Stonegate is too become the UK’s largest pub owner, after announcing today (July 18th) it will buy Ei Group for £1.27bn. The operator, which owns brands including the recently acquired Be At One and Slug & Lettuce, currently has over 760 sites, a number it has reached incrementally since buying 333 sites from Mitchells & Butlers almost a decade ago. This new purchase will see their estate rise by 4,000 sites, making them the largest pub owner in the UK, a title formerly held by Ei Group.

Despite discussions taking place yesterday and a formal announcement today, shareholders still have to vote on the deal which also has to be approved by various competition authorities.

Due to the recent disposal of 370 commercial properties and their debts, the acquisition valued Ei Group’s entire business at near £3bn. Both companies said there were strong strategic reasons for the buyout, including their “complementary portfolios” and skills within the business, which would benefit customers, tenants, employees and other stakeholders.

Stonegate is an experienced managed pub operator, with a record of investing more than £350m into its estate since 2010, including £71m in 2018. The company also won five awards at last year’s Publican Awards, including Best Pub Employer, Best Managed Pub Company and Best Community Pub Operator.

Ei Group chairman Robert Walker said: “In 2015, we set out a new strategy. During the past four years, we have made great progress in its execution and have delivered a significant increase in value for our shareholders. The management team have done an outstanding job and the acquisition, at a significant premium, is only possible because of the work that they have done and what has been achieved.”

Walker added: “The acquisition delivers the future value of the strategy for our shareholders and secures an exciting future for our tenants and employees by creating the leading managed and tenanted pub company in the industry.”

Stonegate chairman Ian Payne said: “It is an exciting prospect to bring EIG and Stonegate together to create a diversified pubs group with significant industry expertise. At Stonegate, we have an established track record of running successful pubs throughout the UK – with over £350m having been spent on capital expenditure at Stonegate since it began trading in November 2010. We plan to leverage our existing managed house infrastructure, portfolio of formats and access to capital and invest in the combined estate for the benefit of all stakeholders.”