FDBusiness.com

Heineken is selling its Finnish multi-beverage business Oy Hartwall for €470 million to Danish Royal Unibrew. The transaction is expected to close in the fourth quarter of 2013 at the latest and is subject to customary closing conditions, including anti-trust approvals.

Heineken and Royal Unibrew have also agreed on the principles of extending their existing partnership to the effect that, for the next ten years, Royal Unibrew will obtain a license to brew Heineken beer for Finland, Estonia, Latvia and Lithuania. At the moment Royal Unibrew already brews the Heineken brand in Denmark and distributes the brand in the Baltic countries. In addition, Hartwall will remain the exclusive distributor of Heineken’s global and international brands in Finland, including Sol, Strongbow, Newcastle Brown Ale, Krušovice and Murphy’s Irish Stout, and will continue to brew Foster’s beer under license in the country.

Jean-François van Boxmeer (pictured), chairman and chief executive of Heineken, comments: “We are convinced that Hartwall’s future development is best served as part of Royal Unibrew, our long-time business partner in Denmark and an important beverage company in the Nordics and Baltics region. We look forward to building on our business in the region working together with Royal Unibrew.”

Henrik Brandt, chief executive of Royal Unibrew, says: “We really value Hartwall’s market position, strong brands and considerable innovation, and the acquisition of Hartwall supports Royal Unibrew’s strategy very well. Hartwall and the Finnish market are in many ways similar to our Danish operations, and we are confident that, as a long-term focused owner and in close partnership with the company’s management and employees, we will be able to increase Hartwall’s commercial and operational strength and thus improve earnings.”

Heineken will use the proceeds of the Hartwall divestiture to reduce its financial leverage, whereby the company is targeting a Net Debt/EBITDA (beia) ratio of below 2.5 times by the end of 2014. Heineken acquired Hartwall as part of the Scottish & Newcastle transaction in 2008.

Royal Unibrew operates as a leading regional player in a number of markets in Western and Eastern Europe, including Denmark, Germany, Italy, Lithuania and Latvia. Royal Unibrew’s main brands include Royal, Ceres Strong Ale, Cido, Kalnapilis, Faxe Premium and Vitamalt. In 2012, the company posted revenue of DKr3.4 billion (Eur455 million) and sold 5.4 million hectolitres of beer, malt and soft drinks. The group, which is based in Faxe, Denmark, has around 1,600 employees.