Heineken has lined up a consolidatory transaction in Central America based on the acquisition of the beverage and retail operations owned by FIFCO in the region.
The Amsterdam-headquartered group confirmed late yesterday (22 September) that it will spend US$3.2bn on FIFCO’s brands and assets in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Mexico. The two companies have worked together in Central America since 1986.
Starting in Costa Rica, FIFCO – whose full name is Florida Ice & Farm Co – will divest its 75% stake in Distribuidora La Florida, which, as well as beverages, also operates around 300 “proximity retail outlets” in the country. Heineken bought the remaining 25% of the business in 2002.
In Nicaragua and Panama, FIFCO’s 75% holding in Nicaragua Brewing Holding, which holds a 49.85% stake in Compañía Cervecera de Nicaragua (CCN), and 25% interest in Heineken Panama will also head to Heineken. As well as the Toña and Victoria beer brands, CCN also has soft drinks operations and owns 250 “proximity (retail) outlets”.
Finally, FIFCO’s ‘beyond beer’ business in Mexico and its “overall operations” in El Salvador, Guatemala and Honduras are included in the purchase.
FIFCO is “exploring strategic alternatives for FIFCO USA”, according to Heineken.
“Following completion, Heineken and/or its affiliates will hold 100% ownership of Distribuidora La Florida, Heineken Panama and FIFCO Mexico, and 49.85% of Compañía Cervecera de Nicaragua,” the company added.
Heineken highlighted its pending inheritance of the Imperial beer brand (above) in Costa Rica, where Distribuidora La Florida also produces soft drinks; amongst its own brands is Tropical alongside a bottling licence for PepsiCo. Indeed, with a market leadership position in the country, Distribuidora La Florida will be “one of Heineken’s top five operating companies by operating profit”.
The full transaction is expected to complete during the first half of next year.
“Today marks a transformative milestone for Heineken as we join forces with FIFCO to unlock new growth opportunities,” said Heineken CEO Dolf van den Brink. “By integrating FIFCO’s iconic brands, deep market expertise and exemplary sustainability credentials, we are … entering new profit pools across Central America.”
At the start of this month, Heineken commenced the search for a new regional lead in the Americas as Marc Busain prepared his departure to Lipton Teas & Infusions, where he will take on the CEO role from 1 October.
