Denmark's Carlsberg and Dutch-based Heineken said the deal was recommended by S&N. Their 800p per share offer values the maker of Foster's and Kronenbourg at just over £10bn including debt and pension liabilities.
However, the companies unexpectedly revealed that S&N would not be paying dividend for the year ending 2007. The brewer paid a 21.31p dividend in 2006 and had been forecast to pay out between 22p and 27p on last year's earnings.
The agreement, which came ahead of a Takeover Panel "put up or shut up" deadline of midday today, was brokered after Carlsberg agreed to release projections through to 2010 for its Russian joint venture with S&N, Baltic Beverages Holding. Release of BBH data has been the main point of contention between the groups during the three-month takeover saga, as it could allow rivals such as Anheuser-Busch, Inbev and SABMiller to gauge whether they could afford a counter-bid.
Providing approval is granted by the European Commission and competition authorities in the US, Russia and Ukraine, the takeover is now expected to complete in the second quarter.
Many traders were predicting that Carlsberg may try to pick up a stake in S&N today to try and head off any chance of a counterbid. However, with S&N shares trading up 16.5p at 782.5p in early deals, there was no indication of a dawn raid.
If the deal completes, Carlsberg will take control of S&N's 50% stake in BBH, along with its operations in France, Greece, China and Vietnam. Amsterdam-based Heineken will control S&N's operations in other European markets including Britain, as well as the US and Indian ventures.
"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," Carlsberg Chief Executive Jorgen Buhl Rasmussen said.
Hemscott verdict: Heineken has apparently been fighting with Carlsberg over who should foot the bill for the latter taking S&N's more healthy operations in France and elsewhere, while the former is left with soggy markets such as the UK. Today they seem to have decided: the shareholders.
The decision to suspend S&N's dividend payment for 2007 may have helped push through an agreement at 800p per share, but investors can be excused for feeling short-changed.
So is this the end of the story? The enterprise value for the bid is 14.3 times S&N's underlying earnings - toppy, but not unbeatable - while a break fee of 1% of the deal price does not seem extreme if another predator wanted to take a pop. At the time of writing, the bid consortium has only managed to secure irrevocable commitments from Hartwall Capital, a 9.2% stakeholder, and appears not to have raided the market this morning to build a position.
With the BBH forecasts now public, the chance of a counterbid cannot be dismissed entirely. Competition worries may deter the likes of SABMiller from challenging what now looks like a done deal for S&N, but there is always the possibility of an alternative break-up bid involving Anheuser-Busch and Inbev at around 850p per share. Holders may therefore be tempted to play the waiting game rather than accept the net 785p offer Carlsberg and Heineken have rather cheekily put on the table.
