Sun Rises on Heineken Deal

By Andrew Starke

Heineken has further consolidated the global beer industry by acquiring Mexican brewer Femsa, producer of Sol and Dos Equis, for about A$8.2 billion.

In a move that may have implications for the Australian market, Heineken, the world's third-largest brewer, sealed the deal after London-based SABMiller dropped out of the auction.

Heineken chairman and CEO, Jean-Francois van Boxmeer, said the acquisition would make Heineken a more competitive player in the lucrative Latin American market.

The Dutch company's global beer brands include Heineken, Amstel, Foster's and Newcastle Brown Ale.

Femsa is Latin America's largest drinks firm and is also the seller of Coca-Cola in much of the region. It made its beer arm available to buyers last October.

The deal gives Heineken 43 percent of the growing Mexican beer market while Femsa become the second-largest shareholder in Heineken, with 20 percent of the company.

The transaction also allows Heineken a virtual monopoly of the Brazilian beer market.

Flagship Femsa brand, Sol, is only available in Australia through Woolworth's liquor subsidiaries Dan Murphy’s, BWS and Safeway Liquor Stores.

However this exclusivity may be subject to review as Heineken and Kirin-owned Lion Nathan have a joint venture arrangement in the Australian market.

Contacted by TheShout, both Lion Nathan and Woolworths said it was too soon to speculate on the implications of the sale on the local market.

Sol underwent an aggressive national relaunch in Mexico in 1993 and was the dominant beer brand in that market by 1997.