Global Processing

Heineken to buy Mexico''s Femsa for $5.5 billion

January 11, 2010

The Associated Press reports Dutch brewer Heineken NV will buy the beer-making operations of Mexico''s Femsa in an all-share deal that values the maker of Dos Equis, Tecate and Sol beers at $5.5 billion, excluding debt. The buy increases Heineken''s cements its position as the world''s second-largest brewer by sales. It also continues a decade-long trend toward concentration among the biggest players in the global beer market. Femsa Cerveza brands have a 43 percent market share in Mexico and a 9 percent share in Brazil. Femsa''s Tecate and Dos Equis brands are also significant players in the U.S. imported beer market, where Heineken vies with Grupo Modelo''s Corona. Analysts welcomed the buy as a pleasant surprise, given that many had expected SABMiller PLC to win the race for Femsa. Heineken said it expects the deal to close in the second quarter, pending approval from regulators and shareholders. Under the deal, Femsa will take a 12.5 percent stake in Heineken NV and a 14.9 percent stake in its parent, Heineken Holding NV. Heineken''s unusual holding structure allows descendants of the Heineken family to control Heineken NV, and the company said they have agreed to the deal. A trust holding 39 percent of Femsa shares has also agreed, Heineken said.