Fuller has sold its vast beer, cider, soft drinks and distribution business to Japanese producer Asahi for £250m, as the pub operator ends its 174-year role as a brewer.
Shares in the pub giant jumped more than 20 per cent on news of the surprise deal, which includes the sale of iconic brand London Pride.
Fuller’s chief executive Simon Emeny told City AM that the board became aware of the “strategic challenges in what has been a significantly changing beer market”, adding that the business "needed to be owned by a bigger player to reach its full potential”.
Emeny added: "We could see the challenges going forward for the business and we recognised this would give both sides a chance to flourish - it is a monumental day for the company."
“Whilst losing an iconic brewer is maybe a blow to London pride, investors are raising a glass – shares jumped more than 20 per cent on the news, with investors set for a bumper return of up to £69m,” said Neil Wilson, chief market analyst at Markets.com.
Wilson added: “For Fuller’s it allows it to focus on the pubs and hotels business, where the vast bulk (87 per cent) of operating profits come from. In addition the cash proceeds will enable investment in these brands and properties, whilst it also retains a long-term association with its iconic beers through a strategic alliance with Asahi. Punters won’t notice much difference at the bar. Pubs may be closing at a hell of a clip these days but consumers still want experiences and dining out is one of those. Therefore investing in pubs and hotels is essential as consumers demand more from their pub experience.”
Huge surprise from Fuller's which has announced that Asahi Europe has entered into an agreement to acquire its entire beer, cider, soft drinks and distribution business for £250m. Like the ravens leaving the Tower of London— Dominic Walsh (@walshdominic) January 25, 2019
Hector Gorosabel, chief executive at Asahi Europe said: “Asahi Europe has already established a leading presence in the premium beer category. Welcoming these brands and operations to our business will further consolidate that position, enabling us to even better serve our customers and consumers.”