OFT to look at Punch Taverns deal

Punch Taverns' £2.7b takeover of Spirit Group is being scrutinised by the Office of Fair Trading (OFT).

The long-rumoured deal, which completed early this month, created the UK's largest pub company, with more than 9,500 sites.

As part of its role the OFT will consider whether the deal unfairly lessens competition. It will refer it to the Competition Commission if it believes this is the case.

Punch intends to convert 750 of Spirit's 1,832 managed pubs to its favoured leased or tenanted format within two years.

The pub giant is likely to sell off some of the larger pub sites to managed pub rivals such as Mitchells & Butlers or Wolverhampton & Dudley Breweries.

It is not yet clear if it intends to keep a reduced managed division or sell off the remaining pubs.

Spirit's chief executive and chairman, Karen Jones and Tony Campbell, quit the company on completion of the deal on 9 January.

By Chris Druce

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