PERU: Bavaria to acquire stake in Backus & Johnston
The Colombian brewing group, Bavaria, has announced that it is to acquire a 22% stake in the Peruvian brewer, Backus & Johnston.
Bavaria is to pay US$420m for the 22% voting stake currently owned by the Peru's Brescia Group, which will give the company nearly 18% of Backus & Johnston's total capital.
Colombia, which is the fourth largest brewer in Latin America, recently had a takeover bid for the Panamanian brewer, Baru, blocked by Panama's regulatory authorities as, combined with its existing Panamanian brewery, Cerveceria Nacional, the acquisition would have given Bavaria a virtual monopoly in the country.
Ironically, the company is now furthering its international expansion plans by acquiring a stake in a company which enjoys a monopoly in the Peruvian beer market. It is offering more than twice the current market value for the Backus shares.
Backus has been seen as a ripe takeover target in the South American beer sector for some time, not least because of its fragmented ownership. In 2001, the Venezuelan brewer, Polar, raised its stake in the group to 22%. There is now speculation that Bavaria's entry into the Peruvian market will precipitate a deal between Polar and Bavaria. Bavaria views the Andean and Central American regions as central to its international expansion aspirations. It already owns the largest brewery in Ecuador.
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