FDBusiness.com

Heineken and China Resources Enterprise to Join Forces in China

 Breaking News
  • Arla Foods Further Strengthens its Innovation Agenda As Arla Foods continues its pursuit to become one of the leading dairy innovators in the world, it is taking a bold new approach to innovation and new product development, including creating a new Product and Innovation organisation and appointing a new Senior Vice President. Driving the development of the new organisation is the opportunity Arla has [...]...
  • Orkla Buys Pama Brand Okla, the leading branded consumer goods company in the Nordic region, has purchased the Pama brand, a local brand offering consumers porridge rice in Denmark and Sweden, from PepsiCo for an undisclosed price. Pama had been a part of PepsiCo since its acquisition of The Quaker Oats Company in 2001. Orkla Foods Danmark is currently distributor [...]...
  • Label&Print 2019 Welcomes the Future of the Print Industry Label&Print, which returns to Birmingham’s NEC on 27 & 28 February 2019, will offer visitors an exclusive look at the future of the industry, showcasing the very latest products, services and technologies available to the packaging community. From leading sellers and manufacturers of print and labelling equipment, through to designing, branding and finishing experts, it [...]...
  • PepsiCo Elects CEO Ramon Laguarta as Chairman PepsiCo’s board of directors has unanimously elected Ramon Laguarta as the company’s Chairman, succeeding Indra K. Nooyi who announced in August 2018 her intention to step down as PepsiCo CEO effective October 3, 2018 and remain Chairman until early 2019 to ensure a smooth and seamless transition. The appointment is effective when Chairman Nooyi retires from the company [...]...
  • Visitors to Irish Whiskey Distilleries Up 13% in 2018 The Irish Whiskey Association (IWA) has published statistics which show that there were 923,000 visitors to Irish whiskey distilleries in 2018. This marks a 13.4% increase on 2017, when visitor numbers reached 814,000. The figures are based on returns from 13 Irish whiskey distillery visitor centres and brand homes located across the island of Ireland. Overseas [...]...

Heineken and China Resources Enterprise to Join Forces in China

Heineken and China Resources Enterprise to Join Forces in China
August 08
14:57 2018

Heineken has joined forces with China Resources Enterprise (CRE) and acquired a 40% stake in China Resources Beer (CR Beer) to create a long-term strategic partnership for Mainland China, Hong Kong and Macau.CRE will own the other 60% of CR Beer, which is the undisputed market leader in China.

As part of the strategic partnership, Heineken China’s current operations will be combined with CR Beer’s operations and the Heineken brand in China will be licensed to CR Beer on a long-term basis. Heineken is making a net investment of €1.948 billion (at current exchange rates) in the venture.

China’s beer market, the world’s largest beer market by volume, is now the second largest premium beer market globally and is forecast to be the biggest contributor to premium volume growth in the next five years, driven by its rapidly growing middle class. Profitability of the Chinese beer market is expected to improve significantly, driven by premiumisation, demand for international beer brands and cost optimisation.

Under the strategic partnership agreement, Heineken will be CRE’s exclusive partner for international premium lager beers in China. Heineken and CR Beer will investigate which other premium brands from Heinken’s portfolio can be licensed to CR Beer in China. Heineken and CRE will also investigate if the Dutch brewer’s global presence and marketing capabilities can be leveraged to support and accelerate the international growth of CR Beer’s Snow® brand and its other Chinese brands to become the Chinese beers of choice.

Jean-François van Boxmeer, chairman and chief executive of Heineken, says: “We believe that our strong Heineken® brand and marketing capabilities, combined with CR Beer’s deep understanding of the local market, its scale and best-in-class distribution network will create a winning combination in the growing premium beer segment in China. We look forward to working together with CRE’s leadership in our newly formed Strategic Advisory Council, and supporting CR Beer in its ambition to internationalise.”

Upon completion of the deal Heineken’s pro-forma net debt/EBITDA (beia) ratio is expected to slightly exceed the target of 2.5x. However, Heineken remains committed to return to the long-term target of below 2.5x. The transaction will be immediately accretive to margins and accretive to EPS in the near term.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 18, 2019Multimodal 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements