CMA approves £1.2bn Stonegate pub merger deal
The owner of Slug & Lettuce has today been cleared to takeover Ei Group in a move that would make it the UK’s largest pub company.
Last year the Competition and Markets Authority (CMA) launched a probe into Stonegate’s £1.2bn deal to buy Ei’s assets over fears that it could damage competition in 51 local areas.
However, the CMA said this morning that it had accepted Stonegate’s undertakings over its concerns and that the probe would not become a full-scale investigation.
Sign up to City PM’s Midday Update newsletter, delivered to your inbox every lunchtime
Stonegate, which also owns pub chains Walkabout and Yates, in July offered 285p in cash for each Ei share, representing a premium of almost 40 per cent on its share price at the time.
The offer values Ei, which owns more than 4,000 pubs across the UK, at £2.97bn including debt.
The merger is the second large pub deal in recent months, after pub and brewery chain Greene King agreed a £2.7bn takeover deal with Hong Kong’s CK Asset Holdings in August.
Publicans across the UK are facing a squeeze from lower consumer spending and increased costs from rising rates and wages, and Ei chairman Roberty Walker has previously described the benefits of combining the two firms as “compelling”.