Published: Sun, January 22, 2017
Economy | By Melissa Porter

Heineken in talks to buy Kirin's Brazil presence

Heineken in talks to buy Kirin's Brazil presence

"These discussions are ongoing and there can be no certainty that an agreement will be reached", the company said in a statement.

Japanese business paper Nikkei reported Heineken could pay $870m (£705m) for the Brazilian brewer, a big discount from the $4bn it was valued at in 2011.

Analysts said a deal with Kirin could improve Heineken's profitability and double the size of its operations in the country, creating a larger platform for its premium brands.

Kirin had acquired Brazilian beer and soft drinks maker Schincariol in two stages in 2011 for $3.96 billion and later renamed it Brazil Kirin.

Such a price would reflect the current weak state of the Brazilian market which would allow Heineken to become the second largest brewer in Brazil at a relative bargain.

It holds around 9 per cent share of the Brazilian beer market, behind Anheuser-Busch InBev with 67 per cent and 12 per cent held by the Petrópolis Group. It said third-quarter volumes fell 5.1% in the country, even as the Latin American country hosted the Olympic Games.

"We are considering every option, including a discussion with Heineken", a Kirin spokesman said.

In September, Kirin was reported to be to be talking to a number of companies about possible partnerships for its struggling Brazilian beer business.

Netherlands-based Heineken hasn't been immune to the economic crisis in Brazil but its more expensive premium brands have performed well.

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