Colombia: Heineken is among companies interested in buying Colombia's Bavaria

Dutch brewing force, Heineken NV, is among companies interested in buying Colombia's Grupo Empresarial Bavaria, Bloomberg commented on April 13. The growing intrest in Comombia market is the declining comsumpiton of beer in emerging markets in the U.S. and Western Europe.

“It's a fair assumption that everyone is looking at Bavaria, including Heineken,'' spokeswoman Veronique Schyns said, citing a comment made by Jean-Francois van Boxmeer, Heineken's newly appointed chief executive officer, to the Wall Street Journal.

Van Boxmeer, the 43-year-old Belgian manager of Heineken's fastest-growing business, will replace Thony Ruys as CEO in October, the Amsterdam-based company said yesterday. The change comes after the brewer of Murphy's Irish stout and Amstel lager said in February profit would decline in 2005 for a second year.

Heineken may come under pressure to pursue acquisitions in developing markets to boost profit, a strategy followed by competitors including InBev NV and SABMiller Plc, as the dollar's decline against the euro and lackluster demand for beer in Europe crimp earnings, analysts said.

Heineken Chief Financial Officer Rene Hooft Graafland told investors in New York last month that the Dutch brewer “wouldn't be interested'' in paying $9 billion for Bavaria, South America's second-largest beermaker, after Reuters said the previous week that Heineken made an offer for that amount.

Bavaria Chief Executive Ricardo Obregon denied March 9 that the company had received any offers, describing reports of bids between $6 billion and $9 billion as ``ridiculous.''

InBev, which last year bought Brazilian brewer AmBev for $11.2 billion, and London-based SABMiller also are interested in Bavaria, people familiar with the matter have said this year. Heineken's biggest acquisition to date is its 1.9 billion-euro ($2.5 billion) purchase in 2003 of Austria's BBAG, a transaction that made it the biggest company in the central European beer market.

The Dutch brewer made 57 percent of its sales in Western Europe last year, compared with 17 percent in central and eastern Europe, 14 percent in the Americas, 8 percent in Africa and the Middle East, and 4 percent in the Asia Pacific region. Heineken's sales dropped 3.2 percent in Western Europe in 2004.

``SABMiller and InBev show stronger growth and have a far more attractive exposure to emerging markets,'' Peter De Neve, an analyst at Petercam in Brussels, wrote in a note to investors today. De Neve has a ``reduce'' rating on Heineken's shares.

The stock climbed 10 cents to 26.82 euros at 1:19 p.m. in Amsterdam, paring its 12-month decline to 0.8 percent. The 13- member Bloomberg Europe Beverages Index has risen 19 percent over the same period, led by a 39 percent advance in Allied Domecq Plc, the world's second-largest liquor maker.

Heineken is due to hold its annual meeting with shareholders next week.

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