Brewing giant Scottish & Newcastle today agreed to a £7.8 billion takeover offer from rivals Heineken and Carlsberg.

The European suitors, who have been pursuing Edinburgh-based S&N since October, plan to carve up the business when the deal is completed.

The move is set to call time on more than 250 years for the brewer, which also makes Kronenbourg 1664 and Newcastle Brown Ale.

The group currently has about 3,300 staff in the UK, with breweries in Manchester, Reading, Dunston near Newcastle, and Tadcaster, in North Yorkshire.

The company also owns the Bulmers cider mill in Hereford and has administrative staff in Edinburgh and Staines, Middlesex.

S&N, which also makes John Smith's, has grown to become the world's seventh largest brewer by sales volume since the original William Younger brewery was established in Leith, Edinburgh back in 1749.

William Younger merged with fellow Edinburgh brewer William McEwan to form Scottish Brewers in 1913, before merging with Newcastle Breweries in 1960 to become Scottish & Newcastle.

The deal comes as brewers look to cut costs as input prices for malting barley and aluminium cans have risen and to create a bigger platform for their top brands. It also puts pressure on other brewers such as Molson Coors and Foster's to perform better or look for similar deals, analysts said.

S&N shares rose 2.2 percent to 783p by 9.13am while Carlsberg increased 1 per cent to 563 crowns and Heineken was 2.6 per cent ahead at 41.33 euros.

"Given the compelling strategic rationale, we see the deal as a good one for Carlsberg," said Cazenove analyst Matthew Webb, who added that the deal would also enhance Heineken's earnings in the medium term.

"In a single step we have created the world's fastest-growing global brewer. We now have full control of our destiny in Russia and other BBH territories," said Carlsberg chief executive Jorgen Buhl Rasmussen.

Under the break-up plan, Carlsberg will acquire S&N's 50 percent stake in BBH to give the Danish brewer full control of the brewer of Baltika in the former Soviet Union, and also S&N's interests in France, Greece, China and Vietnam.

Heineken will take over S&N's British business, which includes Strongbow cider and John Smith's beer, along with its operations in other European markets such as Belgium, Portugal, Ireland, plus its United States and India businesses.

The bidders say the approval of the European Commission and other competition authorities will be required and it is expected the deal will be completed in the second quarter.