Heineken set to take Scottish & Newcastle UK brands

LONDON - Heineken is set to take control of Scottish & Newcastle's UK brands, including John Smith's and Foster's, after S&N agreed to hold discussions with the brewer and Carlsberg about their new 拢7.8bn takeover offer.

The deal could have implications for S&N and Heineken's advertising agencies TBWA\London, M&C Saatchi and The Red Brick Road, and media agencies Starcom and MindShare.

After Heineken and Carlsberg raised their offer to 800p a share yesterday, leading S&N board to agree to talk, the City expects a deal to be done within days. Leading institutional shareholders had said earlier this week that if the offer was raised they would be inclined to accept the offer.

The proposed deal would involve S&N's UK, Ireland, Portugal, Finland and Belgium operations going to Heineken.

Carlsberg would buy out S&N's 50% interest in their Eastern Europe and Russia joint venture BBH and get its France, Greece and China operations.

S&N's own brands include John Smith's, Newcastle Brown Ale and Strongbow, while brands it markets in the UK under licence include Foster's.

The John Smith's account is with TBWA\London; Strongbow is with St Luke's; and Foster's and Kronenbourg are with M&C Saatchi. It is not clear which of Heineken or Carlsberg will take Kronenbourg.

Starcom holds the UK media planning and buying account for S&N and MindShare the global account for Heineken.

S&N also has a number of below-the-line agencies on its roster including WWAV Rapp Collins, EHS Brann and Story.

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