Heineken Says Femsa Will Boost Earnings in Two YearsAndrew Roberts
Heineken NV, the world’s third-biggest brewer by volume, confirmed the acquisition of Femsa Cerveza will boost earnings per share after two years, and that the unit posted 2009 earnings in line with its expectations.
Femsa’s earnings before interest, taxes, depreciation and amortization before some items were 442 million euros ($567 million), Amsterdam-based Heineken said today in a statement. Revenue was 2.47 billion euros.
Heineken acquired the beer division of Fomento Economico Mexicano SAB on April 30 in an all-stock deal valued at 5.3 billion euros ($6.8 billion) to access faster sales growth in Latin America. The purchase gave Heineken one of only two beer makers in Mexico, the world’s fourth-most profitable market, and reduces the company’s reliance on slower-growing European markets.
Heineken, which distributes Femsa beers including Dos Equis in the U.S., expects the deal to deliver savings of 150 million euros by 2013, group finance director Robin Hoytema van Konijnenburg confirmed on a call to analysts today. The acquisition will enhance earnings per share before exceptional items and amortization after two years from the close of the transaction, the executive said. The company had stated those goals when it announced the purchase this year.
“There are no surprises” from Femsa’s numbers, said Hoytema van Konijnenburg. “The integration is on track and expected to be completed on schedule.”
Heineken climbed as much as 53 cents, or 1.5 percent, to 35.45 euros and traded at 35.23 euros at 12:29 p.m. The shares have gained 5.9 percent this year, giving the company a market value of 20.3 billion euros.
Femsa’s Mexican business has been renamed Cerveceria Cuauhtemoc Moctezuma, or CCM, while its Brazilian unit has become Heineken Brasil, Hoytema van Konijnenburg said. New management is already in place, he added.
The figures don’t represent what Heineken’s actual result of operations would have been if the purchase had occurred on Jan. 1, Heineken said.