Dutch brewer Heineken has completed its purchase of the beer division of Latin American drinks company FEMSA (Fomento Economico Mexicano).
Heineken is now implementing its strategy to incorporate the new business into its portfolio. The FEMSA Cerveza division – operating primarily out of Mexico and Brazil but with a growing exports business to the United States – will be placed under the remit of John Nicolson within the Heineken Americas region and will be shown in Heineken’s accounts from May 1.
Heineken’s rival SABMiller had been a rival for the acquisition but dropped out of the auction in January, leaving Heineken free to agree a deal worth approximately €5.3 billion ($7.6 billion, £4.8bn). The money will be paid in 115,000,000 shares – made up of 86,000,000 up front and 29,000,000 more over five years – giving FEMSA a 20 per cent holding in Heineken. However Heineken is in the middle of the first phase of a share buy-back scheme, for which €200m ($262m) has been allocated.
The move adds the Dos Equis, Tecate and Sol brands to Heineken’s portfolio as well as allowing it to instil its signature beer into profitable Latin American markets through FEMSA’s existing routes.
The company says it has already installed new management teams in Mexico and Brazil.
“Today represents the start of a new era for Heineken,” said the Dutch firm’s chairman and CEO Jean-Francois van Boxmeer.
“I am delighted to welcome a group of highly talented and ambitious people into the Heineken group and FEMSA as a major shareholder. Their contribution to the future development and continued growth of our business will be significant and we look forward to building our future together.”
Heineken is the world’s second largest brewer in terms of revenue with a €14.70 billion turnover and more than 55,000 employees worldwide.
FEMSA will retain its soft drinks business.