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Heineken silent on Finnish sale tattle but confirms JP Morgan strategic review link

By Ben Bouckley+

05-Feb-2013
Last updated on 05-Feb-2013 at 13:40 GMT

Heineken's Finnish business Hartwall is PepsiCo's Finnish licensee
Heineken's Finnish business Hartwall is PepsiCo's Finnish licensee

Heineken has confirmed to BeverageDaily.com that it is working with JP Morgan as it begins a strategic review of its Finnish business, and PepsiCo licensee, Hartwall but refused to comment on rumors of a potential $788m sale.

Dutch brewer Heineken announced the strategic review yesterday – which it expects to finish by the end of 2013 – and said it would evaluate options to drive growth for Hartwell, either within Heineken or without.

UK newspaper The Sunday Times ran a business ‘digest’ story Sunday claiming that Heineken had appointed bankers JP Morgan & Chase to oversee a £500m ($788m) sale of Hartwall, with buyout firms expected to lead suitors.

Asked about these rumors, Heineken Spokesman John-Paul Schuirink told BeverageDaily.com this morning: “I can confirm that we’re working with JP Morgan on this, as part of the strategic review, but I’m not going to confirm any of the details that were included in The Sunday Times article.”

PepsiCo licensee in Finland

Heineken acquired Hartwall when it took over UK brewer Scottish & Newcastle in 2008 – in a 7.8bn joint bid with Carlsberg that led to a subsequent asset split – and claims the firm (which has around 850 staff) has strong market positions in beer, ciders, waters, long drinks and carbonates.

Schuirink confirmed that Hartwall has a licensing agreement with PepsiCo to manufacture and sell its brands (7UP, Mountain Dew, Pepsi) in Finland. Local beer brands include Lapin Kulta, Sininen and Karjala.

Asked in broad terms how Hartwall was performing, Schuirink said: I don’t want to go into that. First of all, we are on a silent period, before our results. Also, we do not break out performance on a country by country basis.”

He added: “What I can say is that the business is profitable and has a solid performance, so it’s by no means a business that is in distress or anything. It’s a solid and profitable business.”

Was it possible that Heineken might consider, say, a partial divestiture, and keep specific brands?

“We’ve just embarked on the strategic review, and we’ll keep our options open. Whether inside or outside of Heineken, there’s no foregone conclusion on these things,” Schuirink said.

SAB Miller, Diageo, Gruppo Campari, Pernod…

In other business news, SAB Miller said its Chinese JV China Resources Snow Breweries had agreed to buy Kingway Brewery Holdings for $864m subject to shareholder and regulatory approvals; the firm sold 9.3m hectoliters of beer in 2011.

“The brewery business comprises seven breweries, four of which are in one of China’s fastest-growing and most affluent regions, Guangdong province, with breweries also in the growing Sichuan and Shaanxi provinces and Tianjin municipality,” SAB said.

In other news today, Diageo finally gained regulatory clearance from the Securities and Exchange Board of India (SEBI) for its open offer to take a 26% share in United Spirits, although the deal still awaits clearance from the Competition Commission of India (CCI).

Meanwhile, Gruppo Campari has sold liqueur brand Punch Barbieri to Distillerie Moccia for €4.45m, and expects the deal to close on March 1 2013.

Pernod Ricard is also active on the M&A front, announcing that subsidiary Martell & Co. was in exclusive talks with privately owned French cognac maker Maine au Bois.

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