BELARUS NEWS AND ANALYSIS

DATE:

28/12/2007

Heineken buys into eastern Europe

David Teather

Heineken has been building its presence in eastern Europe. Photo: Rick Nederstigt/AFP/Getty

Heineken announced a deal on Friday to buy one of the leading brewers in Belarus, underlining the importance of the fast-growing eastern European market to the big brewers.

The deal, to acquire Syabar Brewing Company, gives Heineken control over Bobrov, the second-biggest beer brand in Belarus. The leading brewer in Belarus, Krinitsa, is owned by the state.

Heineken has been building its presence in eastern Europe and the deal in Belarus follows the takeover of Serbia's Rodic Brewery, announced this month, and of the Czech Krusovice Brewery, announced in June. The company is trying to offset slower growth rates in western Europe and the United States.

The Dutch brewer said the market in Belarus was growing at a double-digit rate. The brewery is based at Bobruys, 90 miles south of Minsk, and as well as its mainstream brand Bobrov, it also markets a premium brand under the Syabar name.

A spokesman said the brewery would also be used as a platform to grow the Heineken brand in Belarus as well as its Russian brands, Botchkarov and Ochota, which it imports to the former Soviet state.

Heineken is buying Syabar's Cypriot parent company from a consortium led by an investment firm, Detroit Investments, and the International Finance Corporation, an affiliate of the World Bank.

Heineken is in an acquisitive mood. It teamed up with Carlsberg to make a ?9.7bn bid for the British brewer Scottish & Newcastle. The pair were set a January 21 "put up or shut up" deadline to make a formal offer or walk away. S&N has been under siege since October, when an indicative offer worth 720p a share was made. Last month, it was raised to 750p. That was dismissed by S&N as "wholly inadequate".

S&N has moved to prevent Carlsberg using inside information. The pair co-own Baltic Beverages Holding, the lucrative Russian brewer, and the value ascribed to the business is seen as crucial to the Carlsberg/Heineken bid. Confidentiality clauses governing the joint venture mean that S&N shareholders have not been given access to the same profit forecasts.

Source:

http://www.guardian.co.uk/business/2007/dec/28/heineken