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Heineken seals Ethiopian takeover

By UNKNOWN
Posted on Friday, 12 August 2011 16:04

Holland’s largest brewer, Heineken on Thursday sealed a US$163million deal to acquire two Ethiopian breweries after protracted negotiations.

Heineken effectively took over control of Bedele and Harar breweries from the Ethiopia government and will pay US$85 million and US$78 million respectively.

The two breweries are the two biggest and famous breweries in Ethiopia, home to around 80 million people.

“We are delighted to have acquired these two breweries which give us a sustainable footprint in one of Africa’s most exciting beer markets,” the Dutch company said in a statement.

“The transactions reflect Heineken’s strategy of increasing our exposure to and growth from developing markets.”

With brands such as Bedele Premium, Bedele Special, Harar, Hakim Stout and Harar Sofi (malt), the two Ethiopian breweries have a combined market share of 18 per cent of the Ethiopian beer market.

Heineken, the Dutch leading brewery giant signed the agreement with the Ethiopian Privatisation and Public Enterprise Supervision Authority (PPESA).

According to PPESA director, Beyene Gebre Meskel, Heineken’s bid to buy both Harar Brewery SC and Bedele Brewery SC was approved in April.

Heineken’s bid for Harar Brewery was won without competition, but the company’s offer for Bedele Brewery had to contend with three bids.

Heineken beat the US$70 million dollar bid from South-West Development, a US$ 68 million offer from BGI, and the $ 64 million bid from Carlsberg.

Heineken said it will continue to brew local brands such as Bedele, Harar and Hakim Stout.

The breweries have a total capacity of about 15 million gallons of beer a year.

“Ethiopia is Africa’s second most populated country with 85 million people and its beer market (three million hectoliters in 2010, source Plato) grew approximately 20 percent per year over the past five years, compared to a GDP growth of 8 percent,” Heineken said.

Heineken said beer and non-alcoholic malt consumption in Ethiopia was approximately four litres per capita in 2010, which is well below the global average of 27 litres and below beer consumption in other countries in the region, such as Tanzania (seven litres), Uganda (nine litres) and Kenya (10 litres).

“In addition to a fast growing population and a developing beer market, the country’s political stability and improving economy, make Ethiopia a promising, long-term growth market for Heineken in Africa,” the statement added.

The Dutch company has operations in 20 other African countries.

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