Never Mind Brexit. Peppa Pig and British Pubs Are Attracting Buyers.
Britain’s negotiations to leave the European Union appear stuck. Businesses have loudly complained about post-Brexit uncertainty. The British economy is shrinking.
And yet, businesses and investors from around the world are still lining up to spend billions on major London-listed assets. In the last week, Greene King, a large British brewer that owns 2,700 pubs, was picked up for more than $5.5 billion, and the company behind Peppa Pig, the children’s TV character who enjoys her muddy puddles, attracted $4 billion.
It is a sign that for overseas acquirers, Britain can still be an attractive target.
The uncertainty over Brexit over the last several months has driven down the value of the British pound to levels not seen in over two years. And that angst has contributed to an economy that shrank 0.2 percent last quarter, a possible precursor to a recession.
But that’s not to say Britain’s corporate landscape now resembles a jumble sale, with distressed bargains right and left. Every deal is different, and it’s unlikely there is any single reason buyers are spending in Britain. Two people with knowledge of Hasbro’s decision to acquire Entertainment One, the parent company of Peppa Pig, said that currency values and any sense of buying a British-listed company at a discount played small roles in the deal.
And the overall amount of deal-making in Britain is down from recent years. So far in 2019, 731 deals worth $67.3 billion have been announced, according to the data provider Refinitiv. By comparison, 849 transactions worth $108.5 billion had been announced the same time a year ago.
Still, several big names listed in Britain have been snapped up by overseas buyers despite the fog of Brexit. Here’s a sampling.
Peppa Pig
Hasbro’s agreement to buy Entertainment One will give the toymaker, based in Pawtucket, R.I., a number of popular children’s characters, including the superhero team PJ Masks.
But none is as well-known as Peppa Pig, a rambunctious British piglet who has become a savior for parents looking to entertain their young children. She has become so popular that she has spawned a merchandise empire, released an album and has her own theme park in Hampshire in the south of England.
Still, the character is not without controversy: She drew the ire of Chinese censors earlier this year when she became a symbol of rebellion in China.
Entertainment One trades on the London Stock Exchange, but the company is based in Toronto. Beyond its children’s entertainment franchises, the company has a music division that represents the likes of the Lumineers and Soulja Boy and a movie unit that distributes movies like “On the Basis of Sex.”
Pubs and beer
CK Asset Holdings, a company run by the billionaire Li family of Hong Kong, announced Monday that it planned to buy Greene King, a brewer and Britain’s biggest publicly traded chain of pubs, for £4.6 billion.
CK has long looked for overseas real estate acquisitions, particularly in Britain. Last year, it bought the London headquarters of UBS for £1 billion.
But in Greene King’s string of pubs, the Hong Kong company has acquired a recession-proof staple of British culture. CK Asset Holdings was already familiar with the company, having bought 136 Greene King pubs in 2016 before leasing them back.
“We believe that this sector will continue to be an important part of British culture and the eating and drinking out market in the long run,” George Colin Magnus, a representative for CK Asset Holdings, said in a statement. Greene King, he added, “is well positioned to capture the opportunities that lie ahead.”
Legoland and Madame Tussauds
A consortium of investors agreed in June to buy Britain-based Merlin Entertainments, the owner of the Legoland theme parks, for about $5.9 billion. The deal would put Legoland, the Madame Tussauds chain and the London Eye Ferris wheel under the ownership of the family that owns the Lego brand, as well as the investment giant Blackstone (which had previously owned Merlin) and the Canada Pension Plan Investment Board.
Satellite technology
The private equity firm Warburg Pincus and a group of North American pension funds agreed in March to buy Inmarsat, a provider of global broadband service, for about $3.4 billion. In announcing the deal, the buyers said that the London-based company’s global infrastructure and its in-flight connectivity business made it an attractive investment.
Defense and aerospace
The buyout firm Advent International struck a deal last month to buy Cobham, a defense and aerospace business that supplies companies like Airbus, for about $4.9 billion. It was the first takeover of a major British company announced after Boris Johnson became Britain’s prime minister — though the transaction faces both the prospect of close scrutiny by British regulators and opposition from a major Cobham shareholder.
Online food order and delivery
The Dutch online food delivery platform Takeaway.com agreed to buy Just Eat, a British rival, in an all-stock transaction worth about $11 billion. The proposed merger would create a delivery company that would span countries like England, Canada, Germany and Israel and compete with growing delivery services from Uber Eats and Deliveroo.
A plastic packaging giant
Berry Global, a packaging company based in Indiana, in July scooped up RPC Group, one of Europe’s biggest plastic packaging companies, for about $6.5 billion, including debt. Berry, based in Evansville, beat out another American bidder, the private equity titan Apollo Global Management.
