Heineken will soon be operating the UK´s third-largest pub chain after the competition regulator approved a deal for it to acquire Punch-branded pubs.
The Competition and Markets Authority (CMA) ruled that Heineken´s offer to sell a number of pubs across 33 separate areas was enough to allay earlier concerns over the deal.
At the end of last year, private equity firm Patron Capital Advisers agreed to purchase Punch Taverns through Vine Acquisitions, with Heineken lined up to acquire the majority of the Punch pubs.
The deal valued Punch Taverns at a total of £403m. Heineken was to pay £305m to buy around 1,900 of the Punch-branded pubs, adding to the 1,100 UK pubs that it already owns.
It makes Heineken the UK´s third-largest pub operator, behind Greene King and Enterprise Inns.
However, in June the CMA issued a statement to the effect that it believed Heineken's acquisition of the Punch pubs could potentially lower competition in 33 local areas.
Today, the competition regulator announced that it was satisfied proposals received from Heineken had addressed earlier concerns.
“Heineken has offered to sell pubs in each of the affected areas to preserve competition and ensure customers in these locations do not lose out,” said the CMA in a statement.
The regulator added that it had therefore decided the deal would not need to be referred for an in-depth phase 2 competition probe.
In June, the CMA said it had identified 33 local areas where Heineken-Punch pubs would not face sufficient competition after the merger, warning of the potential for “price increases or a deterioration in the quality of the service on offer”.
The CMA, however, had previously rejected claims that the deal could close off an important distribution channel for brewers which compete with Heineken. It said the pubs being purchased by Heineken represented just 4% of the British market.