Heineken acquires Drinks Union in Czech Republic

Amsterdam: Heineken NV has announced that it will acquire Drinks Union in the Czech Republic.

The transaction, according to Heineken, will strengthen its No. 3 position in the market, and gives the company a market share of 12 per cent, and a total domestic volume of more than 1.9 million hectolitres.
 
In a statement on its website, Heineken said the transaction would be funded from existing credit facilities, though it did not disclose the value of the deal.

The deal is expected enhance earnings in 2009, and enhance the company's value by 2012. The proposed acquisition is subject to approval by relevant competition authorities, and is expected to be completed by the second quarter of 2008.
 
Drinks Union owns a total of four breweries, all located in North and East Bohemia. Two of the breweries are located in Usti nad Labem, one in Louny and one in Kutna Hora. The regional market positions are complementary to Heineken's existing positions in the Moravian and Prague regions.

Drinks Union, which employs 523 people, has a total production capacity of 0.9 million hectolitres. Its brand portfolio consists of the national brand Zlatopramen and the regional Breznak, Louny and Dacicky brands. The company's 2007 sales volumes totaled 900,000 hectolitres, including export, and the company currently has a domestic market share of 4 per cent.
 
Nico Nusmeier, Regional President, Central and Eastern Europe of Heineken NV, said, ''With this transaction we have significantly extended our reach and consolidated our position in a profitable beer market. Our geographic presence coupled with our strong, balanced portfolio of regional and national brands, will allow us to extract greater value from the considerable growth opportunities in the Czech market.''
 
In the Czech Republic, one of Europe's reference beer markets, Heineken currently owns the Starobrno and Krusovice Breweries, with breweries in Brno, Znojmo (Moravia) and in Krusovice (Bohemia). Heineken's existing brand portfolio includes Starobrno, Hostan, Zlaty Bazant, Krusovice and Heineken.