Punch to buy Pubmaster for £1.2b

Punch Taverns has exchanged contracts to buy rival group Pubmaster in a deal that will double the size of its estate and make it one of the UK's biggest pub operators.

The £1.2b acquisition will add 3,110 leased and tenanted pubs, bringing the enlarged group total to more than 7,400 pubs.

The deal, which is subject to shareholder approval, is expected to be completed by 28 November. Combining the two groups should save the company about £10m a year.

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Thorley: pub landlord

"This a transformational deal for Punch and represents a quantum leap in terms of growth," said Punch chief executive Giles Thorley. It is understood that the company will dispose of about 200 pubs from the acquired estate in order to comply with competition rules. Punch also today reported a 22% hike in pre-tax profits to £113m for the year to 31 August 2003, delivered through a combination of organic growth and acquisitions. Group turnover was up by 10% to £429m, from £202m in 2002. This year's acquisitions included the addition of 283 new pubs from Spirit Group, Honeycombe Leisure, Greene King and Conquest Inns at a cost of £121m. Without the acquired pubs, like-for-like profit grew by 4.3%. During the year, the group sold 47 pubs and other properties, which realised £15m in proceeds and £2.5m in profit. by Christina Golding  Buy this week's *Caterer* magazine for more industry news and analysis