Fuller's swallows family brewer Gale's for 92m

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http://news.independent.co.uk/business/news/article325798.ece
By Alex McRae
Published: 09 November 2005

Charles Brims, the chairman of the independent Gale's brewery, accepted a
91.8m takeover bid from its rival Fuller's yesterday, blaming the impending
smoking ban in pubs.

The Hampshire-based family company, which brews HSB, Festival Mild and
Butser Bitter, is the fourth family brewer to be taken over in the past
year, after Belhaven, Ridley's and Jennings.

Mr Brims said the smoking ban and increased competition made it difficult
for small family brewers to expand. He added: "We're sad that it's the end
of an era as an independent family brewer, but it's a very good deal." The
deal will result in 3m cost savings for the merged group. Fuller's said it
would be able to negotiate better purchasing deals and streamline jobs
within the expanded company.

News of the agreed takeover immediately led to speculation about the future
of the Gale's Victorian tower brewery in Horndean, with fears that it might
not suit the Chiswick-based Fuller's to brew beer in Hampshire. The Horndean
brewery's 50,000 barrel maximum capacity could be produced at Fuller's much
larger Chiswick site in west London, some said. Fuller's said it had not
made a decision on Horndean and would carry out a review of its entire
business first.

A closure of the Horndean brewery would be opposed by the Campaign for Real
Ale, which fears that some beers may vanish, such as Prize Old Ale, a 9 per
cent alcohol, cork-bottled, real ale. After paying off loans, Gale's
shareholders will be left with a total 82.7m to be divided between them.
More than half the shares are owned by members of the Bowyer family, which
has run the company since 1896.

Matthew Gerard, an analyst at Investec, said the deal was not a cheap one
for Fuller's, but "since Gale's is a high-quality estate, shareholders don't
mind paying a bit more". Gale's owns 111 pubs, 97 of which are freeholds.
The company focuses on food sales, a growth area. Michael Turner, the chief
executive of Fuller's, says the company is likely to keep Gale's sweet,
malty HSB beer, which at 4.8 per cent fits perfectly between Fuller's London
Pride at 4.1 per cent and ESB at 5.5 per cent.

It is the largest acquisition Fuller's has made to date, and the first
brewery the company has taken over for 150 years. "It's a fantastic prize
for us," said Mr Turner, who witnessed a rise in the group's share price
from 864.5p to 898.5p yesterday.

Charles Brims, the chairman of the independent Gale's brewery, accepted a
91.8m takeover bid from its rival Fuller's yesterday, blaming the impending
smoking ban in pubs.

The Hampshire-based family company, which brews HSB, Festival Mild and
Butser Bitter, is the fourth family brewer to be taken over in the past
year, after Belhaven, Ridley's and Jennings.

Mr Brims said the smoking ban and increased competition made it difficult
for small family brewers to expand. He added: "We're sad that it's the end
of an era as an independent family brewer, but it's a very good deal." The
deal will result in 3m cost savings for the merged group. Fuller's said it
would be able to negotiate better purchasing deals and streamline jobs
within the expanded company.

News of the agreed takeover immediately led to speculation about the future
of the Gale's Victorian tower brewery in Horndean, with fears that it might
not suit the Chiswick-based Fuller's to brew beer in Hampshire. The Horndean
brewery's 50,000 barrel maximum capacity could be produced at Fuller's much
larger Chiswick site in west London, some said. Fuller's said it had not
made a decision on Horndean and would carry out a review of its entire
business first.

A closure of the Horndean brewery would be opposed by the Campaign for Real
Ale, which fears that some beers may vanish, such as Prize Old Ale, a 9 per
cent alcohol, cork-bottled, real ale. After paying off loans, Gale's
shareholders will be left with a total 82.7m to be divided between them.
More than half the shares are owned by members of the Bowyer family, which
has run the company since 1896.

Matthew Gerard, an analyst at Investec, said the deal was not a cheap one
for Fuller's, but "since Gale's is a high-quality estate, shareholders don't
mind paying a bit more". Gale's owns 111 pubs, 97 of which are freeholds.
The company focuses on food sales, a growth area. Michael Turner, the chief
executive of Fuller's, says the company is likely to keep Gale's sweet,
malty HSB beer, which at 4.8 per cent fits perfectly between Fuller's London
Pride at 4.1 per cent and ESB at 5.5 per cent.

It is the largest acquisition Fuller's has made to date, and the first
brewery the company has taken over for 150 years. "It's a fantastic prize
for us," said Mr Turner, who witnessed a rise in the group's share price
from 864.5p to 898.5p yesterday.

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John Hopkins
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