Nigeria: Heineken N.V. announced on November 29 that it has reached an agreement in principle with a co-shareholder to increase its stake in Nigerian based Consolidated Breweries from 24% to a controlling stake of 50.05%.
The acquisition will be financed from available cash resources. As agreed by both parties the acquisition price will not be disclosed. The investment will be immediately earnings accretive and value accretive in 2008. The deal is subject to a satisfactory outcome of due diligence and obtaining regulatory approval.
Consolidated Breweries was incorporated in 1980. It has a 9.5% market share in Nigeria and is the number three brewer in the domestic beer market, employing 1050 people, with a turnover of Euro 40.5 million, EBITDA of Euro 15.4 million and EBIT of Euro 13.5 million in 2003. Together with the main brand "33" Export, which is brewed under license, and the Hi-Malt brand, Consolidated Breweries covers the low price segment of the beer market and operates two breweries, in Ijebu-Ode, south-west Nigeria and in Awo-Omamma, south-east Nigeria. The sales volume in 2003 was 965,000 hectolitres.
Jean Francois van Boxmeer, Member of the Executive Board of Heineken N.V. commented: "We have been very pleased with the performance of Consolidated Breweries. This controlling stake further strengthens our number 1 position in Africa's second largest beer market and shows our commitment to expand in those markets that will enhance both volume and value."
Currently Heineken also owns a 54.2% controlling stake in the premium-orientated Nigerian Breweries Plc, which has a 56% market share in Nigeria with volumes in 2003 of 5.7 million hectoliters and a broad portfolio of international and local brands, including Heineken and Amstel.
Consolidated Breweries and Nigerian Breweries will continue to operate as separate entities, focusing on different segments of the beer market.
The Nigerian beer market amounted to 10.2 million hectolitres in 2003. In the coming years, Heineken expects the Nigerian beer market to grow on average by 3% per annum.
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