S&N sells French division to reject takeover bid

Scottish & Newcastle has announced the sale of its underperforming French wholesale distribution business in yet another bid to fight its takeover by Carlsberg A/S and Heineken NV.

S&N chief executive John Dunsmore announced that he “intends to take full control” of Baltic Beverages Holdings (BBH), its joint venture with Carlsberg, as the brewer continues to fend off the proposed Carlsberg and Heineken bid.

S&N is reported to have started arbitration aimed at forcing the Danish brewer to give up its stake in BBH, which owns Russia’s largest beermaker, and is said to be working with a minority partner to pay for a deal.

In its trading update today, S&N also announced that it is “confident” about earnings in 2008, with the French unit sale having an “immediate positive impact” on profit and cash flow. The brewer reported a drop of 3.1% in its first half pre-tax profit for the year.