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RUSSIA: Heineken acquires another Russian brewer

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Heineken has signed an agreement to acquire 100% of Ivan Taranov Breweries (ITB), the Dutch brewer confirmed late yesterday (17 August). Although financial details were not disclosed, Heineken said that the transaction will be funded from available cash resources.

As part of the transaction, Heineken will also have an option to acquire Severnye Vetry Distribution, (SVD), the distribution business of ITB, which contains 23 companies across Russia.

The transaction, reported earlier this week by just-drinks, is subject to regulatory approval, Heineken said, and the acquisition is expected to be earnings enhancing in 2006 and value enhancing in 2011. The closing is expected at the end of next month.

In a statement, Jean François van Boxmeer, member of Heineken's executive board, said: "The acquisition of Ivan Taranov Breweries improves our competitive position in Russia, further extends Heineken's network of regional production and distribution units spread over Russia and enriches our broad portfolio of brands in Russia with more growing brands. We are impressed by the high level of professionalism of the ITB company and are convinced that this will add value to Heineken's growing organisation in Russia."

As a result of this transaction, Heineken's market share in Russia will increase to 14%, with volumes of over 11.4m hectolitres. ITB will be the latest addition to Heineken's presence in Russia, joining, Volga brewery in Nizhny Novgorod, Shikhan in Sterlitamak, Sobol in Novosibirsk, Patra in Yekaterinburg and Stepan Razin in St. Petersburg.

ITB is based in Cyprus, but its Russian brewing and distribution operations head office is located in Moscow. The company owns 3 breweries in Kaliningrad, Novotroitsk and Khabarovsk, Russia.

The breweries have a sales capacity of 3.5m hectolitres, of which Kaliningrad represents 1m hectolitres, Novotroitsk 1.3m hectolitres and Khabarovsk 1.2m hectolitres. The portfolio consists of licensed brands (Gösser, Bavaria, Bitburger, Königsberg), national mainstream brands (PIT, Doctor Diesel, Three Bears) and regional brands (Amur Pivo, Ostmark), which represented a total volume of 2.9m hectolitres of beer in 2004. ITB also produces Coors. In 2004, national market share of ITB was 3.4%.


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