£2.7bn Greene King deal: Ownership of city's 19 pubs could transfer to tax haven firm
Greene King, which has 19 pubs in the city and its immediate environs including the Granta, Baron of Beef, Fort St George and the Eagle, is the subject of a £2.7billion acquisition bid by Hong Kong-based CK Bidco.
The Bury St Edmunds-based brewer employs 38,000 staff in the UK and runs 2,700 pubs, hotels and restaurants. Its board is supporting the sale, but the European Commission will have to approve it.
In a statement CK Bidco said it “intends to keep Greene King’s headquarters and headquarter functions in Bury St Edmunds and its support centre in Burton upon Trent”.
It added that CK Bidco had no plans to “make material changes” to staff employment and did not intend to “initiate any material headcount reductions within the Greene King organisation as a result of the acquisition”.
A manager at the Robin Hood on Fulbourn Road, Joel Cronin, said: “We were invited to a conference call on Monday when news of the proposed sale was coming through. We’re not expecting any immediate changes.”
However, the structure of the deal will raise eyebrows - and not just among the drinking classes. CK Bidco is a recently incorporated limited liability real estate company based in the Cayman Islands tax haven. CK Bidco is owned by CKA, which is owned and run by Victor Li. Mr Li is himself the son of Hong Kong’s richest man, Li Ka Shing, who has invested millions in Cambridge medtech enterprises, including the Li Ka Shing Centre, which houses Cancer Research UK’s Cambridge Institute at Cambridge Biomedical Campus near Addenbrooke’s Hospital.
Any concerns that the UK is selling off vital functions and businesses to Asia were not reflected by the markets. Shares in Greene King, which recorded £2.1bn revenues in 2018, soared 51 per cent to 850p on Monday.
Britain’s largest union, Unite, is looking for assurances. Unite has more than 250 members, including draymen, brewery production staff and warehouse workers, at the brewery which was founded in 1799.
Unite regional officer Mark Jaina said: “Unite will be seeking an urgent meeting with Greene King, as well as with the management of CK Asset Holdings to gain a better understanding of the future business strategy.
“This is a major takeover of a well-known British company with a long history in brewing and pub ownership built up over 220 years. It could have major ramifications for this sector, given the magnitude of the takeover.
“Our first priority is to seek reassurances for our members on future job security, and pay and employment conditions."
But the takeover isn't a done deal. The next step is that the bid will be referred to the European Commission. With Greene King's board fully behind the bid, the question now is simple: will the bid meet the Commission's stringent competition rules?
