Carlsberg wants a better slice of Europe's biggest beer market

Carlsberg Breweries said it would pay 38 euros per Holsten share, a total of 522.5m euros ($648m;�362.6m), as well as taking on Holsten's debts.

Carlsberg said the purchase would make it the biggest brewer in northern Germany and it would move its German headquarters to Hamburg.

Rumours of a takeover have pushed up Holsten shares by 40% this year; they ended Monday at 34.50 euros.

Brand expansion

Carlsberg said it has already won the support of several major Holsten shareholders for its bid, giving it control of 51% of Holsten.

But it said it wants the backing of 75% of the shareholders to close the deal, which is subject to regulatory approval.

Carlsberg said buying Holsten would help its strategic goal of building its brands, particularly the Carlsberg brand.

It said Holsten was a "well-invested, highly efficient company", with a strong distribution network in Germany, Europe's biggest beer market, through which to expand sales of the Carlsberg and Tuborg beer brands.

Carlsberg said it expects the takeover will produce cost savings of 7m euros in 2004, 14m euros in 2005 and 17m euros in 2006.

It added that it has reached binding agreements that would allow Holsten to sell its mineral water companies and two breweries to the Bitburger Group, off-loading assets worth 628m euros.

After that, Carlsberg Breweries reckons the cost of buying Holsten would stack up to 437m euros including covering the German firm's debts.

The retained parts of the Holsten business had 2002 sales of 506m euros and core earnings of 48m euros, Carlsberg said.