Heineken has confirmed it is in talks to purchase Brasil Kirin, the Brazilian unit of Japanese beverage group Kirin, which owns local beer brands Schin and Devassa.
In a statement, the Dutch brewer confirmed that it is in discussions with Kirin Holdings Company on a potential transaction in respect of Brasil Kirin Holding. It added that these discussions are ongoing and there can be no certainty that an agreement will be reached.
Sources told Brazilian daily O Estado de Sao Paulo that Kirin has already agreed to sell its Brazilian assets to Heineken and expects the deal to be announced in the coming weeks. For its part, the O Globo newspaper reported the deal could be closed in February or March. The negotiations have been taking place since July 2016.
Market sources expect Kirin, which paid R$ 6.3 billion (€1.85 billion) to take over Brazil’s Schincariol group in 2011, will end up selling the asset for at least 50% less. In recent years, Kirin saw its position weaken in Brazil, leading its parent company to the first overall loss in its history in 2015. Today, Brasil Kirin has just over 8% of the market, according to Nielsen data from 2016.
If the deal is completed, market experts believe it would not affect competition in the local brewing sector significantly. Together, Heineken and Kirin would hold about 18% of the market, ahead of Petrópolis Group (15%), but behind Ambev (65%).
With the acquisition, the Dutch company would add 12 factories owned by Kirin to its six existing facilities in Brazil. It would gain ground especially in the Northeast, where the Schin brand has a stronger presence.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up for ESM: The European Supermarket Magazine
