Heineken takes over Kirin Brasil in €1.025 billion deal

Dutch brewer Heineken has agreed to acquire Kirin's Brazilian business for €664m.

The transaction is expected to be dilutive to HEINEKEN's margin in 2017.

The total value of retail sales in the Brazilian beer market is projected to grow at a CARG 2.3% by 2020, according to Euromonitor, which places the country's total volume consumption behind the U.S. and China, but higher than other beer traditional markets such as Germany and UK.

Kirin said that Brazil's economic risks and a stagnant and competitive beer and soft drink market meant there were "limitations" to making Brasil Kirin profitable.

Along with the five breweries and sales network that it bought from Femsa in 2010, Heineken will become a significant player in what is the world's third largest beer market, after China and North America. The purchase does not add any additional brands to Heineken's current portfolio of 250 beer labels. Its revenue for the period was $1.18bn, with an operating loss before amortisation of goodwill of about $84m.

More news: Mike Francesa: Victor Cruz's Giants Career Was Surprising, Not His Release

The acquisition is subject to approval from Brazilian regulatory authorities and is expected in the first half of this year.

Heineken said the deal will transform its existing business across the country by extending its footprint, increasing scale and further strengthening its brand portfolio.

Japanese brewer Kirin announced on Monday that it would sell its Brazilian breweries to Dutch beer giant Heineken. "I look forward to welcoming our new colleagues from Brasil Kirin into HEINEKEN and working with them to take the combined business forward".

Heineken is buying Brasil Kirin from Japan's Kirin Holdings Co.

Edition: