Heineken to buy Femsa beers
By Toby Sterling |
January 12, 2010, Tuesday
|
Print Edition
Print Edition
HEINEKEN NV is to buy the beer-making operations of Mexico's Femsa in an all-share deal that values the maker of Dos Equis, Tecate and Sol beers at US$5.5 billion, excluding debt, it said yesterday.
Heineken said the purchase cements its position as the world's second-largest brewer by sales, will help it grow in Mexico and Brazil, and will strengthen its position in the United States imported beer market.
Femsa Cerveza had sales of 2.6 billion euros (US$3.8 billion) and operating profits of 618 million euros in 2008, Heineken said. Including debt, the deal is worth US$7.6 billion.
"Through this deal we become a much stronger, more competitive player in Latin America, one of the world's most profitable and fastest growing beer markets," said Heineken Chief Executive Officer Jean-Francois van Boxmeer.
Shares rose 4 percent to 34.25 euros in Amsterdam.
The acquisition is Heineken's second major buy in the past two years. It bought Scottish & Newcastle operations worth 10.2 billion euros in May 2008. Heineken still trails Anheuser-Busch InBev SA as the largest brewer by sales, and leads SABMiller Plc.
Many analysts had expected SABMiller to win the race to buy Femsa, though Heineken already owned 17 percent of Femsa's Brazilian operations and had a deal to distribute its brands in the US.
Heineken said it expects the deal to close in the second quarter, pending approval from regulators and shareholders.
Under the deal, Femsa will take a 12.5 percent stake in Heineken NV and a 14.9 percent stake in its parent, Heineken Holding NV. Those shares are valued at US$5.5 billion, and Heineken is assuming Femsa debt and pension obligations of US$2.1 billion.
Heineken said the purchase cements its position as the world's second-largest brewer by sales, will help it grow in Mexico and Brazil, and will strengthen its position in the United States imported beer market.
Femsa Cerveza had sales of 2.6 billion euros (US$3.8 billion) and operating profits of 618 million euros in 2008, Heineken said. Including debt, the deal is worth US$7.6 billion.
"Through this deal we become a much stronger, more competitive player in Latin America, one of the world's most profitable and fastest growing beer markets," said Heineken Chief Executive Officer Jean-Francois van Boxmeer.
Shares rose 4 percent to 34.25 euros in Amsterdam.
The acquisition is Heineken's second major buy in the past two years. It bought Scottish & Newcastle operations worth 10.2 billion euros in May 2008. Heineken still trails Anheuser-Busch InBev SA as the largest brewer by sales, and leads SABMiller Plc.
Many analysts had expected SABMiller to win the race to buy Femsa, though Heineken already owned 17 percent of Femsa's Brazilian operations and had a deal to distribute its brands in the US.
Heineken said it expects the deal to close in the second quarter, pending approval from regulators and shareholders.
Under the deal, Femsa will take a 12.5 percent stake in Heineken NV and a 14.9 percent stake in its parent, Heineken Holding NV. Those shares are valued at US$5.5 billion, and Heineken is assuming Femsa debt and pension obligations of US$2.1 billion.
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