Heineken buys 918 UK pubs from RBS for $646 million

Heineken NV, the world's third-largest brewer by volume, today acquired 918 pubs in the UK belonging to Galaxy Pub Estate from Royal Bank of Scotland (RBS), for £412 million ($646 million).

The Galaxy 918 pubs are already managed by Heineken's UK subsidiary Scottish & Newcastle, which will now be combined with 462 other Heineken-owned bars in the UK, making it one of Britain's biggest pub owners. 

RBS had acquired Galaxy Pub Estate from brewer Scottish & Newcastle in 1999, which made Britain's biggest government-owned lender into one of the largest leased pub landlords in the country.

''Our ownership of this estate strengthens our leading position in the UK beer and cider market, particularly in the valuable on-trade channel,'' Didier Debrosse, Heineken's regional president for Western Europe, said in a statement.

Stefan Orlowski, managing director of Heineken UK, said, ''There continues to be an important role for the great British pub in the UK on-trade, and this acquisition is a significant vote of confidence in the channel.'' 

''Owning the Galaxy freehold will allow us to continue the successful transformation of our pub business, concentrate on operational excellence and deliver long-term value from a high-quality, well invested pub estate,'' he added.

The sale is part of the Edinburgh-based bank's ongoing plans to sell off non-core assets to repay the government bailout. The UK government owns 83 per cent of the bank after it pumped in money during the 2008 global financial crisis.