Completion of review

Young & Co's Brewery PLC
23 May 2006


23 May 2006

                         Young & Co.'s Brewery, P.L.C.

                           Conclusion of review and
                    brewing merger with Charles Wells Ltd.


The Board of Young & Co.'s Brewery, P.L.C. (the 'Company' or 'Young's')
announces that it has concluded its review of the options for the Ram Brewery
site and future brewing alternatives.


The outcome of this review is:

          
-    the merger of Young's brewing, beer brands and wholesale operations with 
     the brewing assets, including the freehold site of the Eagle Brewery, beer
     brands and wholesale operations of Charles Wells Ltd. ('Charles Wells') to 
     form a new brewing business to be called Wells & Young's Brewing Company 
     Ltd.( 'Wells & Young's');
     

-    following an additional subscription for shares in Wells & Young's by
     Young's at a cost of £10m, the proceeds of which will be used to repay a 
     £10m loan to Charles Wells, Young's will hold a 40% stake in Wells & 
     Young's, with the remaining 60% being held by Charles Wells; and
     

-    a proposed sale of the 5.5 acre Ram Brewery site and the nearby Buckhold 
     Road offices in Wandsworth, South West London (the 'Wandsworth sites').


The merger will create a major new force in UK brewing, operating from a modern
and efficient brewery in Bedford, with a growing portfolio of speciality cask
ales and lagers and sufficient scale to compete at a national level.


Key brands will include Wells Bombardier English Premium Bitter, Young's Bitter,
Wells Eagle IPA, Young's Special, Waggledance, Kestrel Lager, Kirin Ichiban
lager and Red Stripe Lager. Wells & Young's will also be the sole UK distributor
of Corona Extra, the world's fourth largest beer brand.



The resolution of Young's future brewing operations should facilitate the
Board's ability to finalise a sale of the Wandsworth sites. The Board is in
advanced discussions with respect to the disposal of the Wandsworth sites,
however, there is no certainty that these current discussions will result in a
transaction. A further announcement on this will be made in due course.


Commenting on today's announcement, Young's Chief Executive, Stephen Goodyear
said:


'We are pleased to be able to announce the resolution of our brewing review and
bring to an end the uncertainty that has surrounded our business for the past
two years. The creation of Wells & Young's brings together two complementary
brewing businesses with unrivalled brewing heritage. Having resolved our brewing
options, we can concentrate on completing the sale of the Wandsworth sites,
which would unlock substantial capital to continue to build Young's high quality
pub estate and enhance shareholder value.


'Young's will continue to be a vertically integrated business with a substantial
interest in a modern and efficient brewery. At the same time, this deal will
enable us to make a step change in the financial performance of the Company.


'Importantly, Young's beers will continue to be available in all Young's pubs
and to all Young's customers. We believe this is the best outcome for the
Company, for customers, for employees and for shareholders.'


Paul Wells, Managing Director of Charles Wells added:


'We are delighted to be teaming up with such a prestigious and historic business
as Young's. The merger of our respective brewing interests creates a significant
new force in UK brewing, with strong and growing cask ale brands, operating out
of one of the UK's most modern breweries. We look forward to a long and
profitable partnership between the two companies.'


John Young, Chairman of Young's concluded:


'The decision to sell the Ram Brewery site in our 175th year was taken with some
reluctance, for mainly nostalgic reasons, but as I promised when we first
announced that we were launching the brewing review in 2003, my head has ruled
my heart. I thoroughly support the decision to sell the sites and the merger of
our brewing interests with Charles Wells, which takes Young's forward into the
next stage in its history.'


Enquiries:

Young's
Stephen Goodyear                     Today: 0207 357 9477
Peter Whitehead                      Thereafter: 0208 875 7000

JPMorgan Cazenove                    0207 588 2828
Roger Lambert
James Mitford

Hogarth Partnership
James Longfield                      0207 357 9477




An analyst meeting has been arranged for 11:30 today. Please contact Hogarth
Partnership for details



Photographs are available from Hogarth Partnerhsip





JPMorgan Cazenove Limited, which is authorised by the Financial Services
Authority, is acting exclusively for Young's and no-one else in connection with
the transaction and will not be responsible to anyone other than Young's for
providing the protections offered to clients of JPMorgan Cazenove Limited or for
providing advice in relation to the transaction.



                         Young & Co.'s Brewery, P.L.C.


Conclusion of review and
brewing merger with Charles Wells Ltd.



The Board of Young & Co.'s Brewery, P.L.C (the 'Company' or 'Young's') announces
that it has concluded its review of the options for the Ram Brewery site and
future brewing alternatives, originally announced in November 2003.


The outcome of this review is:

     
-    the merger of Young's brewing, beer brands and wholesale operations with 
     the brewing assets, including the freehold site of the Eagle Brewery, beer
     brands and wholesale operations of Charles Wells Ltd. ('Charles Wells') to 
     form a new brewing business to be called Wells & Young's Brewing Company 
     Ltd. ('Wells & Young's')(the 'Transaction');

     
-    following an additional subscription for shares in Wells & Young's by 
     Young's at a cost of £10m, the proceeds of which will be used to repay a 
     £10m loan to Charles Wells, Young's will hold a 40% stake in Wells & 
     Young's, with the remaining 60% being held by Charles Wells; and

     
-    a proposed sale of the 5.5 acre Ram Brewery site and the nearby Buckhold 
     Road offices in Wandsworth, South West London (the 'Wandsworth sites').


The resolution of Young's future brewing operations should facilitate the
Board's ability to finalise a sale of the Wandsworth sites. The Board is in
advanced discussions with respect to the disposal of the Wandsworth sites,
however, there is no certainty that these current discussions will result in a
transaction. A further announcement on this will be made in due course.


Background to the Transaction:


The publication of the Mayor's Draft London Plan, in July 2003, identified
Wandsworth Town Centre as a key area for regeneration. Together with
Wandsworth's own Local Plan Review, this raised the possibility of the Ram
Brewery site being included within a zoning which would provide for alternative
land use. Following this, the Board of Young's ('the Board') announced on 27
November 2003 that it had entered into discussions with Wandsworth Borough
Council regarding its future development plans for Wandsworth Town Centre,
including the Wandsworth sites.


Since these discussions, the Board has conducted a comprehensive assessment of
the development potential of the Wandsworth sites and its future brewing
options. Throughout this process the Board has received strong interest in the
potential of the Wandsworth sites from property developers. In addition, as a
result of the Board's review, it is clear that the age, layout and location of
the Ram Brewery made it uneconomic to invest in improving the structure and
efficiency of its operation.


In considering its future brewing options, the Board has examined a wide range
of potential alternatives, including building or acquiring an alternative
brewery, a JV or merger of its brewing operations with another brewer, contract
brewing and ceasing brewing.


Reasons for the Transaction:


The merger of the respective brewing, beer brands and wholesale operations of
Young's and Charles Wells creates a major new force in brewing, operating from a
modern and efficient brewery, with a growing portfolio of speciality cask ales
and lagers and sufficient scale to compete at a national level.


Young's will remain a vertically integrated business, with a significant
interest in the future of Wells & Young's, which ensures that Young's beers will
continue to be brewed to the high standards expected and will be available in
all Young's pubs and to all Young's customers. The Board continues to believe
that the provision of Young's beer brands to its retail estate is an important
differentiating factor with significant consumer attraction.


The Board believes that the merger of its brewing interests with Charles Wells
and the planned disposal of the Wandsworth sites will drive a step change in the
Company's financial performance.


Following the Transaction, the Board's focus will be on:

     
-    completing the disposal of the Wandsworth sites;


-    accelerating the development of, and continuing to improve the returns on, 
     Young's high quality retail estate; and


-    maximising the profitability of the enlarged brewing business in 
     partnership with Charles Wells.


Financial impact of the Transaction:


In the year ended 1 April 2006, Young's brewing and wholesale business generated
an EBITDA of £3.2m and an operating profit before exceptionals of £0.9m on sales
of £50.4m. The net book value of the Wandsworth sites is £11.3m as at 1 April
2006 and there are £13.4m of additional assets connected to the wholesaling
activities on those sites which will be no longer needed by the Company.


The cost savings for the continuing Young's retail business following the
transfer of the wholesaling operations from the Ram Brewery site, together with
improved beer purchasing terms, are expected to result in an annualised net
positive impact on profits of at least £2.5m from completion on 1 October 2006.


Young's will additionally benefit from its 40% share of the profits of Wells &
Young's, which is expected to be a highly efficient brewing business with a
strong portfolio of speciality cask ale and lager brands. In the last financial
year, pro forma own brewed volumes of around 400,000 barrels, together with
significant contract brewing and wholesaling volumes, give it the scale to
compete at a national level and make it one of the largest speciality brewers in
the UK.


The pro forma financials of Wells & Young's will be augmented by significant
synergies from improved economies of scale - although the full impact of these
will not be felt until the year ended September 2008.


The one-off cash costs relating to the brewing merger, the Ram Brewery closure
and the assumed sale of the Wandsworth sites, are forecast to be in the region
of £8.0m, the majority of which will be incurred by Young's in the current
financial year.


The Board is confident that earnings in the year to 31 March 2008, the first
full year, will be substantially enhanced* as a consequence of the Transaction.


Wells & Young's:


Wells & Young's is a new company, created from the merger of Young's brewing,
beer brands and wholesale operations with the brewing assets, including the
freehold site of the Eagle Brewery, beer brands and wholesale operations of
Charles Wells.


Following an additional subscription for shares in Wells & Young's by Young's at
a cash cost of £10m, which will be used to repay a £10m loan to Charles Wells,
Young's will hold a 40% stake in Wells & Young's, with the remaining 60% held by
Charles Wells.


Wells & Young's will be based at the Eagle Brewery in Bedford and will commence
trading on 1 October 2006. It will be responsible, amongst other things, for
brewing, packaging, warehousing and wholesale activities.


Jim Robertson, Master Brewer of Charles Wells, will be Production Director, with
Ken Don, Young's Head Brewer, retained as a full-time consultant until his
retirement.


It is intended that, following the completion of taste matching and product
quality trials over the summer, Young's will have transferred all of its brewing
and wholesale activities to the new company by 1 October 2006. Distribution and
warehousing will remain at Wandsworth until its relocation to a new satellite
depot in late 2007. All remaining Young's staff and corporate functions,
including the managed houses and tenanted estate managers, will be relocated in
2007 to a new head office in Wandsworth.


Information on brands and brewing assets to be contributed by Young's


The Young's assets to be contributed comprise its brewing activities, including
certain specialist brewing equipment, its beer brands and wholesale operations,
including Cockburn and Campbell. The core beer brands, which will be licensed in
perpetuity to Wells & Young's, include Young's Bitter, Young's Special and
Waggledance as well as its range of bottle conditioned ales.


In the year ended 1 April 2006, Young's brewed over 167,000 barrels of beer
including 106,000 barrels of owned beer brands, of which Young's Bitter
accounted for 46,000.


Information on brands and brewing assets to be contributed by Charles Wells


Charles Wells will contribute its own and licensed beer brands, together with
the freehold and assets of the Eagle Brewery. Located in Bedford, the Eagle
Brewery was built in 1976 and has been well maintained through significant
investment since this date. The brewery site occupies 16 acres.


Charles Wells' owned brand portfolio, which will be licensed to Wells & Young's
in perpetuity, includes its flagship premium ale brand, Wells Bombardier, which
in the year ended September 2005 was the fastest growing premium cask ale in the
UK.


Other brands include Wells Eagle IPA Bitter, John Bull Bitter and Kestrel lager
(acquired from Scottish & Newcastle in 2005), together with a variety of other
speciality and seasonal ales.


In the financial year ended September 2005, Charles Wells brewed around 300,000
barrels.


In addition, Charles Wells has the UK distribution rights for Corona Extra, the
fast growing Mexican lager and the world's fourth largest beer brand. This has
been imported under licence from its brand owner Grupo Modelo since 1996.
Charles Wells also has the rights to brew and market Red Stripe Lager (the
popular Jamaican beer brand which is owned by Diageo plc) and Kirin Ichiban
lager which is owned by the Kirin Brewery Company in Japan. All these licensed
brands will be transferred to the new company and are subject to renewal in the
ordinary course.


On a historical cost basis, the brewing and brands business (including the
freehold interest of the Eagle Brewery site) had net operating assets of £15m as
at 30 September 2005. These assets were not operated as a separate entity within
Charles Wells and therefore have not previously been reported on. While
dependent on subjective assumptions, the Charles Wells directors estimate in the
year ended September 2005 that the sales and operating profit attributable to
these assets were £128m and £2m respectively.


Supply Agreements


Young's (which has a managed and tenanted estate of 208 pubs and inns) and
Charles Wells (which has a managed and tenanted estate of 245 pubs) have both
entered into exclusive three year rolling supply agreements with Wells & Young's
for the supply of beverages to their respective pub estates. The parties have
agreed to an initial two year period in which notice cannot be given (therefore
the first date at which the supply agreement could be terminated is October
2011).


The Board believes that the pricing of the supply agreement is in line with
market rates, which for Young's is an improvement on the historic transfer
prices operating between the Young's retail estate and its wholseale operations.


Shareholder Agreement


Charles Wells and Young's will have the right to appoint 60% and 40% of the
Board of Wells & Young's respectively. Initially, the Board of Wells & Young's
will consist of Stephen Goodyear and Peter Whitehead from Young's and Paul
Wells, who will be Chairman, and Roger Ashworth from Charles Wells, together
with a strong brewing management team selected from the existing Charles Wells
business led by Nigel McNally, who will be Managing Director.


Both Young's and Charles Wells have vetoes over certain significant Wells &
Young's matters including, inter alia, material changes to the business,
material transactions or agreements and material changes in its capital
structure.


Both shareholders' holdings are subject to a two year lock up agreement. In
addition, in the event of a change of control of either shareholder, the other
shareholder will have the right, but not the obligation, to acquire the balance
of the issued share capital at a value determined by a formula. In the first
five years, the equity value of Wells & Young's on a change of control would be
not less than £75 million.


Wells & Young's will be setting up a new defined benefit pension scheme for
employees transferred to the new company. This scheme will be fully funded from
the outset by the two shareholders, in proportion to their respective employees
joining the new company.


It is intended that 80% of the profits of Wells & Young's, after pension
contributions, will be distributed to shareholders as dividends each year.



* This statement should not, however, be interpreted to mean that the Young's
consolidated earnings per share will necessarily be greater than those for any
preceding financial period.



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