SCOTTISH Courage, brewers of Newcastle Brown Ale, has acquired Federation Brewery from workers' co-op Northern Clubs Federation Brewery (NCFB) for £ 7.2 million.
Scottish Courage has also tabled a second offer to acquire additional assets ? including the brands, wholesale business and loan book ? of NCFB for £ 16.2 million, which has been unanimously recommended by the NCFB Board.
The announcement of the acquisition came after Scottish Courage said it is to close the Tyne Brewery, Newcastle, and move production of the Newcastle Brown Ale to Federation Brewery in Gateshead.
But the move could lead to the loss of jobs at Federation Brewery after Scottish Courage said it will only employ 150 staff out of the 280 currently working at both of the breweries.
John Coppinger, Chairman of NCFB, said: "Because of our uncertain financial outlook we carried out a strategic review of our business. It highlighted the need for us to secure more work for the brewery to fill our spare capacity.
"While the end of our independence is a sad day, in Scottish Courage I am delighted that we have a purchaser who will help us to realise our goals and secure the future of the brewery.
"The Brewery's Committee of Management is unanimous in recommending this deal to our member clubs. It provides an excellent solution to our pensions deficit and debt as well as a cash injection to members."