Fuller,Smith &Turner - Disposal and Trading Update

Fuller’s announces that it has entered into an agreement for the sale of its entire beer business to Asahi Europe Ltd (“AEL”), a wholly owned subsidiary of Asahi Group Holdings, Ltd (“Asahi”), for an enterprise value of £250 million on a debt free, cash free basis (the “Proposed Disposal”). 

The business being sold comprises the entirety of Fuller’s beer, cider and soft drinks brewing and production, wine wholesaling, as well as the distribution thereof, and also includes the Griffin Brewery, Cornish Orchards, Dark Star Brewing and Nectar Imports (the “Fuller’s Beer Business” or the “Beer Business).

Under the terms of the Proposed Disposal, AEL will acquire the brands of the Beer Business (including “London Pride”) and will receive the benefit of a licence, on a perpetual, global, exclusive and royalty-free basis, to use certain trade marks (including the “Fuller’s” name, logo and cartouche) for the provision of beverages. Ownership of the licensed trade marks will be retained by Fuller’s.

Having carefully considered its options for the Beer Business and Fuller’s existing relationship with Asahi, the Board believes that Asahi is the ideal owner of the Beer Business and will create the right environment for the Beer Business to flourish in the future and protect the Fuller’s brewing heritage. The Board welcomes the fact that Asahi also upholds Fuller’s key values of a genuine commitment to brewing excellence and has a proven track record as a long-term steward of iconic brands making them an ideal strategic partner to the Fuller’s pubs and hotels business in the future.  

Following Completion of the Proposed Disposal, Fuller’s will be a focused, premium pub and hotel operator pursuing its previously stated strategy of running a stylish, high quality estate, with well-located, well-invested, predominantly freehold sites that are maintained to the high standards that customers have come to expect. Fuller’s will form a strategic alliance with Asahi that will ensure continued access to the high quality premium beer brands Fuller’s has always brewed.


  • Sale of the Fuller’s Beer Business for an enterprise value of £250 million, representing a multiple of 23.6x EBITDA (of £10.6 million for the 52 weeks ending 31 March 2018);

  • The price reflects the strategic value of the brands of the Beer Business being acquired, the long-term growth potential of the Beer Business under AEL’s ownership, the value of the Griffin Brewery as well as the expertise and respected industry knowledge of the people employed within the Beer Business;

  • Substantial premium to the value attributable to the Company’s Shareholders if the Beer Business had remained under Fuller’s ownership;

  • A strategic alliance between Fuller’s and Asahi, supported by a Long-Term Supply Agreement, will allow Fuller’s to continue providing a high quality beer and cider offering to its customers;

  • Net cash proceeds of the Proposed Disposal are expected to be approximately £205 million at Completion, taking into account adjustments and after estimated transaction, Reorganisation and separation costs (the “Net Cash Proceeds”);

  • A return of proceeds between £55 million to £69 million of the Net Cash Proceeds is expected to be distributed to Ordinary Shareholders, representing £1.00 to £1.25 per A and C Ordinary Share and £0.10 to £0.125 per B Ordinary Share;

  • The Proposed Disposal is not anticipated to impact the level of dividend payments made by the Company as the Board is intending to declare a final dividend for each class of Ordinary Shares for the financial year ending 31 March 2019 of an amount at least equal to the final dividend from the prior financial year and the Board is expecting to maintain a progressive dividend policy going forward;(1)

  • The Proposed Disposal is conditional upon the passing of two inter-conditional ordinary resolutions approving the Proposed Disposal, completion of the Reorganisation and obtaining a relevant confirmation from the UK Competition and Markets Authority;

  • The Proposed Disposal is expected to complete in the first half of 2019.

  • This statement does not constitute a profit forecast or estimate and should not be interpreted to mean that future earnings per share, profits, margins, and/or cash flow will support such a policy.

The Proposed Disposal will enable Fuller’s management to focus on its pubs and hotels, which is the core of the business and where today 87 per cent of the Fuller’s operating profits are generated (excluding unallocated costs). It will also provide significant capital to accelerate investment in the premium pubs and hotels business both organically and through future acquisitions. The focus of management will remain unchanged, to be a leading operator of stylish pubs and hotels, while driving organic growth through improved marketing and digital communications to grow sales and ensure relevance to today’s consumer, and through developing the people within the business.

As a result of the Proposed Disposal, a strategic alliance will be formed to further strengthen the existing relationship between Fuller’s and Asahi, where AEL acts as a key supplier to Fuller’s pubs and hotels business. A Long-Term Supply Agreement with AEL will ensure Fuller’s will continue to provide the comprehensive high quality beer and cider offering its customers have come to expect. The Board welcomes this strategic alliance with Asahi, a leading global brewer, and envisage that the Proposed Disposal will enhance the ability of management to successfully grow the Fuller’s pubs and hotels business going forward.

In addition to the expected return of proceeds to Ordinary Shareholders, the Board also intends to use some of the Net Cash Proceeds to make a contribution to the Pension Scheme. The remaining funds will be used to grow and further develop Fuller’s pubs and hotels business.

Under the terms of the Proposed Disposal, all responsibilities relating to the Pension Scheme would be retained by Fuller’s.

The Proposed Disposal constitutes a Class 1 transaction under the Listing Rules. Completion is conditional upon, amongst other things, the passing of two inter-conditional ordinary resolutions approving the Proposed Disposal by (i) the A, B and C Ordinary Shareholders (the “Ordinary Shareholder Resolution”) and (ii) the A Ordinary Shareholders (the “A Ordinary Shareholder Resolution”) (together, the “Resolutions”). Accordingly, a circular containing full details of the Proposed Disposal, the Resolutions and eligibility to vote on the Resolutions, the Board’s recommendation and irrevocable undertakings to vote in favour of the Resolutions, and the notice convening an Extraordinary General Meeting at which such approval for the Resolutions will be sought, will be published in due course.

The Company has received irrevocable undertakings from the Directors and certain other Ordinary Shareholders to vote at the Extraordinary General Meeting in favour of the Resolutions in amounts representing (in aggregate): (i) in respect of the A, B and C Ordinary Shareholder Resolution, approximately 28.19 per cent. of the total issued Ordinary Shares of Fuller's as at 24 January 2019 (being the latest practicable date prior to publication of this announcement); and (ii) in respect of the A Ordinary Shareholder Resolution, approximately 5.62 per cent. of the total issued A Ordinary Shares of Fuller's as at 24 January 2019 (being the latest practicable date prior to the publication of this announcement).

Simon Emeny, Chief Executive of Fuller’s, commented:

“This deal secures the future of both parts of our business including protecting the heritage of the Griffin Brewery in Chiswick, which was particularly important to the Fuller’s Board. We remain incredibly proud of the Fuller’s Beer Business, its history and the high quality premium beer and cider portfolio that we have developed. Brewing has formed an integral part of our history and brand identity, however the core of Fuller’s and the driver of our future growth is now our premium pubs and hotels business.”

“I am delighted that this transaction maintains Fuller’s long association with the Beer Business and that we will continue to enjoy a strong relationship with Asahi as a key supplier. We look forward to continuing our alliance and developing a mutually beneficial partnership that will see both businesses flourish in the future. Asahi, as a company recognised for brewing excellence, is an appropriate custodian of our rich brewing history and the Griffin Brewery, and will ensure the Fuller’s Beer Business brands will reach an even wider global audience.”

Akiyoshi Koji, CEO of Asahi Group Holdings, Ltd, commented:

“We have long admired the brewing business and exceptional beer brands that Fuller’s has built over the years and the high degree of respect it commands throughout the global beer industry. Fuller’s is one of the few brewers that show the same genuine commitment to brewing excellence and quality that we do. We strongly believe that the brands of the Beer Business, including London Pride, Frontier and Cornish Orchards among others, complement our premium portfolio in the UK market. In particular, London Pride is a fantastic brand with an illustrious heritage dating back to the 1950s and we are excited about its untapped international potential which Asahi has the scale and global network to unlock.”

Rothschild & Co is acting as sponsor and sole financial advisor to Fuller’s on the Proposed Disposal.

There will be a conference call for sellside analysts and investors at 0800 hours (GMT) today.  Please contact Tom Berger at Instinctif Partners on 020 7457 2834 or tom.berger@instinctif.com for dial-in details.

An accompanying slide presentation to the conference call will be available from 0750hours (GMT) at:



The Company also announces today its trading update for the 42 weeks to 19 January 2019.

The Company has delivered a very strong performance since it last reported, especially in its Managed Pubs and Hotels where like for like sales have risen 5.6 per cent in the last 10 weeks. For the 42 week period, like for like sales in Managed Pubs and Hotels have risen 4.7 per cent, like for like profits in Tenanted Inns have risen 2 per cent and total beer and cider volumes in The Fuller’s Beer Company have remained level.

Simon Emeny, Chief Executive, said: “This is a very good set of figures and I’m particularly pleased with the way our Managed Pubs and Hotels performed over the important five week Christmas and New Year trading period. Like for like sales for December rose 8.7 per cent and our pre-booked covers rose by 16 per cent.

“Since we last reported, we have opened our latest transport hub site, The Signal Box at Euston, which is proving very popular and have refurbished The Blackbird at Earl’s Court, including developing nine new boutique bedrooms. We are on site at The Hercules in Lambeth, which will open before the year end, and in the next few weeks we will open 15 stylish new bedrooms at The Counting House in Cornhill, a large freehold site in the heart of the City of London. We have also transferred another six tenancies to our turnover agreement.

“As has been widely commented, we are in an uncertain and challenging consumer environment. However, Fuller’s has well-invested premium pubs and an excellent team of people, underpinned by a long-term vision and a clear, well-executed strategy that is proven to grow sales, attract new customers and deliver returns for our Shareholders.

“We will next update the market on 7 June 2019, when we announce the Company’s full year results for the 52 weeks to 30 March 2019.”