Ethiopia: Heineken International to expand on Ethiopian beer market by takeover of two local breweries

Heineken International, the leading Dutch brewing company, will sign next week an agreement with the Ethiopian privatisation and public enterprise supervision authority (PPESA) for the purchase of two local breweries – Harar Brewery SC and Bedele Brewery SC – for more than US$ 163 million, The Africa Report announced on August, 1.

The deal to buy the two breweries was reached early this year after months of negotiations.

According to PPESA, Heineken’s bid to buy Harar and Bedele for US$ 78.18 million and US$ 85.24 million, respectively, was approved in April.

Heineken’s bid for Harar Brewery was won without competition but it had to brush aside three competitive bids for Bedele.

The Dutch giant beat a US$70 million dollar bid from South-West Development, a US$ 68 million challenge from BGI and a US$ 64 million offer from Carlsberg.

Heineken will continue to brew local brands such as Bedele, Harar and Hakim Stout, which have a combined market share of 18% in Ethiopia.

The deal will make the company the second biggest brewer in Ethiopia, after BGI Castel, which has a 50% market share.

Harar brewery is located in the historical town of Harar about 530 km east of Addis Ababa, and is the only brewery in the eastern part of the country.

It is the closest brewery to the Djibouti and Somalia ports, giving the company a chance to export.

03 August, 2011