The London-based pub operator sold its shareholding in Wells & Young Brewing Company Ltd to Charles Wells Ltd just five years after a merger between the brewing operations in 2006.
The move will allow Young’s to focus on increasing its portfolio of managed and tenanted pubs and develop new and existing brands, according to chief executive Stephen Goodyear.
Goodyear said: “This transaction is mutually beneficial for both Young’s and Charles Wells. Young’s is focused on investing in its premium pub estate whilst Wells & Young’s is looking to invest in developing new and existing beer brands. We are pleased to retain good supply agreements and our customers will therefore continue to enjoy their customary array of quality cask ales and lagers throughout our estate.”
Charles Wells, who held a 60 per cent share in the 2006 merger, will pay £5.1m in February 2012 and the remaining £10m in two equal amounts in February 2013 and February 2014.
As at 4 April 2011 the net book value of Young’s investment in Wells & Young’s was £15.3m and the company had 149 managed pubs and 97 tenanted ones, principally located in London and the South East.
Young’s will use the consideration from the transaction to invest in the further development of the Young’s and Geronimo pub estates.
The exclusive three-year rolling agreement with Wells & Young’s for the supply of drink to the company’s pub estate has been amended into two agreements – one for beers and ciders and the other for wines and spirits.
Both are two-year rolling agreements but Young’s cannot give notice of termination within first two years.