BELARUS NEWS AND ANALYSIS

DATE:

28/12/2007

Heineken buys No 2 Belarus brewer Syabar

By Gilbert Kreijger

AMSTERDAM (Reuters) - Dutch brewer Heineken NV (HEIN.AS: Quote, Profile, Research) on Friday expanded into the fast-growing Belarus beer market by buying the Syabar Brewing Company to help compensate for sluggish growth in more mature western beer markets.

Heineken, the world's fourth largest brewer after InBev (INTB.BR: Quote, Profile, Research), SABMiller (SAB.L: Quote, Profile, Research) and Anheuser-Busch (BUD.N: Quote, Profile, Research), did not disclose financial details, but Theodoor Gilissen analyst Jan Meijer said in a note he expected Heineken to pay between 70 million euros and 130 million euros (51.5 million-95.6 million pounds).

The acquisition of Syabar, which Heineken estimates to have 2007 sales of 600,000 hectolitres, comes after its planned takeovers of Serbia's brewer Rodic Brewery announced earlier this month, and of Czech Krusovice Brewery announced in June.

The move is part of Heineken's strategy to obtain leading market positions and compensate for low growth rates in Western Europe and the United States, a group spokeswoman said.

The Amsterdam-based brewer is already a big player in Eastern Europe, being number three in the fast-growing Russian market behind Baltic Beverages Holding, the Scottish & Newcastle (SCTN.L: Quote, Profile, Research) and Carlsberg (CARLb.CO: Quote, Profile, Research) joint venture, and InBev, and is also is number two in Poland behind SABMiller.

Heineken said in a statement that it is buying Syabar's Cypriot parent company from a consortium led by Detroit Investments Limited (Cyprus) and from the International Finance Corporation, an affiliate of the World Bank.

Heineken said the Belarus beer market shows double-digit percentage growth and the deal will give the Dutch group a No 2 market position in the country with a share of about 13 percent out of a total beer market of 4.5 million hectolitres. State-controlled Krinitsa is the nation's biggest brewer.

The brewery at Bobruyst, 140 km southeast of Minsk, brews mainstream brand Bobrov and premium Syabar, and Heineken says it will use the brewery to sell its namesake brand and its Russian brands such as Botchkarov and Ochota in a market where Heineken currently only imports its beers into the country.

The Dutch brewer, which wants to buy Britain's biggest brewer Scottish & Newcastle together with Carlsberg, said it will fund the deal from cash resources and the deal will be earnings enhancing in 2008 and value enhancing in 2012.

Shares in Heineken, which sells about 132 million hectolitres of beer globally, were up 0.3 percent at 44.53 euros by 1210 GMT, in line with a 0.3 percent rise of the DJ Stoxx European Food and Drinks index.

(Additional reporting by David Jones in London)

(Editing by Elaine Hardcastle)

Source:

http://uk.reuters.com/article/businessNews/idUKL2825945020071228