Thu. Jul 18th, 2024

Daniel Palmer for

Dutch brewer Heineken is set to expand their global operations with the purchase of one of the largest beer businesses in Latin America.

The company will buy the beer division of Mexico-based Fomento Econ򬧀o Mexicano, S.A.B. de C.V (FEMSA) for 3.8 billion (USD5.5 billion). The all-scrip deal will see FEMSA receive a 20 per cent in Heineken – the worlds third largest brewer – and two seats on the Board.

FEMSA will continue to operate their other business as a Coca-Cola bottler and convenience store operator.

Approval likely

The Transaction is expected to close in the second quarter of 2010 and is subject to approval of regulatory authorities and shareholders of Heineken, Heineken Holding and FEMSA.

Heineken Holding, the controlling shareholder of Heineken, has committed to vote in favour of the proposed transaction as has LArche Green N.V., the controlling shareholder of Heineken Holding, at the respective shareholder meetings. In addition, the Voting Trust which controls 39% of FEMSA has entered into an undertaking to vote in favour of the Transaction at the FEMSA shareholder meeting.

This is a compelling and significant development for Heineken, Jean-Fran殩s van Boxmeer, Chairman and Chief Executive of Heineken, said. It transforms our future in the Americas and marks the next stage in Heinekens strong association with FEMSA. Through this deal we become a much stronger, more competitive player in Latin America, one of the worlds most profitable and fastest growing beer markets.

The deal will see them gain access to brands like Dos Equis, Tecate and Sol.

FEMSA shares slid on the announcement as traders had been betting on a bidding battle between Heineken and SABMiller, which didnt eventuate as SABMiller were not interested in FEMSAs Brazilian operations, according to Reuters.

However, Jos矁ntonio Fern୤ez Carbajal, Chairman of the Board and CEO of FEMSA, was adamant the deal provided value to shareholders.

We are enthusiastic about this transaction, which allows FEMSAs beer operations to become an integral part of Heinekens leading global platform, he said. In the context of the reconfiguration of the global brewing landscape, scale and geographic diversification are more important than ever, and this transaction responds to that imperative. Heineken presented us with the most compelling opportunity to transform our brewing assets.

By Professor Good Ales

Mythical poster at The LTS Good for What Ales You Beer Journal. Loves good beer. Hates same old, same old. Muses that Bud and Miller might as well be brewed in urinals. Drinks lagers too, if they are complex and interesting.

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