Heineken N.V. announced on Thursday that it has completed the acquisition of Brazil Kirin Holdings S.A. from Japanese brewer Kirin Holdings Company, Limited.
“The closing of the transaction follows fulfilment of all conditions precedent as agreed on 13 February 2017, when HEINEKEN announced it had entered into an agreement to acquire Brasil Kirin,” Heineken said in a statement.
Heineken N.V said on Monday it has agreed to acquire the loss making business of Japanese brewer Kirin Holdings Limited Brazil unit for $706m. Including debt, the Dutch brewer said it would pay €1.025bn for the transaction.
Kirin said it was exiting the Brazilian beer market citing a “stagnant and competitive” market.
“Considering various risks associated with (the) Brazilian economy and (the) stagnant and competitive situation in (the) Brazilian beer and soft drink markets, Kirin has come to the conclusion that there are certain limitations in transforming Brasil Kirin into a sustainable and high-profitable business on its own,” it said in a statement.
Dutch brewer Heineken N.V. said it is in discussion with Japanese brewer Kirin Holdings to acquire the company’s unprofitable Brazilian business. The Nikkei Newspaper reported on Friday, a price of $870m, a fraction of the $3.9bn Kirin paid for the business.
An acquisition of Kirin’s lossmaking business in Brazil would give Heineken 19% market share in a country where it currently has only 7% share of the market to Kirin’s 12%. But more importantly, it would enable the Dutch brewer pose a stronger challenge to AB InBev, which dominates the market with 67% market share.
This article was first published in the Financial Mail, a South African publication and authored by Ann Crotty. We have edited parts of the original story but give credits to the author and the folks at Financial Mail.
To get a better understanding of how Anheuser-Busch InBev (AB InBev) became the world’s largest beer company, it helps to look back to the 1970s – a period when marketing departments held sway in beer companies.
Anheuser-Busch InBev, said unfavorable currency effects, one-off financing costs and weak business in Brazil, one of its biggest markets caused earnings in the first quarter to fall 10%.
The maker of Stella Artois, Budweiser, Corona, among others, said that revenue for the quarter fell 10% to $9.4bn, from $10.453bn a year earlier.
