This year, Heineken acquired the beer business
of Latin American brewer FEMSA, a move that
has transformed Heineken's presence in The
Americas and made it the world's second-
largest brewer in terms of revenue. Operating
as Cerveceria Cuauhtémoc Moctezuma (CCM)
in Mexico and as Heineken Brasil in Brazil, the
new businesses have a successful portfolio of
brands, including Dos Equis, Tecate, Sol and
Kaiser. So what synergies can Heineken deliver
from the deal, and where does the potential lie?
World ofHeineken 42 summer 2010
A quick search on the Internet and it's clear
that Regional Director The Americas, John
Nicolson's views on the acquisition are being
echoed by analysts around the globe: "The
deal provides a unique opportunity to drive
growth in three of the world's four biggest
beer profit pools, accessing both value and
volume growth in Mexico - the world's fourth-
largest beer profit pool - and strengthening
Heineken's leading position in the highly
profitable and growing Hispanic segments
in the US. It will also lead to a value creation
opportunity in Brazil, the world's second-
largest beer profit pool.
"FEMSA's established routes to market offer
significant scope to accelerate the growth of
the Heineken brand in the premium segment
in both Mexico and Brazil," continues John.
"With a 43% market share in Mexico, the
move positions Heineken as the number
two beer company in the country, behind
Grupo Modelo. It also makes Heineken a
major player in Brazil, the second-largest
beer market by profit. Our already leading
international portfolio will be strengthened
further with the addition of, among others,
the Dos Equis, Tecate, Sol and Kaiser brands."
The move will reduce Heineken's reliance on
mature markets, such as Western Europe,
by increasing its exposure to growth from
the developing markets in Latin America.
Analysts estimate that once the deal is
complete, Heineken will have 40% of its EBIT
in growing markets.
RAPIDLY GROWING MARKET
Mexico has become Heineken's biggest
volume market worldwide. Analysts forecast
the Mexican beer market will grow many
times faster than in other parts of the world.
Heineken CEO, Jean-Franpois van Boxmeer,
has a positive take on the strong competition
in Mexico: "We believe that it would help
the market if the players start segmenting it
more, instead of just copying each other and
competing on price."
A selection of Heineken's newly acquired brands
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