Russia: The Netherlands’ brewing force, Heineken NV, is extending in Siberia. The Dutch brewer announced on Friday, October 1, it has acquired 100% of Sobol Beer LLC in Novosibirsk, Western Siberia. The transaction will be funded from available cash resources, the company revealed.

Heineken St Petersburg brewery is to reach its maximum capacity by 2005 growing by 15% per annum. That is why, the acquisition will provide for immediate additional production capacity for the national brands Bochkarev and Ohota, the company added on October 1. The parties did not mention the acquisition price.

According to different financial analysts Sobol Beer worth US$50 million. However, some sources revealed that Heineken paid about US$70 million for the brewery. Negotiation between companies started in April this year. Some other companies like Sun Interbrew, Efes and Alfa-Eco were interested in purchasing Sobol Beer.

Besides Bochkarev and Ohota Heineken plans also to keep brewing Sobol and Zhigulevskoye at Sobol Beer brewery. Heineken intends to invest about EUR 20 million in the plant and to reach a production capacity of 170 million litres of beer per annum. Now the brewer output about 20 million litres of beer.

Heineken has already upped its presence in Russia, stating that it expects the Russian beer market as a whole to grow by a further seven per cent during 2004. In August this year, Heineken became the third biggest company in Russia’s beer market after acquiring WBD shareholders’ controlling stake in the Volga and Shikhan breweries making up the Central European Brewing Company (CEBCO). Heineken said by 2007 it plans to reach about 9.2% of the Russian beer market.

"This acquisition fits perfectly with our growth strategy for Russia following our recent acquisition of the Shikhan and the Volga Breweries. It reinforces our number three position and further strengthens our distribution and sales platform in this fast growing beer market," Jean Francois van Boxmeer, member of the executive board of Heineken NV said.

05 October, 2004