Japanese Brewer Sells Brazilian Breweries To Beer Giant Heineken

Heineken expands Brazilian activities

Heineken agrees to buy Brasil Kirin

Heineken will pay Kirin Holdings $700m for the business which includes 12 breweries and a distribution network.

The Japanese brewer had been struggling since 2011 when it paid US$2 billion for Schincariol, which produces beers such as Schin, Baden Baden, Eisenbahn and Devassa. It has a particularly strong presence in the North and North East, where Heineken now has less exposure.

The company said that the transaction, which gives it a stronger footing in the third-largest beer market globally, will transform its "existing business across the country by extending its footprint, increasing scale and further strengthening its brand portfolio".

Brasil Kirin has also reported its financial results for the year ended 31 December, 2016. "I look forward to welcoming our new colleagues from Brasil Kirin into HEINEKEN and working with them to take the combined business forward". "Responsible for over 60% of beer sales in Brazil, A-B InBev's market dominance remains uncontested". The purchase does not add any additional brands to Heineken's current portfolio of 250 beer labels. It gains ownership of a vastly improved distribution network, as it previously relied on a partnership with Coca Cola.

The Dutch beer-maker says that the Brazilian beer market is highly attractive with its growing population and positive GDP outlook.

"Heineken expects to deliver significant cost synergies from the acquisition through production efficiencies, including logistics and brewery optimization, and through optimizing selling, general and administrative expenses." the Dutch brewery said in the press release.

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