In order to comply with the requirements set by Argentina’s authorities following AB InBev’s takeover of SABMiller in 2016, the world’s largest brewer will sell seven of its brands in the country to Chilean brewer Compania Cervecerias Unidas (CCU). CCU, in which Heineken has a major stake, is Chile's largest brewer and the second largest brewer in Argentina and has also operations in Bolivia, Colombia, Paraguay and Uruguay.
After the deal received the blessing of the Argentine National Competition Defense Commission on Wednesday the company will buy the brands Isenbeck, Dioasa, Norte, Iguana and Baltica, as well as the licenses to Warsteiner and Grolsch. In exchange CCU has to cede rights to the Budweiser brand in Argentina to AB Inbev. The Belgium-Brazilian brewer, which already owns global Budweiser brand rights since the acquisition of US based brewery Anheuser Busch in 2008, will pay up to $400 million over three years to CCU.
Authorities said that without the sale AB InBev would have controlled 85 percent of Argentina’s beer market.
The buyer, CCU, is a public company, whose shares are traded in the stock markets of Chile and on the New York Stock Exchange. Its main shareholders are Quiñenco, holding company of the Luksic family, and Heineken Chile, which own 60% of the company through Inversiones y Rentas. The rest of the shares are divided between ADRs (14.7%) and other minority shareholders (25.3%).
CCU just published its fourth-quarter financial report for 2017. The beverage maker's growth rates were strong but not as strong as many had hoped. Net sales were up 6.3% to about 510 billion Chilean pesos ($836.4m), net income was flat from year-ago levels and consolidated unit volumes were higher by just 2.5% to 7.73 million hectoliters. While volumes in Chile were down 2.1% from year-earlier figures, volume in its international segment outside the country jumped by 15%.
Patricio Jottar, since 1998 CEO of CCU, said last year’s figures "demonstrate our ability to realize profitable growth under difficult macroeconomic conditions and an intense competitive environment." He also noted that the company boosted its market share in all of its operating segments and expects further growth in 2018.
Especially Colombia will see a further boost, when Central Cervecera Colombiana (CCC), a fifty-fifty joint venture between CCU and Postobón, market leader in non-alcoholic beverages in Colombia, open a 3 million hectoliter plant later this year. (inside.beer, 13.3.2017)