Another American buy for Heineken
strategic alliance with Costa Rican brewer FIFCO. The two companies
have joined forces with soft drink bottler Panamco to buy Baru, one
of the leading brewers in Panama.
When Dutch brewer Heineken announced its half-year results in September, it also said that it was looking at a number of potential acquisitions in the Americas and Africa.
Since then, it has been as good as its word, announcing two acquisitions - Al Ahram Beverages in Egypt and Almaza in Lebanon - and a strategic alliance with FIFCO in Costa Rica.
Now it has returned to Central America with the announcement that it is to make an offer for the Panamanian brewer Cervecerias Baru. The bid for Baru will be made jointly with FIFCO, with whom Heineken already works in both Costa Rica and Nicaragua.
Heineken said that 52 per cent of Baru's shares were currently held by Coca-Cola Panama (CCP), the sole Panamanian Coca-Cola bottler. The remaining 48 per cent of is traded on the Panamanian Stock Exchange.
In order to complete the deal, Heineken and FIFCO have joined forces with Panamco (the largest soft drink bottler in Latin America) to form CA Beverages (CAB), which has already taken control of CCP (and thereby indirect control of Baru) through the purchase of 3.9 million newly issued shares in CCP.
The next step will be public offers for the remaining shares of Baru and CCP, Heineken said in a statement. After the public offers, Heineken will take 75 per cent of the shares from CAB, with FIFCO holding the remaining 25 per cent. IN return, Panamco will take 100 per cent control of the CCP.
Heineken said it was offering $14.60 (€14.77) per share for Baru, putting the total cost of the deal at $56 million if all shares are tendered. The acquisition of CCP will cost $61 million, again if all shares are tendered. The tender offers will commence as soon as possible, and in accordance with Panamanian law, will remain open for a minimum of 30 days, the Dutch brewer said.
The two offers have the full support and commitment of the management of both Baru and CCP, and will be carried out in full consultation with the Panamanian Stock Exchange authorities. Heineken will finance the transaction from its available cash resources and expects the acquisition to contribute to its net profit after two years.
Baru has a 25 per cent market share in Panama, which accounts for 350,000 hectolitres of the total beer market. The company owns two breweries: one in Panama City and the other in David (Chiriqui province). Baru has three main brands - Soberana, Panama and Cristal - and the company employs approximately 650 people. Its sales in 2001 reached $26 million.
Heineken said that it believed there was great potential for improving Baru's sales and market share, especially using the local market expertise of its new partner FIFCO. The two companies can now sell around 3.2 million hl of beer each year to the 11.3 million people in Costa Rica, Nicaragua and Panama.
