Wall Street Journal: AB InBev Pays $1.24B For Control Of Dominica's CNDApril 17, 2012
From the Wall Street Journal:
Anheuser-Busch InBev NV (ABI.BT) Monday said it is paying $1.24 billion for a majority stake in Dominican brewer Cerveceria Nacional Dominicana SA, the maker of Presidente beer, as the Belgian brewing giant continues to look to emerging markets for growth.
AB InBev, which reportedly beat off competition from Dutch rival Heineken NV (HEIA.AE) for the acquisition, said the deal will "create the leading beverage company in the Caribbean."
The world's largest brewer has been seeking to capitalize on rising incomes in emerging markets, which are driving global beer consumption and offsetting sluggish sales in mature economies like North America and Western Europe, where consumer spending is being squeezed.
AB InBev said it is paying about $1 billion in cash to CND's parent company E. Leon Jimenes--which owns 83.5% of CND--for its Brazil-based AmBev unit to take a 41.8% stake in the Dominican brewer through a holding company that will also own AB InBev's Dominican unit, AmBev Dominicana SA.
AmBev will also acquire a further 9.3% stake in CND, currently owned by Heineken, for $237 million.
This brings AmBev's total interest in CND to 51%.
Following the transaction, AB InBev's combined Dominican business will include beer, malt and soft drinks operations in the Dominican Republic, Antigua, Saint Vincent and Dominica, as well as exports to 16 other countries in the Caribbean, the U.S. and Europe, AB InBev said in a statement.
The combination generated revenue of approximately $570 million in 2011, and will have estimated combined earnings before interest, taxation, depreciation and amortization of about $190 million in the first 12 months. It is expected to be earnings per share accretive in the first year of operations, according to the statement.
The acquisition is expected to be completed in the second quarter, it said.
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