Amsterdam-based Heineken N.V announced in October that it would seek a rare fourth, four-year term for its Chief Executive Officer, Jean-Francois van Boxmeer at the company’s next Annual General Meeting set to be held in April 2017.
Mr. van Boxmeer, who started working for Heineken in 1984, would be the second CEO in the company’s history to have had such a long tenure. Only the late Freddy Heineken, the grandson of the company’s founder had a longer tenure.
Analysts say while it is unusual for most publicly traded companies in the Netherlands to give their CEOs such long tenures, it shows that the company is pleased with his performance and wants continuity.
Van Booxmeer, 55, who became CEO in 2005, is credited with transforming Heineken into a global powerhouse and expanding its footprints in fast-growing emerging markets in Latin America and Asia while bolstering its African presence.
With the recent merger of AB InBev and SABMiller, which were the No. 1 and No. 2 brewers in the world, Heineken which used to be No. 3 moves up to the No. 2 position, albeit a distant second. Heineken has 9.2% of the global beer market to AB InBev’s 27% post-merger.
However, with AB InBev’s strong financial strength and its footprint spreading to newer markets, especially in Africa, a long held bastion of the Dutch brewer, analysts say Heineken and Diageo’s Guinness are likely to come under competitive pressure as InBev ramps up its marketing spend.
In response to such scenario, Heineken’s Finance Director, Laurence Debroux, said in August at the company’s half-year trading update, that the merger of AB InBev and SABMiller would not change the industry dynamics of fighting for sales “market by market”.
“We don’t see any fundamental change or attitude. We have a global brand but we’re selling market by market and we don’t see the merger changing that,” she said.
But with increased competition coming from AB InBev, analysts say Heineken might look for more acquisitions, especially in Africa and Asia. However, with the Heineken family wanting to retain control, looking for mergers or acquisitions might prove difficult.