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.
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)