Greene King, the expanding East Anglian brewer and pub owner, announced this morning it has bought Morrells of Oxford and its 107 tied houses for £67m cash, including £30.4m debt.
The deal, which pushes Greene King close to 2,000 pubs, is the second the company has done with Michael Cannon, the serial pubs entrepreneur who sold it the Magic Pub Company six years ago.
It is a blow to the Thomas Hardy Brewery in Dorchester, which has been brewing beers for the Morrells estate since the Oxford company closed its own brewery, and which will now find itself squeezed out by Greene King ales.
Morrells owns and operates 57 managed and 50 tenanted pubs, most within a 30-mile radius of Oxford. The pubs generated operating profit, before central overheads, of £6m in the year to 31 March 2002.
Tim Bridge, Greene King's chief executive, said: "We are very pleased to have made this acquisition, which will benefit all parts of Greene King.
"The Morrells pubs will integrate well into our managed and tenanted estates and provide a very good strategic fit for us. Our Brewing and Brands division will also gain through the distribution of our ale brands throughout the estate.
"We believe we can drive further profit growth from the business to add long-term value for our shareholders."
Greene King said more details of the acquisition will be provided when it announces its results on July 5.
Cannon sold Devenish to Greenalls in 1993, netting £26m, and then invested £12m in the Magic Pub Company. He sold that in 1996, picking up £70m, and moved to the United States where he spent £26.5m buying Fuddruckers, a chain of American hamburger restaurants. He backed the buy-out of Morrells in 1998 after it quit brewing, and returned from the United States in 2000 to take command of the company.
The deal, which pushes Greene King close to 2,000 pubs, is the second the company has done with Michael Cannon, the serial pubs entrepreneur who sold it the Magic Pub Company six years ago.
It is a blow to the Thomas Hardy Brewery in Dorchester, which has been brewing beers for the Morrells estate since the Oxford company closed its own brewery, and which will now find itself squeezed out by Greene King ales.
Morrells owns and operates 57 managed and 50 tenanted pubs, most within a 30-mile radius of Oxford. The pubs generated operating profit, before central overheads, of £6m in the year to 31 March 2002.
Tim Bridge, Greene King's chief executive, said: "We are very pleased to have made this acquisition, which will benefit all parts of Greene King.
"The Morrells pubs will integrate well into our managed and tenanted estates and provide a very good strategic fit for us. Our Brewing and Brands division will also gain through the distribution of our ale brands throughout the estate.
"We believe we can drive further profit growth from the business to add long-term value for our shareholders."
Greene King said more details of the acquisition will be provided when it announces its results on July 5.
Cannon sold Devenish to Greenalls in 1993, netting £26m, and then invested £12m in the Magic Pub Company. He sold that in 1996, picking up £70m, and moved to the United States where he spent £26.5m buying Fuddruckers, a chain of American hamburger restaurants. He backed the buy-out of Morrells in 1998 after it quit brewing, and returned from the United States in 2000 to take command of the company.
