P.M. BRIEFING : Grand Met Selling Breweries

Grand Metropolitan PLC, the British food and drinks group, confirmed today that it is selling most of its breweries to Elders IXL Ltd. and that the two companies will jointly operate about 5,000 pubs.

The deal will make Australia-based Elders Britain’s second-largest brewer after Bass PLC.

Elders, now the world’s fourth-largest brewer and best known for its Fosters beer brand, disclosed Friday that it had reached an “understanding” with Grand Met.

Elders, through its British unit Courage Holdings PLC, is to pay $586 million for four Grand Met breweries. Elders is also due to obtain Grand Met’s local brewing and distribution rights to several non-British brands, including Carlsberg and Budweiser.

At the same time, the two companies plan to merge their pub businesses into a single company, to be called Inntrepreneur Estates. The new company will combine Elders’ 4,940 pubs and Grand Met’s 3,570. But Inntrepreneur plans to sell 1,500 Elders pubs to raise $480 million. Another 2,000 pubs will be released from their obligations to buy beer supplied by the parent companies over the next two years.