Heineken announces partnership for growth in India; Strengthens Asia-Pacific joint venture

Monday, 07. December 2009 06:44
Amsterdam, 7 December 2009 - Heineken N.V. today announced it has
signed a new shareholders' agreement with Dr. Vijay Mallya and United
Breweries Limited ("UBL") and agreed the key terms for the brewing
and distribution of the Heineken brand in India. The new agreement
creates a strong partnership that will drive growth in one of the
world's fastest growing and most exciting beer markets.

As part of the new agreement, Heineken will acquire APB India and in
a subsequent transaction intends to transfer this into UBL during
2010.

Heineken also announced that it has strengthened and enlarged Asia
Pacific Breweries Ltd ("APB"), its successful joint venture
partnership with Fraser and Neave Ltd ("F&N") through the transfer of
Heineken's controlling interest in PT Multi Bintang Indonesia ("MBI")
and Grande Brasserie de Nouvelle-Calédonie S.A. ("GBNC"). This will
create a more profitable business and a stronger platform for growth
in South East Asia and the Pacific Islands.

Heineken expects that the effect of the transactions will be broadly
neutral at net profit (beia) level. As a result of the transaction,
an exceptional book gain of EUR 145 million before tax will be
realised in 2010. Consolidated net debt is expected to be reduced by
approximately EUR 175 million.

Commenting on today's announcement, Jean-François van Boxmeer,
Chairman of Heineken's Executive Board and CEO said, "In the world of
beer, there is no bigger or more exciting growth opportunity than
India. We have long regarded a strong Indian presence as important in
order to increase our exposure to and growth from developing markets.
We are therefore extremely proud to announce our partnership with
UBL, the strong market leader. Our partnership and the combination of
the Kingfisher and Heineken brands will transform our ability to
unlock the market's considerable potential and to shape the premium
segment. We are now uniquely positioned to benefit from the highly
favourable demographics and strong economic fundamentals in the
Indian market.

"Alongside this, the integration of our Indonesian and New Caledonian
businesses with our joint venture Asia Pacific Breweries,
considerably strengthens our platform for growth and our leadership
position in South East Asia and the Pacific. Taken together, the
agreements announced today represent a powerful, positive development
for our future growth and development in Asia."

Commenting on the agreement Dr Vijay Mallya said, "led by United
Breweries and its flagship brand Kingfisher, the Indian beer market
has been a strong and exciting growth over the last several years.
Given the young demographics of the country, I foresee many decades
of strong and profitable growth to come. With its emphasis on quality
and the aspirational branding, United Breweries has led this growth
from the front, and will continue to do so in future, helped by our
new alliance with Heineken. Heineken is among the most respected and
recognized names among beers all over the world. The combination
should help United Breweries to further its leadership position in
the years to come."

Strongly positioned to drive future growth in India

* The new shareholders' agreement gives Heineken a strong
role in the governance of the business. Under the terms of the new
agreement, Heineken has the right to nominate three members of the
UBL Board, including the executive position of Chief Financial
Officer;

* Following a UBL Board meeting in India earlier today,
Heineken nominee Mr Guido de Boer has been appointed Chief
Financial Officer, and Messrs René Hooft Graafland (Member of
Heineken N.V.'s Executive Board and Chief Financial Officer) and
Siep Hiemstra (Regional President, Heineken Asia Pacific) have been
appointed as non-executive directors;

* Additionally, Heineken will acquire for an equity value of
EUR 25 million APB's existing Indian investments: Asia Pacific
Breweries (Aurangabad) Pte Ltd ("APB Aurangabad") and Asia Pacific
Breweries-Pearl Pte Ltd ("APB Pearl"). Subject to the necessary
approvals being granted, these acquisitions are expected to
complete in the first quarter of 2010. Following completion,
Heineken intends to transfer the underlying businesses into UBL
during 2010;

* Heineken also intends to merge its interest in Millennium
Alcobev Private Limited (MAPL) into UBL. Heineken holds an interest
of 50% in MAPL with the other 50% held by UBL. This was the joint
venture through which Scottish & Newcastle first invested in India
and has been managed as part of the UBL's business following the
direct investment in UBL by Scottish & Newcastle in 2004.

* Heineken and UBL have agreed the key terms for the brewing
and distribution of the Heineken brand in India. This will
accelerate the development of the Heineken brand throughout India;


Heineken and Dr. Vijay Mallya and his associates jointly hold a
majority interest of 75% in UBL, the number one brewer in India with
a 48% market share. Heineken holds a 37.5% interest in UBL. Dr. Vijay
Mallya and his associates also hold a 37.5% interest in UBL, with the
remaining 25% held publicly.

UBL's flagship brand, Kingfisher, is the number one beer brand in
India and available in more than 50 countries. UBL's leading brands
include: Kingfisher Premium, Kingfisher Strong, UB Export Lager,
London Pilsner and Kalyani Black Label.

Reported volumes over the period 1 April 2008 - 31 March 2009 are 6.4
million hectolitres, which is a volume growth of 9% that accelerated
to a 16% volume growth in the half year ending September 2009 against
an industry growth of 8%, resulting in a market share increase of 3%.

Based on local GAAP, the company reported net revenue for the
accounting year ended March 2009 of EUR 302 million, EBIT of EUR 27
million and net profit of EUR 7 million.

APB Aurangabad is located in Maharashtra. The brewery has a technical
capacity of
300,000 hl/year and brews Cannon 10000, Tiger and Barons. APB Pearl
is located in Andhra Pradesh. This brewery has a technical capacity
of 160,000 hl/year and brews Cannon 10000 and Tiger;

In 2009, the Indian beer market is expected to grow to 14.4 million
hectolitres. The beer market has historically been experiencing
double-digit volume growth and is expected to continue a strong
growth driven by the rapidly developing middle class, favourable
demographics, strong economic fundamentals and a shift from other
alcoholic beverages. Beer consumption per capita is currently
estimated at 1.3 litres per annum. Working together with UBL,
Heineken will be in a strong position to accelerate growth of the
Heineken brand in the growing premium beer segment, which is
currently estimated at 6% of the total beer market.

Strengthened leadership in South East Asia and the Pacific

Heineken has strengthened and enlarged its successful 78-year joint
venture partnership with F&N in APB, one of Asia's leading brewers
and Heineken's investment vehicle in the region. This move will
create a stronger and more profitable joint venture partnership with
an increased presence in South East Asia and the Pacific.

The Heineken brand remains Asia's number one international premium
beer with a market share of 25% in the international premium beer
segment in Asia Pacific.

* Heineken and APB have agreed that Heineken will transfer a
controlling stake of 68.5% in PT Multi Bintang Indonesia to APB for
a consideration of EUR 157 million, after payment of an interim
dividend of EUR 13 million (pro rata for the stake of 68.5%). The
final price at completion will be subject to customary closing
adjustments. On completion of the transaction, APB will launch a
mandatory tender offer for the free float shares and a private
offer for the depositary receipts of shares in MBI. APB may request
Heineken to sell MBI shares in the MTO to increase APB's
shareholdings in MBI to 75.1%;

* Heineken will also transfer its 87.3% interest in Grande
Brasserie de Nouvelle- Calédonie S.A. to APB for a consideration
of EUR 57 million;

* Subject to regulatory and APB shareholder approvals, these
transactions are expected to complete in the first quarter of 2010.
The completion of each of these transactions is conditional upon
the others being completed;

* Heineken will continue to hold a 42% stake in APB.

APB, with its portfolio of brands including Tiger Beer, Heineken,
Anchor and ABC Stout, operates breweries in 12 Asian countries and
has export operations to more than 60 countries. The company reported
net revenue for the accounting year ended September 2009 of EUR 1,021
million and EBIT of EUR 154 million. Following the transaction, APB
will not only be the leading brewer in Singapore, Malaysia, Cambodia
and Papua New Guinea, but also in Indonesia and New Caledonia. In
addition, APB is number two in New Zealand and the market leader in
the premium segment in Vietnam and Thailand.

Heineken will continue its export operations in South Korea, Taiwan,
and Hong Kong. Heineken's partnerships in Japan and in Australia with
Kirin are unaffected by these announcements.

MBI

MBI is a public company listed on the Jakarta stock exchange.

* The transfer of Heineken's controlling shareholding to APB
will give rise to a mandatory cash tender offer by APB for the free
float shares of MBI;

* The rights of the Bintang brand will be transferred to APB
for a consideration of EUR 19 million;

* Following the transaction, Heineken will continue to hold
a direct stake in MBI of up to 16.5%.

GBNC

* Heineken will transfer its 87.3% interest in GBNC to APB;

* GBNC is the leading brewer in New Caledonia with a market
share of 74% and its beer brands include Number One, the leading
mainstream beer. Heineken, Desperados and Hinano complete GBNC's
portfolio and together, have built a significant share within the
premium segment;

* The company also produces and distributes a portfolio of
soft drink brands.



Press enquiries
Véronique Schyns
Tel: +31 (0)20 5239 355 / +31 (0)6 20300139
veronique.schyns@heineken.com

Investor and analyst enquiries
Jan van de Merbel
Tel: +31 (0)20 5239 590
investors@heineken.com


Heineken will host an analyst and investor conference in relation to
this announcement today at 10:00am CET. The call will be audio cast
live via the company website
http://www.heinekeninternational.com/webcast/investors. The
presentation can be monitored live and can be downloaded afterwards.

Analysts and investors can call in using the following telephone
numbers:

The Netherlands United
Kingdom
Local number: +31 20 794 8504 Local:
+44-20-7190-1595
Toll free: 0800-265-8528 Toll free:
0800-358-5256


Editorial information:
Heineken N.V. is one of the world's great brewers and is committed to
growth and remaining independent. The brand that bears the founder's
family name - Heineken - is available in almost every country on the
globe and is the world's most valuable international premium beer
brand. The company's aim is to be a leading brewer in each of the
markets in which we operate and to have the world's most prominent
brand portfolio. In 2008, the Company operated 125 breweries in more
than 70 countries and sold 162 million hectolitres of beer. Heineken
is Europe's largest brewer and the world's third largest by volume.
Heineken is committed to the responsible marketing and consumption of
its more than 200 international premium, regional, local and
specialty beers and ciders. These include Amstel, Birra Moretti,
Cruzcampo, Foster's, Maes, Murphy's, Newcastle Brown Ale, Ochota,
Primus, Sagres, Star, Strongbow, Tiger and Zywiec. In 2008, revenue
totalled EUR14.3 billion and Net Profit before exceptional items and
amortisation was EUR1.0 billion. In 2008, the average number of
people employed was 56,208. Heineken N.V. and Heineken Holding N.V.
shares are listed on the Amsterdam stock exchange. Prices for the
ordinary shares may be accessed on Bloomberg under the symbols HEIA
NA and HEIO NA and on the Reuter Equities 2000 Service under HEIN.AS
and HEIO.AS. Additional information is available on Heineken's home
page: http://www.heinekeninternational.com.


This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.

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