InBev has confirmed it is to acquire St-Petersburg-based Tinkoff. The Belgian-based company said today (18 July) that it will pay €167m for the Russian brewer.

Tinkoff, Russia's 4th largest independent brewer in terms of capacity, will immediately add 2.3m hectolitres of capacity (expandable to 4.8m hectolitres) to InBev's current Russian platform. The majority of this additional capacity (2m hectolitres) will be produced by a new state-of-the-art brewery. In addition, Tinkoff is the market leader in the fast-growing Russian super-premium beer segment.

InBev is currently the number two brewer in Russia, with eight breweries, 12.7m hectolitres and 15.6% market share in 2004.
 
"The acquisition of Tinkoff is fully aligned with InBev's stated strategy of targeted external growth in strategically important high-growth markets," the company said in a statement.

"The key driver for acquiring Tinkoff is the immediate alleviation of existing short-term capacity constraints which InBev has faced in Russia. Tinkoff's new state-of-the-art 2m hectolitre brewery (expandable to 4.8m hectolitres) will allow InBev to supply the St. Petersburg region locally and generate CAPEX savings."

Tinkoff will provide InBev with a local presence in St. Petersburg, a key Russian market in which InBev has historically been under-represented (3.7% market share compared to a 15.6% national average). Traditionally, St. Petersburg has been a very regionalised market, dominated by local brands.

Secondly, Tinkoff complements InBev's winning brand portfolio in the country by adding the leading local Russian brand in the fast-growing and highly profitable super-premium segment. Tinkoff is the only domestically produced super-premium beer in Russia. Further growth for Tinkoff and InBev's existing brand families is expected, as a result of leveraging InBev's existing nationwide sales and distribution network.

InBev expects that the acquisition of Tinkoff will be accretive to operating results in 2006, and that ROIC - WACC will break-even in 2007.

Oleg Tinkov will join the board of directors of SUN Interbrew Ltd upon closing of the transaction. Tinkoff's restaurant business is not part of the transaction and this business will be retained by Tinkov.
 
Stéfan Descheemaeker, InBev's zone president of Central and Eastern Europe, said: "This transaction represents a lever to InBev's organic growth in Russia, and is fully in line with our strategic approach regarding targeted, value-creating M&A".

Dresdner Kleinwort Wasserstein acted as sole financial adviser to InBev on the acquisition.