17 Apr 2012 --- Anheuser Busch InBev, the world's biggest brewer, has agreed to buy around a 51 percent stake in the Dominican Republic brewer Cerveceria Nacional Dominicana (CND) from two sellers for over $1.2 billion.

The Budweiser brewer is paying around $1 billon for a 41.76 percent stake in the Dominican Republic's leading brewer from majority shareholder E. Leon Jimenes, which itself owns 83.5 percent of CND, and also will pay $237 million for Heineken's 9.3 percent stake in CND.

The Belgium-based brewer said that it plans to create the leading beverage company in the Caribbean region with businesses in beer, malt and soft drinks, and operations in the Dominican Republic, Antigua, St Vincent and Dominica.

Upon closing of the transaction, AmBev Brasil Bebidas S.A., a closely-held subsidiary of AmBev, and ELJ will be the shareholders of Tenedora CND S.A., a holding company which will own 83.5% of the shares of CND and 100% of AmBev Dominicana S.A., with AmBev Brasil owning an initial indirect 41.76% interest in CND.

The parties will enter into a shareholders’ agreement with respect to the governance of the holding company, including board representation and voting rights, pursuant to which AmBev Brasil will nominate 5 members of the holding company’s Board of Directors and ELJ will nominate 4 board members, among other provisions.

The shareholders’ agreement also provides for restrictions on the transfer of shares and a put and call structure. AmBev will report CND’s results on a fully consolidated basis.

AmBev’s initial indirect interest in CND will be acquired through a cash payment of approximately $1.0 billion and the contribution of AmBev Dominicana. The combined entities would have had net revenues of approximately $570 million in 2011 and are expected to have an estimated combined EBITDA for the first 12 months of operations of approximately $190 million, which implies an V/EBITDA multiple of approximately 13x.

The transaction is also expected to be EPS accretive in the first year of operations. The closing of the transaction, which is subject to customary conditions precedent, is expected to take place in the second quarter of 2012.