CADE approves purchase of Kirin by Heineken

Sao Paulo and Brasilia-the Administrative Council for economic Defense (Cade) yesterday approved the acquisition of Brazil Kirin by Heineken, announced in February.
The operation created the second largest brewery in Brazil. In addition to the main brand, Heineken already traded in Brazil the labels Kaiser, Bavaria, Amstel, Sun, Desperados and Xingu.
Brazil already Kirin owns the beer Devassa, Schin, Baden Baden, Cintra and Ice. Operates in the sector of soft drinks and mineral water.
The Cade understood that the operation does not cause concentration greater than 20% in the domestic market nor greater than 50%. So does not generate competition concerns.
In announcing the deal, Heineken has assessed that the acquisition would increase the company''s reach across the country. The company had fewer units to Brazil: only five Kirin Breweries.
Heineken paid R $2.2 billion for the network of 12 competing factories, less than half of the approximately R $6 billion invested by Japanese company, in 2011, to acquire the Schincariol.
With the Kirin, Heineken passes to hold 19% of the domestic market, according to data reported by the Dutch company based in numbers of research company Canadean.
With that, she will be Brazil''s second largest brewery, leaving behind the Grupo Petrópolis, with about of 15%, according to data from Nielsen. In the absolute leadership, Ambev follows with its more than 65% of market share.
In addition to Ambev competitors and Grupo Petrópolis, Brazilian Federation of associations of Brazil, Kirin Distributors (Febradisk) also entered as interested in the process.
Dealers said fear that the transaction puts your activity at risk.
The Febradisk asserts that the contracts with the Kirin made Brazil the exclusivity and cited analyses assessing the new driver could dispense with the distribution network.
Market
Data from the Brazilian Association of food industries (Abia) point out that industry sales of drinks in Brazil had a nominal growth of 7.2% in 2016, compared to 2015, below the inflation for the period.
Brazil''s recipe Kirin grew 0.2 percent in the year, reaching $3.706 billion, according to the report the company.
In the global market, Heineken had net profit of ¤ 293 million in the first quarter of 2017, 11% greater than the gain from same period in 2016.
In the same comparison, organic beer sales rose 0.6%, driven by results in Europe and in the region of Asia and the Pacific.
The sales data surprised, since analysts had predicted a fall of 0.5% in the last quarter. The company gets about two-thirds of your profit in emerging markets such as Brazil.