Heineken Seals $400M Bravo Deal
Published: February 5, 2002 (Issue # 742)
Europe's biggest brewer, Dutch-based Heineken, announced on Friday that it had signed an agreement to acquire St. Petersburg's Bravo Holding for $400 million.
The purchase, which officials at Heineken said would help them move into a Russian market that still has room for growth, not only brings the European holding the popular local Bochkarev brand, but will also allow more market penetration for its own flagship label.
"With this acquisition, Heineken gains a foothold in the expanding beer market in Russia," a statement released by the firm said. "The transaction is valued at a maximum amount of $400 million, provided that volume and price targets are met in the next 12 months."
According to Manel Vrijenhoek, press officer at Heineken, the price is a reasonable one to pay for Bravo's facilities, brands and expertise.
"We think that it's a good price for a company that has shown such strong growth," she said in telephone interview on Monday. "The next few years will bring at least 6-percent annual growth, especially considering that there is room for growth on the beer market."
"And, as we already have such a strong position in Europe, the company's management decided to focus on markets in Russia, Asia and Latin America," she added. She also said that Heineken planned to launch a line producing its own beer here.
"Because Russia has very high import duties, the Heineken brand will have a competitive advantage in the Russian premium market when it is brewed inside the country itself," she said. "Basically, we are not planning to change Bravo's structure and strategy because we see no point in reorganizing a system that is working well. We will fill some positions in management, while the present team will likely stay."
Bravo International was set up in 1993 by two Icelandic businessmen, Thor Bjorgolfsson and Magnus Thorsteinsson. The local brewing facility, which began production in 1999, is the sixth-largest single-site brewery in Europe.
Although the brewery has only been in production for three years, Bravo has already acquired a 17-percent share of the St. Petersburg market and a 7-percent market share in Moscow, according to a Heineken statement. The company's highest-profile brands are Okhota and Bochkarev. The brewery also produces the Lowenbrau brand under license.Pages:  [2 ]