When Dutch brewer Heineken announced its first half results last week, analysts said the figures were presentable but what they really wanted to see was acquisitions. Well, that is exactly what they got - in a little under a week, the company has announced the acquisition of ABC in Egypt, two joint ventures in Central America and now the takeover of the Lebanese brewer Almaza.
To be fair to Heineken, it did say that it was looking for acquisitions in Africa and Latin America as part of its growth strategy, but nobody really expected to see so much activity in such a short space time - who knows who else the Dutch will have bought by the end of the month.
Heineken has held a 10 per cent stake in Almaza for the last 42 years, and will now add a further 69 per cent following an agreement with the company's majority shareholders. The company did not say how much it would pay for the stake.
The acquisition follows much the same pattern as the other deals announced by Heineken during the past week - increasing a stake in a company with which the Dutch group has already worked in the past and which has a strong position in an emerging market. Heineken said that the acquisition would also give it a strong based from which to export its beer to other countries in North Africa and the Middle East.
"We believe that in the long term Africa will be a good continent for the beer business. Since Heineken has always had a long-term strategy, we are convinced that there is still enough growth potential," said Jean-Lou Home, Heineken's director responsible for Africa and the Middle East.
This long term strategy is clear - Heineken's presence in Africa dates back more than three-quarters of a century, with local production beginning in a very small way in the 1920s and growing to 13 countries today (excluding the new acquisitions). The group sells 9 million hectolitres of beer in Africa each and a market share of 14.3 per cent, making it the second largest brewer on the African continent after SABMiller. It is also a major manufacturer of soft drinks (and its two new additions on the continent will add to that) and the largest exporter of beer to Africa.
The population of Africa drinks around 9 litres of beer per capita per year, compared to 21 litres as a world average, with low purchasing power the main reason for the difference, Heineken said. But the group clearly sees this as a short term problem, and while Africa's economic problems will certainly not be cured overnight, the Dutch firm is obviously confident that an upturn will come eventually.
Almaza is the sole brewery in Lebanon and has a 61.5 per cent market share, with all the rest of the market taken up by imported brands, around a third of which are Heineken and Amstel. As well as its Almaza beer brand, the company produces an alcohol free beer under the same name and two fruit-flavoured malt drinks. The deal includes the brands, brewing facilities and distribution network.
The acquisition will be financed from Heineken's cash resources and will immediately contribute to the company's net profit. The question is now - where will the company go for its next acquisition?