Heineken acquires Ivan Taranov Breweries in Russia

17/08/05 Heineken N.V. announced today has signed an agreement to acquire 100% of Ivan Taranov Breweries (ITB), based in Cyprus and the owner of 3 breweries in Kaliningrad, Novotroitsk and Khabarovsk, Russia.

As part of the transaction, Heineken will also have an option to acquire Severnye Vetry Distribution, (SVD), the distribution business of ITB, which contains 23 companies across Russia.

The transaction will be funded from available cash resources and is subject to regulatory approval. The acquisition is expected to be earnings enhancing in 2006 and value enhancing in 2011. As agreed by both parties the acquisition price will not be disclosed. The closing is expected at the end of September 2005.

As a result of this transaction, the market share of Heineken in Russia will increase to 14%, with volumes of over 11.4 million hectolitres, further strengthening the number three position of Heineken in the world’s fifth largest and rapidly growing beer market.

Jean François van Boxmeer, member of the Executive Board of Heineken N.V. commented: “The acquisition of Ivan Taranov Breweries improves our competitive position in Russia, further extends Heineken’s network of regional production and distribution units spread over Russia and enriches our broad portfolio of brands in Russia with more growing brands. We are impressed by the high level of professionalism of the ITB company and are convinced that this will add value to Heineken’s growing organisation in Russia.”

The head office of ITB’s brewing and distribution operations is located in Moscow. The breweries have a sales capacity of 3.5 million hectolitres, of which Kaliningrad represents 1 million hectolitres, Novotroitsk 1.3 million hectolitres and Khabarovsk 1.2 million hectolitres. The portfolio consists of licensed brands (Gösser, Bavaria, Bitburger, Königsberg), national mainstream brands (PIT, Doctor Diesel, Three Bears) and regional brands (Amur Pivo, Ostmark), which represented a total volume of 2.9 million hectolitres of beer in 2004. ITB also produces Coors. In 2004, national market share of ITB was 3.4%.

Since August 2004, Heineken has acquired 5 breweries in Russia: Volga in Nizhny Novgorod (Northwest of Volga), Shikhan in Sterlitamak (Southeast of Volga), Sobol in Novosibirsk (West Siberia), Patra in Yekaterinburg (Urals) and Stepan Razin in St. Petersburg (North-West).