Heineken - Merger Analysis

MERGER ANALYSIS

I – Strategic Design

Established in 1864, Heineken is the world’s second largest brewer by revenue and the third largest by volume. With sales of 28.1 million hectoliters in over 170 markets in 2013, the Heineken brand ranks first among the international premium beer brands.

The group owns and sells over 250 international, regional, local and specialty beers and ciders. Its global brands are Heineken, Amstel, Sol, Desperados and Strongbow Apple Ciders. Other local and regional brands include the Polish Zywuec, the Slovakian Zlaty Bazant, the Russian Oxota, Mexican imports Tecate and Dos Equis, as well as Tiger, Kingfisher and Bintang in Asia Pacific.

In recent years, the group’s growth has been primarily led by three regions: Africa Middle East, Asia Pacific and the Americas.

Heineken beer sales by region (2013) |

Western Europe | 35.4% |

Central and Eastern Europe | 16.0% |

The Americas | 23.4% |

Africa Middle East | 13.3% |

Asia Pacific | 10.6% |

Corporate/Other | 1.3% |

Heineken 2013 key figures |

Net Sales | 19.20 billion euros |

EBIT Margin | 14.1% |

Net Margin | 7.1% |

Beer sales volume | 178.3m hectoliters |

Staff | 80,933 employees |

Heineken’s strategy revolves around two objectives: develop their presence in emerging markets and further strengthen the Heineken brand.

* Developing Heineken’s presence in emerging markets

Heineken is focused on accelerating its exposure to high growth markets such as Africa and Asia Pacific, through new acquisitions and joint ventures. These investments, which include the establishment of new breweries, aim to consolidate the group’s position in selected markets and to unlock new business opportunities.

For example, in May 2013, Heineken teamed up with local Alliance Brewery Company (ABC) to brew and market Heineken beers in Myanmar. The group holds a 57% stake in the new company, which is expected to commence operations by the end of 2014.

In June...