15th September, 2014
Heineken has rejected a takeover bid by British rival SABMiller after the family-controlled Dutch beer giant said it preferred to remain independent.
The hostile bid was itself aimed at protecting SABMiller, the world’s second largest brewer, from a takeover by the world’s number one, Belgium’s AB InBev, analysts said.
The Heineken family, the majority shareholder, informed SABMiller “of its intention to preserve the heritage and identity of Heineken as an independent company”, the Dutch brewer said in a statement late Sunday.
“The Heineken family and Heineken N.V.’s management are confident that the company will continue to deliver growth and shareholder value,” the statement added.
Therefore the SABMiller bid, for an unspecified sum, was “non-actionable”.
Heineken said it made the decision to announce the approach by SABMiller, and its rejection of the bid, due to rumours swirling around the markets.
“In this case the family has a controlling interest, and without their authorisation, nothing can happen,” said Corne van Zeijl of Dutch asset management firm Actiam.
“They currently have nine billion euros in assets and I wonder whether the family are ready to abandon for a few billion more,” he told Dutch BNR radio on Monday.
Tom Muller of Theodoor Gilissen private bank said there was no reason for the family to sell the brewer.
“Heineken is a sound business, solid enough to fight the competition around the world,” Muller told AFP.
“Business is going well and there’s no urgent reason to sell… The family already has plenty of money,” he said.
SABMiller, with its Miller and Peroni brands, is the second-biggest brewer in the world, valued at around 70 billion euros ($90 billion).
Heineken is the third, valued at around 35 billion euros, thanks not only to its Heineken brand but also to sales of Amstel, Sol, Dos Equis and others.
Giant InBev is however valued at around 140 billion euros, Dutch daily Financieele Dagblad said.
“The big beer companies have made a lot of acquisitions over the last few years,” said Van Zeijl.
“The reason SABMiller wants to buy Heineken is probably because InBev wanted to acquire SABMiller,” he said.
InBev has spent around $100 billion acquiring brands including Corona and Budweiser over the last 10 years, the FD said.
Heineken has meanwhile gained market share in some important markets, citing Brazil, Nigeria, Vietnam, France and the Netherlands.
If it acquired Heineken, SABMiller would up its turnover by around 20 billion euros and have a bigger profile in emerging markets in Africa and Asia.
“Even if it’s not to protect itself from InBev, such an offer makes market sense in order to lower costs and increase margins,” said Joost van Dijck, another analyst with Theodoor Gilissen.
Shares in SABMiller shot up 5.42 percent on the London Stock Exchange on Monday morning.
“SABMiller is top of the table off the back of bid speculation,” said Tony Cross, analyst with Trustnet.
“The company was reported as having failed to negotiate a merger with Heineken, so the concern now is that InBev could make a hostile bid.”
Last month Heineken said that beer drinking during the World Cup football extravaganza raised sales volumes in the first half of the year but net profits fell to 631 million euros from 639 million euros at the same time last year.
However, overall, it said that it expected consumption of its brands to slow down during the rest of the year owing to a cloudy outlook for the economy.
The Dutch group produces and sells more than 200 brands of beer and cider and employs nearly 70,000 people around the world.