BREWING giant Heineken has announced it is set to increase savings made from its acquisition of Edinburgh-based Scottish & Newcastle by over a fifth.
But the Dutch brewer, which took over the maker of Foster's and Newcastle Brown Ale in a £7.8 billion acquisition with Danish rival Carlsberg earlier this year, added that it was doubtful whether the deal would benefit earnings per share by 2009.
After a review of the S&N assets, Heineken said it had identified cost synergies of £145 million, as opposed to an earlier figure of £120m, over the next four years.
It is understood that the extra savings are set to come from streamlining processes in divisions such as IT and production and are not likely to result in further job losses.
Earlier this month, the brewer announced that 85 workers at S&N's head office in Edinburgh were set to lose their jobs – but that 39 had accepted offers for roles in other parts of the Heineken group, while a further 38 had agreed to stay on to support the continuing programme of integration for an unspecified period of time.
The bulk of S&N's workforce and its brewing operations are based south of the Border.
Analysts gave mixed reactions to yesterday's news. "It is difficult to say if this is good or bad news," Rabo Securities analysts said.
Brokers added that, while a 21 per cent increase in the savings target is good, the statement that the company is no longer sure whether the deal will be accretive to earnings per share by 2009 was negative.
Heineken, which reports first-half results next Wednesday, has suffered a hit of almost 30 per cent to the value of its stock this year after investors criticised the S&N takeover.
The full article contains 306 words and appears in The Scotsman newspaper.
