Australia's second biggest brewer Lion Nathan Ltd. announced on May 11 it is in advanced talks with Dutch-listed beer giant Heineken NV about creating an Australian joint venture to make and distribute premium beer. Lion Nathan said it released a statement confirming the talks in response to market speculation, according to Reuters. "In the event that an agreement is reached, Lion Nathan will immediately notify the Australian and New Zealand stock exchanges," Lion Nathan said in response to market speculation. Lion Nathan shares hit a record high of A$6.36 after the announcement, a gain of 2.1 % on the day in a just weaker overall market by mid-afternoon.

In Amsterdam, Heineken spokeswoman Veronique Schyns confirmed that the Dutch brewer is in talks on a joint venture with Lion Nathan but said she couldn't say when the companies are expected to conclude the discussions, according to Dow Jones. She confirmed that the two are discussing cooperating in the manufacture and distribution of premium beers.

Lion Nathan's core business is brewing in Australia and New Zealand, where its major brands are Tooheys, Hahn and Steinlager. Areas targeted for growth are its China beer business and its small premium wine unit. Heineken, whose brands include Amstel, Tiger and Murphy's, operates in 170 countries, and is the world's third-largest brewer by volume.

Lion Nathan said on May 10 it had sold 41 pubs in Victoria state and said it would take a A$34 million ($24 million) write down as the sale price was below book value. The pubs without gaming machines were bought between 1999 and 2003 as Lion Nathan sought to build its share of the beer market in Victoria, Australia's second-most populous state and home of bigger rival Foster's Group Ltd.

Lion Nathan is due to report its first-half results on May 18, with analysts expecting a flat profit of around A$111 million before one-offs. ($1=A$1.44)

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