Heineken to acquire FEMSA Beer Business
Amsterdam
11 January 2010 - Heineken N.V. ("Heineken") today announced it will create a
major new platform for growth by acquiring the beer operations of Fomento Economico
Mexicano, S.A.B. de C.V ("FEMSA") via an all share transaction (the "Transaction").
Heineken will acquire FEMSA Cerveza, comprising 100% of FEMSA's Mexican beer
operations (including its US and other export business) and the remaining 83%
of FEMSA's Brazilian beer business that Heineken does not currently own.
As
a result of the Transaction, FEMSA will hold a 20.0% economic interest in the
Heineken Group (with shareholdings at both Heineken and Heineken Holding N.V. ("Heineken
Holding"). A portion of the Heineken shares allotted to FEMSA will be
delivered over a period of not more than five years (the "Allotted Shares").
FEMSA will have the right to appoint two non executive representatives to the
Supervisory Board of Heineken, one of whom will be a Vice Chairman of the
Heineken N.V. Supervisory Board and will also be appointed to the Board of
Directors of Heineken Holding. Heineken Holding will maintain its 50.005% stake
in Heineken N.V.
Based
upon the Heineken N.V share price of Euro
32.925, as at 8 January 2010, the implied
equity value of FEMSA Cerveza is Euro
3.8 billion (USD5.5 billion). Including net
debt and pension obligations of USD2.1 billion (Euro
1.5 billion), the total
implied enterprise value for FEMSA Cerveza is approximately Euro
5.3 billion
(USD7.6 billion).
Compelling
Strategic Transaction
The
acquisition delivers compelling strategic benefits globally and transforms
Heineken's presence in the Americas. In particular it:
-provides a unique opportunity to drive growth in three of the world's four
biggest beer profit pools by:
- Accessing
both value and volume growth in Mexico, the world's fourth largest beer profit
pool;
- strengthening
Heineken's leading position in the highly profitable import and growing
Hispanic segments in the USA, the world's most profitable beer market; and
- providing
the opportunity to build value in Brazil, the world's second largest beer
profit pool;
-offers
significant scope to accelerate the growth of the Heineken brand in the premium
segment in both Mexico and Brazil using FEMSA Cerveza's established route to
market;
-strengthens
Heineken's leading international portfolio with the addition of the Dos XX
,Tecate and Sol brands;
-gives
Heineken access to strong revenues and cash flows, consolidating its position
as the world's second largest brewer by revenue (Euro 16.7 billion); and
-further
builds Heineken's exposure to growth from developing markets.
Financial
Highlights
Annual
cost synergies and savings to be achieved through operating best practices are
expected to reach Euro 150 million by 2013. Heineken also expects revenue
enhancement initiatives to deliver substantial earnings improvement over a
similar period and in the longer term.
The
Transaction is expected to be earnings per share accretive after two years and
to deliver positive economic profit after six years.
The
all share nature of the deal allows Heineken to maintain a robust financial
position, supported by strong cash flow generation. Heineken's net debt/EBITDA
ratio as at 30 June 2009, proforma for the Transaction, remains largely
unchanged at 3.1 times.
Share
Transaction and Governance
Following
completion of the Transaction and delivery of the Allotted Shares, FEMSA will
be the second largest shareholder in the Heineken Group, holding 12.5% of
Heineken and 14.9% of Heineken Holding, which together represent a 20.0%
economic interest in the Heineken Group.
FEMSA
will be given the right to appoint two non executive representatives to the
Supervisory Board of Heineken and one of these representatives will also be
appointed to the Board of Directors of Heineken Holding. FEMSA, Heineken and
Heineken Holding have agreed to enter into a Corporate Governance Agreement
establishing the relationship between the partners in the future, including
board representation as well as customary lock-up and standstill provisions.
Timing
The
Transaction is expected to close in the second quarter of 2010 and is subject
to the customary approval of the relevant regulatory authorities and the
approval of the shareholders of Heineken, Heineken Holding and FEMSA.
Heineken
Holding, the controlling shareholder of Heineken, has committed to vote in
favour of the proposed transaction as has L'Arche Green N.V., the controlling
shareholder of Heineken Holding, at the respective shareholder meetings.
In
addition, the Voting Trust which controls 39% of FEMSA has entered into an
undertaking to vote in favour of the Transaction at the Commenting on the
Transaction, Jean-Francois van Boxmeer, Chairman and Chief Executive of
Heineken, said:
"This
is a compelling and significant development for Heineken. It transforms our
future in the Americas and marks the next stage in Heineken's strong
association with FEMSA. Through this deal we become a much stronger, more
competitive player in Latin America, one of the world's most profitable and
fastest growing beer markets. The acquisition strengthens considerably our
position within the global beer market, expands our portfolio of leading
international brands and enhances our leading position in the US import market.
I am confident that this transaction will generate considerable future value
for stakeholders in both groups.
"I
am delighted to welcome our new and talented colleagues into Heineken. We will
benefit from their considerable skills, experience and ideas. We also welcome
FEMSA as a significant shareholder in the Heineken Group. We look forward to
their valuable contribution to our future."
Commenting
on the Transaction, Jose Antonio Fernandez Carbajal, Chairman of the Board and
CEO of FEMSA said:
"We
are enthusiastic about this transaction, which allows FEMSA's beer operations
to become an integral part of Heineken's leading global platform. In the
context of the reconfiguration of the global brewing landscape, scale and
geographic diversification are more important than ever, and this transaction
responds to that imperative. Heineken presented us with the most compelling
opportunity to transform our brewing assets. It enables us to unlock the
significant value that we have created during the past decade, while also
allowing our shareholders, through our significant stake in Heineken, to
participate in the long-term value creation we believe will come from aligning
FEMSA Cerveza with Heineken. At the same time, this transaction increases
FEMSA's operational and financial flexibility, allowing us to focus our
attention and resources on the significant growth opportunities for Coca-Cola
FEMSA and OXXO".
A conference call for
analysts and investors will start at 11:00 CET today and will be broadcast live
via the website. The presentation can be monitored live on www.heinekeninternational.com,
from which it can be downloaded after wards.
Press
enquiries Investor and analyst inquiries
Veronique
Schyns Jan van de Merbel
Tel:
+31 20 5239 355 / +31 6 20300139 Tel: +31 20 5239 590
veronique.schyns@heineken.com
investors@heineken.com
Financial
Dynamics
Charlie
Armitstead
Tel:
+44 207 269 7176 / +44 7703 330 269
Editorial
information:
Heineken
N.V. is one of the world's great brewers and is committed to growth and remaining
independent. The brand that bears the founder's family name - Heineken - is
available in almost every country on the globe and is the world's most valuable
international premium beer brand. The company's aim is to be a leading brewer
in each of the markets in which we operate and to have the world's most
prominent brand portfolio. In 2008, the Company operated 125 breweries in more
than 70 countries and sold 162 million hectoliters of beer. Heineken is
Europe's largest brewer and the world's third largest by volume. Heineken is
committed to the responsible marketing and consumption of its more than 200
international premium, regional, local and specialty beers and ciders. These
include Amstel, Birra Moretti, Cruzcampo, Foster's, Maes, Murphy's, Newcastle
Brown Ale, Ochota, Primus, Sagres, Star, Strongbow, Tiger and Zywiec. In 2008,
revenue totalled EUR14.3 billion and Net Profit before exceptional items and
amortisation was EUR1.0 billion. In 2008, the average number of people employed
was 56,208. Heineken N.V. and Heineken Holding N.V. shares are listed on the
Amsterdam stock exchange. Prices for the ordinary shares may be accessed on
Bloomberg under the symbols HEIA NA and HEIO NA and on the Reuter Equities 2000
Service under HEIN.AS and HEIO.AS.
Heineken
to acquire FEMSA Beer Business
1.
Introduction
Heineken
N.V. ("Heineken") today announced it will create a major new platform for
growth by acquiring the beer operations of Fomento Economico Mexicano, S.A.B.
de C.V ("FEMSA") via an all share transaction (the "Transaction"). Heineken
will acquire FEMSA Cerveza, comprising 100% of FEMSA's Mexican beer operations
(including its US and other export business) and the remaining 83% of FEMSA's
Brazilian beer business that Heineken does not currently own.
Following
completion of all steps of the Transaction FEMSA will own a 12.5% stake in
Heineken N.V. and a 14.9% stake in Heineken Holding N.V. ("Heineken Holding"),
representing together a 20% economic interest in the Heineken Group (comprising
Heineken and Heineken Holding).
FEMSA
will be given the right to appoint two non executive representatives to the
Supervisory Board of Heineken and a representative to the Board of Directors of
Heineken Holding. Femsa, Heineken and Heineken Holding have agreed to enter
into a Corporate Governance Agreement establishing the relationship between the
partners in the future. This agreement includes, inter alia,
restrictions over future Heineken Group share purchases and sales by FEMSA.
For
Heineken the Transaction creates a major new platform for growth in three of
the world's four biggest beer profit pools. FEMSA Cerveza is the number two
brewer in Mexico and the number three in Brazil and has a leading position in
the attractive and highly profitable import segment in the USA through its
existing partnership with Heineken.
2.
Detailed Terms of the Transaction
Heineken N.V. acquisition
Heineken
Group and FEMSA entered into a Share Exchange Agreement ("SEA") on 11 January
2010 under which Heineken will issue to FEMSA approximately 86 million new
shares in Heineken N.V. on closing of the Transaction with the commitment to
deliver an additional 29 million Heineken N.V. shares (the "Allotted Shares")
over a period of not more than five years pursuant to the Allotted Share
Delivery Instrument ("ASDI").
Based upon the Heineken N.V
share price of Euro 32.925 , as at 8 January 2010, the delivery of 115 million
Heineken N.V. shares values the equity of FEMSA Cerveza at Euro 3.8 billion (USD5.5
billion). Including net debt and pension obligations to be assumed of USD2.1
billion (Euro 1.5 billion), the total implied enterprise value for FEMSA Cerveza is
approximately Euro5.3 billion (USD7.6 billion). Based upon the EBITDA for FEMSA
Cerveza for the last twelve months ("LTM") ending 30 June 2009 of Euro 471 million
(adjusted to be consistent with the Heineken definition of EBITDA (beia) and
assuming an average MXP/EUR rate over a comparable period of 17.39) this
implies an EV/EBITDA multiple of 11.2 times, comparable to similar transactions
in the region.
ASDI
The
ASDI sets forth the terms under which Heineken will deliver the Allotted Shares
to FEMSA. Heineken's obligation is to deliver these shares in two installments
per year over a period of not more than five years. Heineken's intention is to
satisfy this obligation through the delivery of existing Heineken N.V. shares
acquired in the market, but Heineken may elect to deliver newly issued shares
to FEMSA to satisfy this obligation. If Heineken is unable to fulfill its
obligations to deliver the Allotted Shares, these obligations may be settled in
cash with a significant penalty. Heineken has the option to accelerate the
delivery of the Allotted Shares at its discretion.
Pending
delivery of the Allotted Shares, any undelivered share underlying the ASDI will
receive a coupon payable by Heineken N.V. in order to replicate dividends
payable on Heineken N.V. shares. In this manner, FEMSA will receive either
shares directly or, to the extent that shares are still to be delivered, FEMSA
will receive a coupon equivalent to the underlying dividend.
The
Allotted Shares underlying the ASDI represent 5.1% of the share capital of
Heineken N.V. (taking into account the 86 million Heineken shares newly issued
as a part of the Transaction). Based upon the Heineken N.V share price of Euro 32.925, as at 8 January 2010, the value of the Allotted Shares underlying the
ASDI is Euro 1.0 billion (USD1.4 billion)
Share exchange between FEMSA
and Heineken Holding
Pursuant
to the SEA FEMSA has agreed with Heineken Holding to exchange approximately 43
million Heineken N.V shares for an equal number of shares in Heineken Holding,
thus maintaining Heineken Holding's 50.005% stake in Heineken N.V. This
exchange will take place simultaneously with the issue of Heineken N.V. shares
to FEMSA at closing.
Final shareholdings
Upon
completion of the Transaction, and assuming full satisfaction of the ASDI with
existing Heineken N.V. shares, FEMSA's shareholding in Heineken N.V. will be
approximately 72 million shares or 12.5% (based upon the number of shares in
issue upon completion of the Transaction). Together with approximately 43
million Heineken Holding shares FEMSA will hold approximately 115 million
shares in the Heineken Group, representing a 20.0% economic interest. FEMSA
will become the second largest shareholder in the Heineken Group.
3.
Rationale for the Transaction
The Transaction provides a
unique opportunity to drive growth in three of the world's four biggest beer
profit pools. FEMSA Cerveza is highly complementary to Heineken's existing
operations and provides access to Latin America, a major additional source of
profitable growth in one of the beer industry's most attractive and fastest growing
regions. In particular, Brazil and Mexico are the second and third largest
markets in terms of expected incremental volume growth 2008 – 2015 (ref Plato).
The
addition of FEMSA Cerveza's earnings in Mexico and Brazil will further
diversify the revenues and earnings of Heineken and in particular will increase
its exposure to growth from emerging markets. Following the Transaction,
approximately 40% of Heineken’s 2008 EBIT will be driven from emerging markets,
compared to 32% of EBIT prior to the Transaction.
The
enlarged Heineken will have excellent geographic spread in terms of earnings
and volume. Following the Transaction, the Americas will account for some 24%
of the enlarged group's proforma EBIT compared with 35% for Western Europe, 18%
for Central and Eastern Europe, 21% in respect of Africa and the Middle East
and 3% for Asia and Pacific.
The
Transaction provides Heineken with access to strong revenue streams and cash flows, consolidates the company's position as the world’s second largest brewer
by revenue
(Euro 16.7 billion), and strengthens substantially Heineken's position
in the global beer market.
Within
the Americas region, the Transaction delivers specific, tangible benefits to
Heineken:
-it
complements Heineken's existing investments in Latin America in Chile and
Argentina (through Compania Cervecerias Unidas S.A.), creating a powerful
platform in the Latin American region focussed upon the largest and wealthiest
economies, those which are expected to provide the majority of sales and volume
growth in the future;
-provides
access to both value and volume growth in Mexico, the world's fourth largest
beer profit pool. Heineken will also continue to benefit from the existing
contract between FEMSA Cerveza and Oxxo, Mexico’s largest convenience store
chain (wholly owned by FEMSA) under which FEMSA Cerveza will continue to be the
exclusive supplier of beer to Oxxo until June 2020;
-provides a
significant value creation opportunity in Brazil, the world's second largest
beer profit pool with annual consumption of 109 million hectoliters;
-offers
significant scope to accelerate premiumisation in both Mexico and Brazil using
the Heineken brand and the FEMSA Cerveza established route to market in both
countries; and
-will
allow Heineken to strengthen its long term, leading position in the attractive
and profitable import segment in the USA where FEMSA and Heineken already enjoy
a strong partnership.
Beyond
the Americas the Transaction delivers to Heineken ownership of strong Mexican
beer brands, an export category which continues to offer attractive growth
potential. Heineken will be able to leverage the strong equity of FEMSA
Cerveza's brands internationally via its global marketing and distribution
leadership.
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release P.O. Box 28 - 1000 AA
Amsterdam - The Netherlands 8 of 12 Office
address Tweede Weteringplantsoen, 21 -1017 ZD Amsterdam Heineken N.V. -
Registered Office at Amsterdam - Trade Register Amsterdam No. 33011433
4.
Overview of FEMSA Cerveza
FEMSA
Cerveza produces and sells beer in Mexico and Brazil and exports to many
countries worldwide, with the USA being the most important export market. In
2008, FEMSA Cerveza was ranked as the eleventh largest brewer in the world in
terms of sales, the number two brewer in Mexico and number three in Brazil and
as well as a leading beer importer in the USA. In 2008 FEMSA Cerveza sold 41
million hectolitres of beer with some 67% sold in Mexico, 25% in Brazil and the
balance through exports.
Mexico
In
Mexico FEMSA Cerveza produces and/or distributes 21 brands of beer and enjoys a
market share of approximately 43%. The most important brands in FEMSA Cerveza-s
Mexican portfolio include: Tecate, Sol, Carta Blanca, Indio and Dos Equis.
These five brands, all of which are distributed nationwide, accounted for
approximately 88% of beer sales volume in 2008.
FEMSA
Cerveza owns and operates six breweries in Mexico and directly distributes 91%
of beer volume through 233 wholly owned distribution centres. The main sales
outlets for beer in Mexico are small, independently-owned "mom and pop" grocery
stores, dedicated beer stores or "depositos," liquor stores and bars. FEMSA
Cerveza has a contract with Oxxo, Mexico's largest convenience store chain
(wholly owned by FEMSA) to sell FEMSA Cerveza beer products exclusively, this
contract runs until December 2019. Supermarkets account for only a small
percentage of beer sales in Mexico. FEMSA Cerveza serves approximately 340,000
retailers in Mexico and its distribution network operates approximately 2,307
retail distribution routes.
Brazil
In
Brazil FEMSA Cerveza produced and/or distributed 15 brands of beer. The most
important brands in FEMSA Cerveza’s Brazilian portfolio include: Kaiser,
Bavaria Clasica, Sol, Heineken and Xingu. These five brands, all of which are
distributed nationwide in Brazil, accounted for approximately 96% of FEMSA
Cerveza's Brazil beer sales volume in 2008.
In
Brazil, FEMSA Cerveza co-operates with the 19 different bottlers of the Coca-Cola
system across Brazil for the sale and secondary distribution. The bottlers
leverage their infrastructure, sales force, expertise, distribution assets and
refrigeration equipment at the point of sale to offer a broad portfolio of
products to the retailer.
Exports
FEMSA
Cerveza exports to 52 countries and in 2008 export volumes totalled
approximately 3.5 million hectolitres. The principal export market is North
America, which accounted for almost 88% of export beer sales volume in 2008.
The vast majority of these exports (3.1 million hectolitres) are into the USA
via the distribution agreement with Heineken. FEMSA Cerveza beer has been sold
and distributed by Heineken since 2005.
The principal export brands
are Dos Equis (XX Lager and Amber), Tecate and Sol. These brands collectively
accounted for 92% of export sales volume for the year ended 31 December, 2008.
5.
Financial Information
FEMSA
Cerveza's revenues and EBITDA for the year ended 31 December 2008 under Mexican
GAAP were Euro 2,604 million and Euro 618 million respectively. In the first nine
months of 2009, FEMSA Cerveza reported an decrease in turnover of 5.5% to Euro 1,825 million and an EBITDA decrease of 9.5% to Euro 419 million. On this basis,
FEMSA Cerveza's LTM revenues and EBITDA to 30 June 2009 were Euro 2,534 million and Euro 597 million and for the LTM to 30 September 2009 were Euro 2,490 million and Euro 572
million, respectively.
Applying
Heineken IFRS accounting policies, the estimated underlying EBITDA (beia) of
FEMSA Cerveza for the year ended 31 December 2008 was approximately Euro 483
million. The principal differences between FEMSA Cerveza's Mexican GAAP and
Heineken's IFRS accounting policies in respect of EBITDA (beia) for the year
ended 31 December 2008 relate to a different classification of certain charges
in the profit and loss account (principally related to bottle breakage costs
and interest charges relating to pensions) and a different classification of
costs within EBITDA (principally related to amortization of customer agreements
and marketing expenses).
6.
Creating Value
Heineken
believes that the strengths of FEMSA Cerveza, its market position, its brands
and the beer markets it operates in can be further enhanced through the
introduction of Heineken's best operating practices and management skills.
Heineken expects to create value through the following initiatives:
-Brand
portfolio management;
-Developing
the Heineken Brand;
-Leveraging
the regional strength of FEMSA Cerveza;
-Maximising
the potential of the FEMSA Cerveza brands in the US and internationally;
-Developing
further and exploiting the Brazilian platform; and
-Operating
efficiencies.
7. Financial impact of the
Transaction
Heineken
has significant experience of growing through acquisitions and has a proven record
of enhancing earnings both through cost savings and revenue enhancement. Annual
cost synergies and savings to be achieved through operating best practices are
expected to reach Euro 150 million by 2013. Heineken also expects revenue
enhancement initiatives to deliver substantial earnings enhancement over a
similar period and in the longer term.
The
Transaction is expected to be earnings per share accretive after two years (on
a fully diluted basis assuming satisfaction of the ASDI in full by market purchases
of existing shares). Heineken believes that the Transaction will deliver
positive economic profit after six years.
The
all share nature of the deal allows the combined entity to maintain a robust
financial position, supported by strong cash flow generation. Heineken's net
debt/EBITDA ratio as at 30 June 2009, proforma for the Transaction, remains
largely unchanged at 3.1 times (prior to the satisfaction of the ASDI).
8.
Management, Employees and Integration
Heineken
very much values the skills and enthusiasm of the management and employees of
FEMSA Cerveza and look forward to welcoming them into the larger Heineken
group. The existing employment terms and conditions, including pension rights,
of FEMSA Cerveza's employees, will be appropriately safeguarded.
Heineken
has considerable experience of integrating newly acquired operations into the
group in a fast and efficient manner, minimizing disruption for all
stakeholders. Planning in this respect is already well advanced, taking
advantage of the considerable time and resources that have been invested to
date in evaluating the FEMSA Cerveza business.
9.
Agreements
Summary of the principal
terms of the Share Exchange Agreement
Heineken
N.V. and Heineken Holding entered into a Share Exchange Agreement with FEMSA on
11 January 2010, under which Heineken N.V. will exchange approximately 86
million new Heineken N.V. shares (and a further 29 million Heineken N.V. shares
underlying the ASDI) for 100% of FEMSA Cerveza. Simultaneous to the issue of 86
million new Heineken N.V. shares to FEMSA at closing, FEMSA will exchange
approximately 43 million of the new Heineken N.V. shares for an equal number of
Heineken Holding shares. Following this exchange Heineken Holding will continue
to hold a 50.005% shareholding in Heineken N.V. The transactions will result in
FEMSA owning (post satisfaction of the ASDI in existing shares) an economic
interest of 20.0% in the Heineken Group.
Completion of the Transaction
is conditional on the approval of FEMSA, Heineken N.V. and Heineken Holding
shareholders and approval from certain Mexican and US regulatory authorities.
FEMSA
has given a range of warranties and indemnities to the Heineken Group in
respect of FEMSA and FEMSA Cerveza and its subsidiaries and their businesses
which are customary for a transaction of this nature, and the Heineken Group
have given certain customary warranties and indemnities concerning the Heineken
Group. FEMSA and FEMSA Cerveza and its subsidiaries will conduct their business
in the ordinary course between signing and completion, subject to certain
customary exceptions.
If
the Transaction is not approved by FEMSA and its shareholders, or the FEMSA
board of directors withdraws or modifies its recommendation to the FEMSA
shareholders to approve the Transaction, or announces an intention to do so, or
if the FEMSA board of directors has endorsed or announced an intention to
endorse an alternative acquisition proposal, FEMSA will pay to Heineken USD200
million. Equally, if the Transaction is not approved by the Heineken Group and
its shareholders, Heineken shall pay to FEMSA USD200 million.
Summary of the principal
terms of the Corporate Governance Agreement
Heineken
N.V., Heineken Holding, L'Arche Green N.V. and FEMSA will enter into a
Corporate Governance Agreement at completion, under which FEMSA, among other
things:
-will receive
appropriate representation on the board of Heineken Holding and the supervisory
board of Heineken N.V.;
-will commit not
to increase its holding in Heineken Holding above 20% and not to increase its
holding in the Heineken Group above a maximum 20% economic interest; and
-will agree not
to sell any shares in Heineken N.V. or Heineken Holding for a five year period,
subject to certain exceptions, including, beginning in year three, the right to
sell up to 1% of all outstanding shares of each of Heineken N.V. and Heineken
Holding in any calendar quarter.
In
terms of board representation, FEMSA will be entitled to appoint two
representatives to the Heineken N.V. Supervisory Board, one of whom will be
appointed as a Vice Chairman of Heineken N.V. and will also serve as the FEMSA
representative on the Heineken Holding Board.
Jose
Antonio Fernandez Carbajal, the current Chairman of the Board and CEO of FEMSA,
will be the initial FEMSA representative to serve on the boards of Heineken
N.V. and Heineken Holding. The second representative to be appointed by FEMSA
to the Heineken N.V. Supervisory Board will be a member of the senior
management team of FEMSA.
In addition, the Supervisory
Board of Heineken N.V. will create an Americas Committee to oversee the
strategic direction of the business in the Americas and assess new business opportunities
in that region. The Americas Committee will consist of two existing members of
the Supervisory Board of Heineken N.V. and one FEMSA representative who would
act as the Chairman.
In
certain circumstances, FEMSA would be entitled to only one representative on
the Heineken N.V. Supervisory Board, including in the event that FEMSA's
economic interest in the Heineken Group were to fall below 14%, the current
FEMSA control structure were to change or FEMSA were to be subject to a change
of control. In the event that FEMSA's economic interest falls below 7%, or a
beer producer acquires control of FEMSA, all of FEMSA governance rights would
fall away.
The
Corporate Governance Agreement has no fixed term, but certain provisions cease
to apply if FEMSA ceases to have the right to nominate a representative to the
board of Heineken Holding and the supervisory board of Heineken N.V.
10.
Other
The
Transaction is conditional upon the approval of regulatory authorities in
Mexico and the USA, as well as the approval of Heineken Holding, Heineken N.V.
and FEMSA shareholders. Circulars will be posted to shareholders in due course
and, if approved by shareholders, completion of the Transaction will
immediately follow these shareholder meetings.
Heineken
Holding, the controlling shareholder of Heineken has committed to vote in
favour of the proposed transaction as has L'Arche Green N.V., the controlling
shareholder of Heineken Holding, at the respective shareholder meetings. In
addition, the Voting Trust which controls 39% of FEMSA has entered into an
undertaking to vote in favour of the Transaction at the FEMSA shareholder
meeting.
Following
completion, Heineken N.V and Heineken Holding will make applications for new
ordinary shares under the transaction to be admitted to listing and trading on
the Amsterdam Stock Exchange.
This
announcement has been issued by Heineken N.V. and is the sole responsibility of
Heineken N.V. Heineken Holding, who has received its own financial and legal
advice, will make a separate announcement in respect of this transaction.
Credit
Suisse is acting as sole financial adviser to Heineken N.V. in connection with
the proposed transaction and Gibson Dunn as lead legal adviser.
-End-
Press
release P.O. Box 28 – 1000
AA Amsterdam – The Netherlands 1 of 12 Office address Tweede Weteringplantsoen, 21 – 1017 ZD
Amsterdam Heineken N.V. – Registered Office at Amsterdam – Trade Register
Amsterdam No. 33011433