Heineken N.V. enters into agreement to acquire Brasil Kirin Holding S.A. - Seite 2

Compelling strategic rationale
HEINEKEN believes that the transaction delivers compelling strategic benefits for its Brazilian business. In particular it:

• Consolidates HEINEKEN's existing position in the Brazilian market, broadening its reach across the country;
• Strengthens HEINEKEN's platform to accelerate further premiumisation, particularly with Heineken® and Sol; 

Provides significant scale from which to drive future growth. The Brasil Kirin portfolio is highly complementary to HEINEKEN's existing beer business, and will enable further growth of the well-established Schin, Bavaria, Kaiser, Amstel and Devassa brands in the mainstream and value segments; and

Further increases HEINEKEN's exposure to growth from developing markets and will enable HEINEKEN to create long term value as a stronger #2 market player in Brazil.

  
HEINEKEN Brazil is in the process of reviewing its future route to market and will provide further detail when appropriate.

Financial highlights
The total consideration to be paid to Kirin for the shares is EUR 664 million, corresponding to an estimated enterprise value of EUR 1,025 million for HEINEKEN. Upon completion of the transaction Brasil Kirin will be consolidated with HEINEKEN.

Brasil Kirin today reported FY results for the year ended 31 December 2016 with revenue of BRL 3,706 million (2015: BRL 3,698 million) and an operating loss before amortisation of goodwill, etc. of BRL 262 million (2015: BRL 322 million).

HEINEKEN expects to deliver significant cost synergies from the acquisition through production efficiencies, including logistics and brewery optimisation, and through optimising selling, general and administrative expenses.

This transaction is expected to be dilutive to HEINEKEN's margin in 2017. We will provide more detailed transaction guidance including the necessary accounting adjustments when appropriate.  

Completion of the acquisition is subject to customary regulatory approvals and is expected in the first half of 2017.

Commenting on the transaction, Jean-Francois van Boxmeer, Chairman & CEO of HEINEKEN, said:

"This transaction marks a step-change in scale in an exciting beer market, building on our success to date in the premium segment and strengthening our platform for future growth. It reiterates our commitment to the Brazilian market and confidence in our ability to generate attractive returns over the long-term across all segments of the market. I look forward to welcoming our new colleagues from Brasil Kirin into HEINEKEN and working with them to take the combined business forward."