BREWING giant Scottish & Newcastle today accepted a £7.8 billion takeover offer by European rivals Heineken and Carlsberg.

The Edinburgh-based group, which is Britain's biggest independent brewer, had rejected three previous bids from the Danish and Dutch partnership before agreeing today's deal.

S&N employs more than 1000 staff in Edinburgh, but the takeover is not thought to put any jobs at risk. The deal was today hailed as good for the industry.

The S&N board's resistance to takeover pressures succeeded in increasing the price which shareholders will receive to £8 per share – more than 50 per cent higher than when takeover rumours began in March last year.

Carlsberg will take on S&N's stake in Baltic beverages Holding (BBH), their fast-growing 50/50 joint venture in Russia and the Baltics, as well as the firm's operations in France, Greece, China and Vietnam. Heineken, meanwhile, will become the UK's leading brewer after taking on S&N's domestic business, as well as bolstering its position in several European markets.

S&N has grown to become the world's seventh largest brewer by sales volume since the original William Younger brewery was established in Leith back in 1749. William Younger merged with fellow Edinburgh brewer William McEwan to form Scottish Brewers in 1913, before merging with Newcastle Breweries in 1960 to become Scottish & Newcastle.

S&N chairman Sir Brian Stewart said: "The management and employees of S&N have built a group with strong brands enjoying leading positions in both mature markets in Western Europe and growing emerging markets.

"These emerging markets include those covered by BBH, the prospects of which shareholders will be better placed to assess as a result of today's announcement. The S&N board believes that the consortium's offer delivers a fair value for S&N, reflecting growth prospects, and will recommend that shareholders accept."

Jorgen Buhl Rasmussen, president and chief executive of Carlsberg, said the deal was a "a truly transformational transaction" for his company.

"In a single step we have created the world's fastest-growing global brewer. We now have full control of our destiny in Russia and other BBH territories."

And Jean-Francois van Boxmeer, chairman and chief executive of Heineken, said it was a "significant strategic step" for Heineken. He said: "It gives us undisputed leadership in Europe and creates significant opportunities in profitable markets to grow the Heineken brand.

"I look forward to welcoming the Scottish & Newcastle employees into our business and learning from their experience and skills."

Graeme Birse, deputy chief executive of the Edinburgh Chamber of Commerce, said there had been a sense of inevitability over the takeover. He said: "On the one hand, there is a sense of sadness that the proud tradition of a great Scottish company comes to an end.

"For Edinburgh as a brewing centre, S&N was the figurehead of that, so this marks a sense of history passing. But the new chief executive of S&N, who has only been in the job three months, got his tactics right.

"He sought to deal with it developed and seek the best value for shareholders, employees and customers. Because of that, this offer is substantially higher than it otherwise would have been.

"The silver lining is that brewing, as with many industries, is now truly global and S&N is now part of a global conglomerate of S&N, Carlsberg and Heineken."

Andy Lynch, an analysts at Schroders Investment Management, said: "Carlsberg probably paid a little bit too much. It's good for the industry. It's very good news for Scottish & Newcastle shareholders."

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