Both companies are conducting their due diligence and aim to close the deal, subject to regulatory approval, by the end of this year.
1864 founded Dutch brewing giant Heineken NV has struck a $3.1 billion deal with China Resources Beer Co Ltd aimed at tapping a growing taste for premium beer in China – the world’s biggest beer market.
The deal sees Heineken, the world’s second biggest brewer taking a 40% stake in CRH Beer for $3.1 billion which also provides it with a strong distribution network in China. It also sees China Resources Enterprise buying a 0.9% stake in Heineken for $537.5 million (464 million euros). The combined deal sees a net investment of $2.2 billion (1.9 billion euros) by Heineken.
“We believe we can win together in this new era of the Chinese beer market, in which the premium segment will become increasingly important,” said Chen Lang, chairman of China Resources Enterprise. “In Heineken we have found the perfect partner to achieve our ambitions in China and – as an international partner – to support us in growing our business outside China.”
As per a source with direct knowledge of the matter at hand, both companies are currently conducting their due diligence and the deal is likely to close by the end of 2018, subject to regulatory approval from Chinese authorities.
While China Resources enlisted Nomura and UBS as its advisors, JP Morgan advised Heineken.