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Monday 23 January 2017

Heineken gains foothold in Mexico with €5.3bn Femsa deal

Published 12/01/2010 | 05:00

HEINEKEN, the Dutch brewer, secured its position as a global player yesterday after agreeing the €5.3bn acquisition of the beer operations of Femsa, the Mexican drinks and retail group behind the Sol and Dos Equis beer brands.

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The deal, which comes two years after Heineken teamed up with Carlsberg to swallow Scottish & Newcastle, follows the withdrawal of SABMiller, long seen as the favourite in the auction, amid concerns over the Mexican brewer's loss-making Brazilian business.

The takeover is an all-paper transaction that will give the Femsa group a 20pc stake in the enlarged group, making it the second-biggest shareholder after the founding Heineken family, who retain control.

SABMiller and Heineken, the world's second and third-biggest brewers behind Anheuser-Busch InBev, immediately emerged as the two most serious suitors.

The prize for Heineken is a big foothold in Mexico, one of the world's most profitable beer markets.

Heineken is also acquiring Femsa's 83pc stake in Kaiser, the fourth-biggest brewer in Brazil, in which the Dutch brewer already owns the remaining 17pc.

Although Heineken's existing relationship with Femsa gave it a strong hand, it was helped by SABMiller's concerns over Kaiser's losses.

Based on the Heineken share price of €32.925 at Friday's close, the implied equity value of Femsa Cerveza is €3.8bn, or $5.5bn.

It is also assuming net debt and pension obligations of $2.1bn.

Heineken said that it expected the annual cost synergies and savings to reach €150m by 2013.(© The Times London)

Irish Independent

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