Heineken gains Mexcian brewing stronghold   

By The Holland Times Tuesday 12 January 2010, 08:01

Heineken is set to take over Mexican brewery, Femsa Cerveza, reports NRC Handelsblad. The 3.8 billion euro purchase will give Heineken a bigger grasp on the Latin American market with future prospects in the United States.

The purchase is the second major acquisition by Heineken over the past few years. In 2008 the Amsterdam-based company bought British Scottish & Newcastle. Heineken’s growth is part of a larger competition among beer giants to gain a stronghold in emerging markets.

Femsa is one of two major brewers in Mexico. As the maker of such brands as Sol, Dos Equis and Tecante, it holds about half of the country’s brewing market. In total, the company produces 35 beer brands and is the world’s larger bottler of Coca Cola products.

In addition to taking over the brewery’s market share in Mexico, Heineken will also inherit the company’s presence in Brazil and its reputation in Latin American and US markets, according to the paper. Heineken’s own brand, Amstel, already has a strong position in the US, but is less popular than other premium brands.

Heineken’s purchase of Femsa is put at 3.8 billion euros, including 1.5 billion euros in debt and pension liabilities the company incurred previously.

The acquisition will be financed through a stock transition that will affect the way the brewery is run. The Mexicans have a 12.5 percent interest in Heineken NV and will be allowed to appoint two commissioners and a member of the board of directors. They will also get a 15 percent interest in Heineken Holding, in which the Heineken family holds a majority. After the acquisition, the Heineken family will retain a majority holding. 

The Amsterdam stock market showed positivity among investors Monday morning, as Heineken gained 4 percent to reach 34.25 euros.