(37,1 EUR, -0,74%) announced yesterday evening after market close it has completed the acquisitions of the Bedele and Harar breweries from the Ethiopian government. The acquisitions are no surprise as already issued a press release previously to comment on its participation in the public auctions for the breweries
The acquisition price for the Bedele and Harar breweries is $ 85m and $ 78m, respectively. The breweries have a combined market share of 18% in the Ethiopian beer market, which represented about 3m hl in 2010.
Our View:
The acquisition in Ethiopia is a nice add-on to Heineken’s existing and well performing African beer business. Ethiopia is Africa’s most populated country with about 85m people and per capita consumption currently stands at only 4 litres, well below the global average of about 27 litres.
The lack of details on the financial performance of Bedele and Harar make it difficult to judge the deal, which remains however relatively small and certainly seems to make sense from a strategic growth perspective. We stick to our BUY rating and € 50 target price.