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Brewer Fuller's is to sell its entire beer business to Japanese firm Asahi in a deal which values the division at £250 million.

The deal - which also involves a strategic alliance between London-based Fuller’s and Asahi - was announced in a statement to the stock market this morning.

It includes the Griffin Brewery in Chiswick, where the company was founded in 1845.

Although Fuller's will retain ultimate ownership of its brand name, Asahi will hold the global licence to use the trademark.

Fuller's chief executive Simon Emeny said: “This deal secures the future of both parts of our business including protecting the heritage of the Griffin Brewery in Chiswick, which was particularly important to the Fuller’s Board.

"We remain incredibly proud of the Fuller’s Beer Business, its history and the high quality premium beer and cider portfolio that we have developed.

"Brewing has formed an integral part of our history and brand identity, however the core of Fuller’s and the driver of our future growth is now our premium pubs and hotels business.

“I am delighted that this transaction maintains Fuller’s long association with the Beer Business and that we will continue to enjoy a strong relationship with Asahi as a key supplier.

"We look forward to continuing our alliance and developing a mutually beneficial partnership that will see both businesses flourish in the future.

"Asahi, as a company recognised for brewing excellence, is an appropriate custodian of our rich brewing history and the Griffin Brewery, and will ensure the Fuller’s Beer Business brands will reach an even wider global audience.”

Akiyoshi Koji, chief executive of Asahi, said there was "untapped international potential" in the London Pride brand which the company can use its global scale to unlock.

The announcement came as Fuller's released a trading update showing a 4.7% rise in like-for-like sales in its managed pubs and hotels over the 42 weeks to January 19.

Asahi deal good for Fuller's

Neil Wilson, chief market analyst for markets.com said: “Tokyo Pride? Fuller, Smith & Turner is selling its entire brewery business to Japanese firm Asahi for an enterprise value of £250m.

"The deal will net Fuller’s about £205m in cash. Whilst losing an iconic brewer is maybe a blow to London pride, investors are raising a glass – shares jumped more than 20% on the news, with investors set for a bumper return of up to £69m.

"For Fuller’s it allows it to focus on the pubs and hotels business, where the vast bulk (87%) of operating profits come from. In addition the cash proceeds will enable investment in these brands and properties, whilst it also retains a long-term association with its iconic beers through a strategic alliance with Asahi.

"Punters won’t notice much difference at the bar. Pubs may be closing at a hell of a clip these days but consumers still want experiences and dining out is one of those. Therefore investing in pubs and hotels is essential as consumers demand more from their pub experience.

"Asahi is an incredibly acquisitive group and right now with the pound still very undervalued it looks to be a good time to swoop. The Japanese firm has been gobbling up brewers across Europe and elsewhere on major buying spree.

"Shares were also higher on some good numbers in the trading update at the bottom of the release. More good progress - like for like sales +5.6% in the last 10 weeks. For the first three quarters of the year, like for like sales in Managed Pubs and Hotels were up 4.7%. Some read across for other brewers with Marstons and Greene King rising today off the back of this.”

Fuller's sale nothing short of astonishing

Paul Hickman, analyst at Edison Investment Research said: “Fuller’s sale of its beer business, including the iconic Griffin Brewery in Chiswick, is nothing short of astonishing.

"Management have always averred they would never sell the historic brewery, which they have described as Fuller’s “spiritual home”. In addition, London Pride is probably the most successful ale brand in the UK.

"The disposal means that management will now focus on its successful pubs and hotels operation, the most profitable part of the business, generating 87% of operating profits.

"At the same time, the sale price of £250m represents an optically rich multiple of 23.6x EBITDA. However, that includes the brewery freehold, forming a substantial part of the £83.4m asset value, which also includes Fuller’s other drinks operations, Cornish Orchards, Dark Star Brewing and Nectar Imports.

"It is thirteen years since its competitor Young’s sold its Ram Brewery in Wandsworth for £69m, for housing development.

"Around a quarter of the proceeds, £55-69m will be returned to shareholders in a special dividend of £1.00-1.25 per A Ordinary Share.

"In a 42-week trading update, the beer business reports flat volumes for the beer and cider business being sold. The pubs business hp performed much better, with managed pubs and hotels growing like-for-like sales 5.6% in the last 10 weeks.”