Heineken buys Kirin in Brazil for $1.43 billion
Looking to increase its marketshare in third-largest beer market, Heineken sends warning shot across bow of Anheuser-Busch InBev with purchase of Kirin properties.
Heineken, the second-largest brewer in the world, agreed on February 13, 2017 to purchase the Brazilian holdings of Japan’s Kirin in a deal worth approximately 1.43-billion.
While the Japanese Kirin beers have failed to take Brazil by storm, the deal will make the Dutch brewer Heineken the number two brewer in Brazil with a market share of about 19 percent, but still far behind market share leader Anheuser-Busch InBev.
Back in 2011, Kirin had doled out approximately US$3.9 billion for 12 breweries in Brazil, and then over the past years saw its market share decline as raw material costs rose owing to a weak Brazilian currency, and the country entering its third consecutive year of recession.
Heineken, however, is playing the long game, noting that its beer market was attractive in the longer term, with a premium segment growing faster than the market as a whole.
The acquisition will increase Heineken’s presence in the north and north-east of Brazil, allow it to boost sales of the premium lagers Heineken and Sol and yield cost savings.
Along with the Kirin acquisition, Heineken has five other breweries acquired from its 2010 purchase of FEMSA of Mexico.
The deal is expected to be finalized within the first half of 2017.