Heineken eyes Bass
Coming off big year, Dutch brewer may go shopping for growth
Mar 2, 2000 - Heineken, the world's No. 2 brewer, said it has entered the bidding for the Bass brewing operation, but is interested only if the premium to be paid doesn't exceed the savings opportunities.
The Dutch company hopes to keep profit growing after a 20% increase in the second half of 1999. "Bass would be a perfect fit in our strategy to achieve a broad leadership in a large beer market," Chief Executive Karel Vuursteen said Thursday at a company press conference to discuss its jump in earnings.
Acquisitions, such as that of Brewpole in Poland, have added to Heineken's bottom line. Heineken raised its stakes in both Poland's Zywiec and rival Brewpole, two companies which it subsequently merged to form the country's biggest brewer. Earnings will be lifted this by the addition of Grupo Cruzcampo, a purchase that made Heineken Spain's leading brewer.
Bass wants to sell its brewing business to focus on its more profitable pubs and international hotels. The brewing unit started in the British brewing capital of Burton-on-Trent in 1777. It brews one in four of Britain's pints but, unlike the other two big national brewers, owns its top brands including the nation's best selling beer Carling, together with Worthington, Bass and Caffrey's ales. It also has brewing interest in the Czech Republic and China.
Industry sources said a decision on any sale was unlikely to come before Bass's half-year results in May and probably would be delayed until after mid-August, when the Office of Fair Trading is due to publish its investigation into pricing and consumer choice in the British beer industry.
Carlsberg, South African Breweries, Interbrew and even Anheuser-Busch have been rumored as other possible suitors.
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