Heineken Emerging Market Growth to Counteract Stalling Developed Economies

In a great case study showing the shifiting axis of global business, Heineken is pursuing an aggressive strategy to build presence in emerging markets to bolster lack of growth options in developed economies. Beginning with the purchase of  five breweries in Nigeria and two in Ethiopia this year, Heinken also spent 5.3 billion euros buying Fomento Economico Mexicano SAB in April 2010 to expand in Latin America.

Then earlier this month, according to Bloomberg, Heineken are seriously considering a bid for Brazil’s second largest brewer, Schincariol - with 2 billion euros ($2.9 billion) in funding for debt refinancing and acquisitions already secured.

See full press release from Bloomberg below:

Heineken Said to Be Considering Bid for Brazil’s No. 2 Brewer Schincariol

Heineken NV (HEIA), the world’s third-largest brewer by volume, is considering making an offer for Brazil’s Primo Schincariol Industria de Cervejas e Refrigerantes SA, according to two people familiar with the matter.

Heineken, which sells beers including Amstel, is going through the books of closely held Schincariol, Brazil’s second- largest brewer behind Anheuser-Busch InBev NV, said the people, who declined to be identified as the process is confidential.

Schincariol controls about 11 percent of Brazil’s beer market, according to Nielsen data, while AB InBev has a share of about 70 percent. The brewer is for sale for about $2 billion, the Sunday Times reported last month. Heineken said yesterday it got a 2 billion-euro ($2.9 billion) credit line to refinance debt and back acquisitions.

Amsterdam-based Heineken is among brewers seeking to expand in emerging economies as weak consumer confidence and increasing competition stymie growth in Europe and the U.S. The company bought five breweries in Nigeria and two in Ethiopia this year, and spent 5.3 billion euros buying Fomento Economico Mexicano SAB in April 2010 to expand in Latin America.

Heineken brews beer through a partnership with Cervejarias Kaiser SA in Brazil, the world’s third-largest beer market by volume, according to data from Mintel International.

SABMiller Plc (SAB), the world’s second-largest brewer, may also be interested in bidding for Schincariol, the Sunday Times said last month, without saying where it got the information. Nigel Fairbrass, a spokesman for the London-based maker of Grolsch and Peroni, declined to comment today.

Schincariol declined to comment, according to an e-mailed statement from FSB Comunicacoes, a communications company representing the Brazilian beermaker.


This article was written by Christian Pielow from the Association of Executive Search Consultants (AESC).

BlueSteps is the exclusive service of the AESC that puts senior executives on the radar screen of over 6,000 executive search professionals in over 70 countries. Be visible, and be considered for up to 50,000 opportunities handled by AESC search firms every year. Find out more at www.BlueSteps.com.

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