In a strategic move that was initiated as a partial challenge to AB InBev’s dominance in Brazil, Heineken has agreed to buy a Brazilian beer business from Japan’s Kirin Holdings Company, which will make them the second-biggest brewer in the world’s third-largest beer market!
According to the Financial Times, Kirin who entered the Brazilian market back in 2011, found themselves struggling almost immediately, as Brazil’s once booming economy turned south and the company saw its beer volume sales fall by 25% in 2015, forcing the company to post their “first annual net loss since it listed in 1949.”
This is a big acquisition for the Dutch company. The Drinks Business reports that Brazil Kirin currently operates 12 independent production facilities and also has its own distribution network in the country. Its current family of beers include lower-end brands, Schin and Devassa, as well as specialty and premium titles including Baden Baden and Eisenbahn.
Heineken’s move is being seen by many industry analysts as an effort by the Dutch company to expand upon its existing holdings and build a more formidable fiefdom in one of the world’s most valuable beer markets – a market where AB InBev currently controls over 60% of the action.
The deal, which is valued at 1.1 Billion and subject Brazil’s antitrust agency approval, is expected to close in the first half of this year.