Greene King name set to live on in Bury St Edmunds despite sale plans
- Credit: PA
Greene King’s past and present workers in Bury St Edmunds are seeking clarity over jobs and pensions after the brewing and pubs giant announced it was the subject of a £2.7bn takeover deal. What will it mean to them?
1 Who will the new owners be?
Many have been taken by surprise - including some City experts - after the historic firm revealed that it had received a favourable offer from Chinese property multinational CK Asset Holdings, which is run by Hong Kong's richest family.
2 What about job losses?
"CK Bidco said it did not intend to initiative "any material headcount reductions within the Greene King organisation as a result of the acquisition". However, it is expected that the firm's non-executive directors will resign as directions on or shortly after the sale.
3 What about the company name and brand?
The UK's biggest pub owner was founded in Bury St Edmunds in 1799 and is still going strong from its headquarters in the town, with 1,000 employees based there. A joint statement on the bid makes clear that its presence in the town is set to continue - and the name will live on - although some want further assurances.
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4 Who's in favour of the deal?
The Greene King board is unanimously supporting the mega-deal, which includes various safeguards about jobs and pensions which are laid out in a joint statement from the two companies.
5 What about the workers?
However, union officials said they would be studying it in detail to see what it might mean for workers.
Unite said it was seeking an urgent meeting for reassurances on job security.
The union says it has more than 250 Greene King employee members, including draymen, brewery production staff and warehouse workers, at the brewery which was founded in 1799. Unite's members are at the firm's headquarters in Bury St Edmunds, Suffolk, as well as distribution centres in Abingdon, Oxfordshire and Eastwood, Nottinghamshire.
Unite regional officer Mark Jaina said: "Unite will be seeking an urgent meeting with Greene King, as well as with the management of CK Asset Holdings to gain a better understanding of the future business strategy.
"This is a major takeover of a well-known British company with a long history in brewing and pub ownership built up over 220 years. It could have major ramifications for this sector, given the magnitude of the takeover.
"Our first priority is to seek reassurances for our members on future job security, and pay and employment conditions."
6 What's been the market reaction?
Greene King shares soared on the stock exchange higher after the deal was announced. Many employees have shares, including pensioner Ian Houlder (see below), so they will scoop a small (or large) windfall from the deal.
7 What does the business consist of?
The Suffolk-based business is the UK's biggest pub owner, with roughly 2,700 pubs, restaurants and hotels across the country, 38,000 employees, and a turnover of £1.768bn.
8 So who are the prospective new owners?
The pub group looks set to sell its entire business to the real estate group run by Hong Kong's richest family.
Real estate giant CKA is chaired by Victor Li, the son of Hong Kong's richest man, and a newly-formed subsidiary, CK Bidco - which is based in the Cayman Islands - had been set up specifically for the deal.
9 What does Suffolk's business community think?
Suffolk Chamber chief executive John Dugmore said he hoped Greene King's strong presence in Suffolk would continue in the long term.
"Greene King is a longstanding Suffolk Chamber member, a significant employer in west Suffolk and a Suffolk brand with national and international reach, so we obviously wish them well with this deal," he said.
"It's reassuring to note the prospective new owners' continued commitment to the Bury St Edmunds HQ and we hope that future investment levels at the site are maintained over the longer-term."
10 What about Greene King pensioners?
Greene King final salary pension-holder Ian Houlder - and former town mayor - feared company pensions could be affected, hitting thousands of the firm's ex-employees. He wondered what guarantees they would be receiving in the event of the takeover.
"Will they honour the current terms and RPI (minimum) increases and current level of payments?" he asked, as he expressed fears that commitments could be forgotten.
"There are questions I would ask and they need to be asked," said the 70-year-old, who was made redundant from the firm - where he was rent manager in the tenanted division - in 2010 after 27 years. He was stung over a much smaller company pension with another unconnected business which he worked for many years ago, he explained.
"It's pretty early, obviously - it's a bit of a bombshell," he said.
11 What commitments have been made to Greene King's employees?
A statement within the joint statement makes clear that the new owner plans to honour its commitments. CK Bidco said it "greatly values" the skills, knowledge and expertise of Greene King's existing management and employees and "does not intend to make material changes with regard to the continued employees and management of the Greene King Group".
12 Are pensions and employment conditions protected?
CK Bidco said existing contractual and statutory employment rights, including in relation to pensions of all Greene King management and employees will be "fully safeguarded". The company did not intend to make any changes to the current pension contribution arrangements, and would be optimising the future investment strategy of the pension schemes.
13 What's the future for the Bury St Edmunds HQ (and Burton upon Trent)?
CK Bidco said it intends to keep the headquarters and its functions in Bury St Edmunds and its support centre in Burton on Trent, as well as its pubs - beyond the 'ordinary course' pub investments, divestments or transfers.
"No changes are envisaged by CK Bidco with respect to the redeployment of Green King's fixed asset base," it said.
14 What does the town MP think of the deal?
Jo Churchill admitted she was caught by surprise by the announcement, and had sought assurances - which she had received.
"I was surprised to hear of the impending sale of Greene King to CK Noble yesterday and was grateful for a conversation and clarification of the situation with a member of the Greene King board," she said.
"I sought assurances regarding the future of the business in the town due to its importance to the commercial and cultural life of those in Bury St Edmunds and the people it employs.
"I was pleased by the response that CKN are committed to business as usual. The integrated model of pubs and brewing is one they wish to maintain, and the board feel that their philosophy on business is closely aligned to their own. Their presence in the town is part of our heritage and their award-winning apprenticeship programme, part of the future. I was encouraged by the answers I received.
"I am conscious that this is the early stages of a commercial decision. However, with the management team remaining in place I feel assured that it will be business as usual."