News briefs: Heineken goes Swiss; SABMiller

By Neil Merrett

- Last updated on GMT

Related tags Molson coors Management occupations Molson coors brewing company Sabmiller

This week, Heineken prepares to expand within the Swiss beer
market, and SABMiller and Molson Coors begin to finalise
integrations plan for their US joint venture.

Heineken plots Swiss beer growth ​Heineken has today announced plans to acquire the beverage division of Switzerland-based Eichhof Holding for €176m, in a bid to extend its presence in the country. The brewer said that by acquiring the assets, it hoped to extend its beer market share in the country's to 23 per cent, consolidating its position as the country's second largest brewer. Didier Debrosse, Heineken's regional president for Western Europe said the deal would help significantly improve its operations in the country. "The combination of Heineken and Eichhof's complementary brand portfolios with our commercial, operational and logistics best practices will drive growth,"​ he stated. "We acknowledge the strong local roots of Eichhof and the typical Swiss Eichhof brand will play an important role in the combined portfolio." ​ Eichhof's brewery division employs 450 staff and operates its own brewery in Lucerne, which ahs a maximum production capacity of 400,000 hectolitres. Eichhof currently holds a 10 per cent stake of the Swiss beer market as a result, Heineken says. Along with beers, the brewer also hopes to acquire Eichhof's non-alcoholic drinks and wine operations. Heineken says that an offer is expected to be launched on 7 May this year and will be funded from existing credit facilities. SABand Coors brace forUSjoint venture ​SABMiller and Molson Coors yesterday appointed two new executives to the board of their planned cost-saving joint venture in the US beer market. Tim Wolf was named as chief integration officer (CIO) for MillerCoors, while Gavin Hattersley will serve as chief financial officer (CFO) for the enterprise. Although the deal, which would also combine both parties' Porto Rican operations, is still in the process of undergoing an antitrust review in the country, the joint-venture's proposed chief executive officer Leo Kiely said appointing the positions early was vital. "We felt it was critical to designate the CFO and CIO roles now in order to facilitate the planning process and allow us to hit the ground running upon close,"​ he stated. In their respective roles, Hattersley will take control of the financial management for the joint venture, while Wolf will be responsible for ensuring integration of the two companies within a proposed budget of $500m (€315m), the companies jointly stated. On first announcing the plans back in October last year, Molson Coors vice chairman Pete Coors said the move was directly related to the challenge currently facing beer production within the US, both from its rivals and in changing consumer demands. Both SABMiller and Molson Coors will hold equal voting rights in the partnership, though their economic interests will vary between 58 per cent and 32 per cent respectively, to reflect the individual value of the contributed assets. SABMiller claims that the joint venture's combined portfolio of brands including Peroni, Miller, Molson and craft beers like Leinenkugel's can offer better returns on marketing expenses. MillerCoors will also be more flexible in brand building and product and packaging innovation, helping to compete with both domestic and global large-scale rivals, SABMiller says. Besides expanding the two companies' brand portfolios, the merger is also expected to generate $500m (€315m) worth of savings in annual costs by the end of the third full year of combined operations, according to SABMiller. These savings will come from optimising production output by combining brewery networks and reducing shipping distances, while also moving to eliminate identical corporate and marketing services. The venture will be headed by Molson Coors vice chairman Pete Coors, while SABMiller's chief executive officer serves as vice chairman. Molson Coors chief executive officer Leo Kiely will retain the same position in joint venture with Miller's Tom Long becoming the group's president and chief commercial officer.

Related topics Manufacturers Heineken

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