Wolverhampton & Dudley Breweries has agreed to buy smaller rival Jennings Brothers in a £45.8 million takeover deal which has angered real ale buffs.
The Midlands brewer said its 430p per share offer was 32 per cent higher than Jennings' closing mid-market price of 325p per share on April 8, the final day before the two groups disclosed they were in talks.
W&DB said the business of Cockermouth-based Jennings company would fit in well with its existing pub estate and would provide cost savings and operational benefits.
However, campaigners have stepped up their drive to sink the deal.
The Campaign for Real Ale (CAMRA) said its members had voted unanimously to oppose a takeover, and it would use its 1.25 per cent stake in Jennings to try to engineer a rejection by Jennings shareholders.
CAMRA says it fears Jennings's historic Cockermouth brewery could be closed as W&DB seeks to please investors by cutting costs.
"The fate of Jennings does not lie in the hands of an elite of fund managers whose decisions are influenced by purely short-term financial considerations," said CAMRA chief executive Mike Benner.
W&DB, which has bought and then closed breweries in the past, responded by insisting it would keep Jennings' Cockermouth brewery, which makes the latter's flagship Cumberland Ale.
The Wolverhampton-based group said, however, that there would be some job cuts among Jennings' staff.
A W&DB spokesman said: "We are absolutely committed to the brewery because we think it's a strong brand and we want to develop it."
W&DB also said it recognised the "strong and rich heritage of the Jennings brewery operations, its excellent reputation and the local appeal of the beer brands".
W&DB chief executive, Ralph Findlay, said: "We believe our proposals will assist in the further development of the business and provide good opportunities for its lessees, beer brands and employees."
Jennings' chairman John Rudgard said the deal would protect and develop its heritage within a far larger and stronger group.
"We believe W&DB will provide a good home for Jennings," he said.
Jennings runs 128 pubs in northern England and brews a range of traditional beers.
It has 55 leased and tenanted pubs in Cumbria, with 31 in other parts of the North-west and 42 in the North-east and Yorkshire.
W& DB brews Banks's, Hanson's and Mansfield beers in Wolverhampton and Marston's Pedigree ale in Burton-on-Trent.
The agreed deal is subject to acceptance by a majority of Jennings' shareholders.
At the end of 2001, Wolverhampton-based W&DB closed Mansfield brewery in Nottinghamshire, which started brewing in 1855, following its acquisition of Mansfield in November 1999.
Wolves transferred production of Mansfield brands to its Wolverhampton plant.
CAMRA says it fears a repeat of the closure of the Mansfield Brewery.
But Mr Findlay insisted: "That was very different circumstances.
"Mansfield was about a 500,000 barrel-a-year brewery, about three-quarters of which was used up by lowmargin contract brewing."
" Jennings is a 30,000 barrel-a-year operation, and it's all Jennings own brand. Were anyone to close it, you would jeopardise quite a strong local franchise."
The Midlands brewer has expanded rapidly since March last year when it completed a £150 million refinancing to give it a war chest for buying pubs.
It snapped up the 63-strong estate of Wizard Inns for £89.9 million, following it with a deal for Cheshire-based Burtonwood in January.