Diageo makes €600m profit on Heineken deal as Ab InBev ups offer
Published 08/10/2015 | 02:30
Irish-listed drinks giant Diageo has pocketed a near-€600m profit after exchanging several emerging-market brewing assets with partner Heineken.
The Guinness owner is selling its stakes in brewing ventures in Jamaica and South-East Asia to Heineken and buying out the Dutch firm's stake in a Ghanaian drinks company.
As part of the three-part deal Diageo sold its 57.9pc stake in Desnoes & Geddes Ltd., the Jamaican brewer of Red Stripe lager. Heineken is to make an offer for all remaining shares at a later date.
Heineken is to also acquire all of Diageo's stake in Malaysian drinks firm GAPL. Last, Diageo will take Heineken's 20pc stake in Ghanaian drinks business GGBL.
As part of the deal Heineken will pay £515m (€694m) to its UK rival. Diageo said in a statement yesterday that it will realise an after tax profit of £440m (€598m) from the asset swap.
Meanwhile, UK brewer SABMiller yesterday rejected a proposed near-€89bn takeover offer from Belgian giant Anheuser-Busch InBev, the largest brewing company in the world. AB InBev had raised its price to £42.15 a share in cash after two previous offers were rebuffed. A merger would create a beverage empire controlling the No. 1 or 2 positions in 24 of the world's 30 biggest beer markets.
A deal between the two would create the world's biggest beer maker worth more than £180bn. SABMiller's largest shareholder, Altria Group., with a 27pc stake, said that it supported the approach. It urged SABMiller's board to engage "promptly" with AB InBev. Under UK takeover law AB InBev has until October 14 to make a formal offer or it must walk away.