AB InBev announced this week that it will increase its stake in Cervecería Nacional Dominicana (CND), the leading beer producer in the Dominican Republic, to 85%. The company pays $926.5 million to its partner E. León Jimenes for a 30% stake, which will add to the existing 55%. The deal will be completed in early 2018. CND owns brands such as Presidente, Bohemia Especial and Ambar.
In April 2012, AB InBev's Brazilian unit AmBev agreed to buy a controlling stake in CND, forming the biggest beverage company in the Caribbean. The deal included $1 billon for a 41.76% stake in CND from Grupo Leon Jimenes, one of the largest companies in the Dominican Republic, and an additional $200 million for Heineken's 9.3% stake in the CND, giving AmBev 51% majority ownership of CND.
At that time AmBev and Leon Jimenes, , formed a partnership, which included the Brazilian brewer’s Dominican operation, known as Ambev Dominicana, as well as the majority of CND.
Grupo León Jimenes, has its roots in 1903, when Eduardo León Jimenes, opened a cigar factory in the Dominican Republic, making La Auroras cigars. In 1930 the company was converted to a stock company called E. León Jimenes. The money from cigarettes began to turn the company into a dominant force in the country and in 1980, Empresa León Jimenes purchased a brewery in Alaska, and shipped it by boat to the Caribbean. In 1983 Cervecería Bohemia was inaugurated and in 1986, the company could buy the majority of shares of Cervecería Nacional Dominicana (CND), which gave it control of nearly 98 percent of the market.
According to the agreement with AB InBev Franklin León will remain president of CND, and E. León Jimenes will keep its position on the board of directors.
Franklin León, president of Cervecería Nacional Dominicana, said: “At Cervecería Nacional Dominicana, we highly appreciate the expansion of the agreement as it will enable CND to continue strengthening its regional leadership and reinforce its strategy of expanding the distribution of our leading brand, Cerveza Presidente, to other markets.”
Fernando Arturo León, president of the board of directors of E. León Jimenes, said: “This alliance is the product of a common vision to create value for Cervecería Nacional Dominicana through good practices and corporate governance, while helping the development of our society.”
AmBev CEO Bernado Paiva added: “We are pleased with the extension of the corporate agreement with E. León Jimenes, the result of an excellent relationship that reinforces our commitment to the Dominican Republic. Together we have achieved a model of society that shares the same dream of continuing to build a better world, creating opportunities for our people and all Dominicans.”