Carlsberg, Heineken agree $15.3 billion S&N deal

By David Jones

LONDON (Reuters) - Carlsberg and Heineken on Friday finally agreed a cash bid of 7.8 billion pounds ($15.3 billion) to buy and break up Scottish and Newcastle (S&N) to boost the Danish brewer's position in Russia and the Dutch group's presence in western Europe.

Carlsberg and Heineken said they had agreed a deal at 800 pence a S&N share which was recommended by the board of Britain's biggest brewer and the world's sixth-largest beermaker after a three-month takeover saga.

Analysts said the long-awaited deal would be positive for both the bidders as they moved to split up the brewer of Foster's, Kronenbourg and Newcastle Brown Ale. Carlsberg and Heineken are splitting the costs of the deal 54-46 percent.

The deal comes as brewers look to cut costs as input prices for malting barley and aluminum cans have risen and to create a bigger platform for their top brands. It also puts pressure on other brewers such as Molson Coors and Foster's to perform better or look for similar deals, analysts said.

S&N shares rose 2.2 percent to 783p by 1050 GMT while Carlsberg dipped 4.8 percent to 531 crowns and Heineken was 0.5 percent ahead at 40.58 euros.

"Given the compelling strategic rationale, we see the deal as a good one for Carlsberg," said Cazenove analyst Matthew Webb, who added that the deal would also enhance Heineken's earnings in the medium term.

S&N and Carlsberg have agreed to release projected information for their 50-50 Russia-based joint venture Baltic Beverages Holding (BBH) for 2008 to 2010, which had been a sticking point in the takeover fight.

"The deal appears to be a good one for (S&N) shareholders, and we expect it to proceed, with completion during Q2 2008," said Charles Stanley analyst Sam Hart.