Marston’s PLC (LON:MARS) has agreed to spin its brewery business into a joint venture with Danish giant Carlsberg.

The Wolverhampton-headquartered company said it will own 40% of the new venture and get a £273mln cash in return, valuing its brewing business roughly £580mln or 13 times underlying profits.

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Its new Copenhagen-based partner will control the other 60% of what will be called the Carlsberg Marston’s Brewing Company, which will own Marston’s beer brands such as Marston’s Pedigree, Banks’s Bitter, Hobgoblin, Brakspear, Shipyard, Bombardier and Wainwright, plus Calsberg Pilsner, San Miguel, Tuborg, Holsten Pils, Tetley’s, Skol and Brooklyn.

The pair expect to generate savings from the combination of about £24mln within three years.

FTSE 250-listed Marston’s said it will use the cash to pay down its debt, which stood at £1.4bn at the end of its September financial year and which the company has been aiming to reduce by £200mln by 2023.

Talks about the joint venture started late last year, the company said, and the deal is expected to complete in before the end of September, subject to shareholder approval and competition clearance.

Marston’s chief executive Ralph Findlay said the deal will allow Marston’s to focus on its pub and accommodation business while retaining a 40% interest “in a larger, more attractive brewing business”.

Shares in the company, which have tumbled due to the closure of the UK’s pubs since 22 March under the coronavirus lockdown, jumped 82% on the news to 59.35p on Friday afternoon, though this is less than half their level at the start of the year.