue to progress our retail expansion strategy.

“Capital Pubs’ estate fits well within the Greene King portfolio and we intend to combine it with our recently acquired Realpubs business, thereby generating attractive cost and revenue synergies.”

Greene King, which is best known for its Old Speckled Hen and Greene King IPA beers, expects the deal to add its earnings in the first full year of ownership and to generate savings of £2m though reduced overheads and purchasing benefits.

Clive Watson, co-founder and chief executive of Capital Pubs, said: “Greene King is an excellent cultural fit and will be a good home for both the business and our staff.”