Heineken and its Costa Rica-based Central American partner Florida Ice and Farm Co. (FIFCO) intend to acquire the Panamanian brewery group, Cervecerias Baru-Panama S.A. (Baru). The acquisition is the next step for Heineken in its Central-American strategy, following the partnership with FIFCO and the acquisition of interests in Costa Rica and Nicaragua.
Currently 52% of the Baru shares are owned by Coca-Cola Panama (CCP), the sole Panamanian Coca-Cola bottler. The remaining 48% of Baru's shares are traded on the Panamanian Stock Exchange.
Transactions
To acquire the Baru shares, Heineken and FIFCO have joined with Panamco (the largest soft drink bottler in Latin America) to form CA Beverages (CAB). As an initial step CAB has taken direct control of CCP and thereby indirect control of Baru through the purchase of 3.9 million newly issued shares in CCP (50% + 1 share).
The next step will be public offers for the remaining shares of Baru and CCP. After the public offers, Heineken will obtain from CAB 75% of the tendered shares of Baru and FIFCO 25%. Panamco will obtain 100% of the tendered shares of CCP.
Offerings
The offer price for Baru is USD 14.60 per share, resulting in a total acquisition price of USD 56 million if all shares are tendered. For CCP the offer will represent a stand-alone acquisition price of USD 61 million, if all shares are tendered. The tender offers will commence as soon as possible, and in accordance with Panamanian law, will remain open for a minimum of 30 days.
Commitment management Baru and CCP
The two offers have the full support and commitment of the management of both Baru and CCP, and will be carried out in full consultation with the Panamanian Stock Exchange authorities. Heineken will finance the transaction from its available cash resources and expects the acquisition to contribute to its net profit after two years.
Baru breweries
Baru has a 25% market share in Panama, which accounts for 350,000 hectolitres of the total beer market. The company owns two breweries: one in Panama City and the other in David (Chiriqui province). Baru has three main brands, Soberana, Panama and Cristal and the company employs approximately 650 people. In 2001 Baru's total net turnover amounted to USD 26 million, operating profit to USD 0.6 million and net profit to USD 0.3 million. Heineken believes that, in conjunction with FIFCO, the current market position of Baru can be improved considerably with a corresponding increase in profitability.
Heineken and FIFCO
Heineken and FIFCO recently formed a partnership for the joint development of their beer business in Central America. The acquisition of Baru is the next step in strengthening this partnership and its position in the region. Costa Rica, Nicaragua and Panama together represent a total population of 11.3 million people. The consumption on average for these three countries is 28 litres per capita and accounts for 3.2 million hectolitres in beer sales per year.For more information please visit the internet site of :
www.florida.co.cr
www.barupanama.com
www.panamco.com
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