Brewer and pub company Marston's has announced plans to merge with Carlsberg UK in a £780m deal.
The two beer giants will join forces, creating Carlsberg Marston's Brewing Company, in a deal that values Marston's at £580m and Carlsberg UK at £200m.
Marston's will hold a 40% stake in the joint entity and receive a cash payment of up to £273m, with Carlsberg holding the 60% stake.
The two companies have predicted the merger will produce cost savings of £24m in its first three years.
Ralph Findlay, chief executive of Marston's, said: "This new partnership acknowledges Marston's strategy, position and consistent outperformance against the UK beer market, realising value for shareholders today, whilst retaining an interest in the future upside of the combined entity.
"Marston's strong heritage, extensive distribution platform and established reputation for brewing and logistics excellence, together with Carlsberg UK's values, long history in beer, brand portfolio and scale, combine the best attributes of both to create a compelling beer business with an outstanding portfolio of global and local beer brands, proven brewing expertise, strong distribution networks and wholesale opportunity.
"Marston's will play a key role in the prospects of the combined entity which represents an exciting new chapter for Marston's established brewing heritage and future potential, whilst enabling it to further reduce its debt and focus on maximising value from its high quality pub estate."
Cees't Hart, chief executive of Carlsberg UK, said: "The joint venture's brand portfolio will allow us to offer a significantly stronger beer portfolio to our UK customers. In addition, the combined business will bring our customers wider choice, greater capacity, product innovation and marketing and distribution efficiency benefits."
The deal is expected to be completed in Q3.