United Kingdom: Scottish & Newcastle plc announced on December 8, 2004 that S&N Pub Enterprises (“S&NPE”), the leased Pub Company of Scottish Courage, has agreed a deal to run an additional 364 pubs in the UK. The pubs are being sold by Spirit Group and have been bought by a newly formed company, Globe Pub Company, which has appointed S&NPE to operate the business. This deal will increase the number of leased pubs being run by S&NPE to around 1500. The Globe Pub Company said it will acquire 364 managed pubs (the “Estate”) for a price of approximately GBP 345 million. The acquisition is unconditional and will complete on Sunday 12th December 2004, The Globe Pub Company mentioned.

“As part of the agreement Scottish Courage has also secured a full beer supply agreement for the 364 pubs. This new distribution will add around 100,000 incremental barrels as well as securing an existing 30,000 barrels for our brands,” Scottish & Newcastle said in its statement.

John Dunsmore, Chairman of Scottish Courage commented: “The combination of S&NPE’s proven strength in leased pubs and Scottish Courage’s unrivalled portfolio of brands has enabled us to achieve this significant business win.”

Globe has mandated Barclays Capital as senior debt arranger. In association with the transaction, Globe has entered into long-term agreements with Scottish & Newcastle Pub Enterprises, a wholly owned subsidiary of Scottish & Newcastle plc (“Scottish & Newcastle”), to manage the outlets on its behalf and with Scottish Courage, also a wholly owned subsidiary of Scottish & Newcastle, to supply beer to the estate and to make available certain trade loans.

The Estate is of high quality and Globe has identified significant opportunities to operate the large majority of these outlets as tenancies. The Directors of Globe believe that this will create one of the highest quality tenanted operations in the country and be very attractive to prospective tenants wanting to build long-term, successful pub businesses. Lehman Brothers acted as financial advisor to Scottish & Newcastle and the Globe Pub Company in this transaction.

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