Heineken Divests Packaging Operations in Mexico
01 Sep 2014 --- Heineken N.V. has signed a binding agreement with Crown Holdings Inc ('Crown') for the sale of its Mexican packaging business EMPAQUE. The total enterprise value1 of the transaction amounts to USD 1.225bn. The transaction is expected to close by the end of the year and is subject to customary closing conditions and required regulatory approvals.
Divesting the EMPAQUE packaging operations will allow HEINEKEN to focus its resources fully on brewing, marketing and selling its world class portfolio of beer brands.
In 2013 EMPAQUE generated revenue of EUR 495m (c. USD 660m), mostly intercompany, and EBITDA of EUR 96m (c. USD 130m). The 2013 EBIT (Beia) was EUR 67m (c. USD 95m).
EMPAQUE's financial results to date have been included under the "Head Office" reporting unit in HEINEKEN group results.
Following the divestment, EMPAQUE will remain a key strategic supplier to Cuauhtémoc Moctezuma, HEINEKEN's wholly owned subsidiary in Mexico, through long-term supply contracts.
As previously communicated, Heineken expects to reach its target net debt/ EBITDA (beia) ratio of below 2.5x by the end of 2014. The proceeds of this divestment will provide further financial flexibility.
The sale of EMPAQUE is expected to result in a post-tax book gain of approximately €300m. This will be reported as an exceptional item.
EMPAQUE, which was acquired by HEINEKEN in 2010 as part of the FEMSA Cerveza acquisition, produces metal beverage cans, crown corks, aluminium closures and glass bottles. A transfer of ownership to Crown, a dedicated, global leader in consumer packaging, will benefit the development of EMPAQUE in the long term and is expected to deliver additional career opportunities for its employees.
Jean-François van Boxmeer, Chairman of the Executive Board/CEO of Heineken N.V. commented: "We are confident that EMPAQUE will flourish under its new ownership and we look forward to our ongoing partnership. We would like to thank everyone at EMPAQUE for the excellent performance over the years, and wish the business every success for the future."
Moelis & Company UK LLP and Gibson Dunn & Crutcher acted as advisors to HEINEKEN for this transaction.
