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Stonegate eyes post-merger savings from procurement and central operations

Sports Bar & Grill

Stonegate will seek cost savings from procurement and central operations duplication when its takeover of Ei Group is complete.  

The 800-strong pub group’s proposed £3 billion offer for its larger counterpart remains the standout acquisition of the year so far and, as has been the case with other blockbuster M&A deals such as Greene King’s takeover of Spirit Group, it is likely that there will be a period of restructuring and streamlining ahead.

In documentation outlining its strategic plans for EIG, Luton-based Stonegate said that it intends to perform a detailed review of how best to integrate the two businesses together before making any decisions.

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“Stonegate believes that there may be potential to generate cost savings in the combined group through procurement savings and removal of certain central administration and operations costs where duplication exists,” it stated.

“At this stage, Stonegate has not yet developed a proposal as to how such integration would be implemented and will only develop and implement such proposals once Stonegate has completed its review which is expected to take at least six months following completion of the acquisition.”

Subject to the outcome of the detailed review of the integration of both businesses, the company acknowledged that it is possible that there may be a small reduction in the combined group’s headcount including in corporate and support functions at EIG’s head office where there is duplication with Stonegate’s existing functions or where the function was required to support EIG’s public listing.

EIG’s CEO and CFO will step away from the business once the deal is complete, while Stonegate confirmed it will consider the migration and rationalisation of the combined head office function to allow for the better integration of both businesses.

However, it stressed that it has not yet concluded on its preferred outcome and will only develop and implement such a proposal once a review has been completed.

BREAKING NEWS: Stonegate to take over Ei Group in blockbuster pub deal

Tags : Ei GroupprocurementPubsStonegate
Andrew Seymour

The author Andrew Seymour

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