CZECH: Heineken set to acquire Drinks Union in Czech

By | 25 March 2008

Heineken has announced plans to acquire Drinks Union in the Czech Republic.

The Dutch brewer said today (25 March) that Drinks Union, whose portfolio includes the national brand Zlatopramen and the regional Breznak, Louny and Dacicky brands, owns four breweries in north and east Bohemia in the country.

The proposed acquisition will be submitted to the relevant competition authorities for approval and is expected to be completed by the second quarter, the company said.

The transaction will "strengthen its number three position in the market, and gives the company a market share of 12% and a total domestic volume of more than 1.9m hectoliters," added Heineken. The Dutch brewer went on to describe Drinks Union's regional market positions as "complementary" to its existing positions in the Moravian and Prague regions.

The financial details of the deal, which will be funded from existing credit facilities, has not been disclosed, but is expected by Heineken to be "earnings enhancing" next year and "value enhancing in 2012".

The Drinks Union, which has a total annual production capacity of 0.9m hectolitres and employs 523 staff, saw sales volumes total 900,000 hectolitres this year, including export. The company currently has a domestic market share of 4%,.

Heineken's regional president of Central and Eastern Europe Nico Nusmeier 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, 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.

Sectors: Beer & cider

Companies: Heineken

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