Heineken has purchased Asahi cider brands Strongbow, Bonamy’s and Little Green and the Australian rights to beer brands Stella Artois and Beck’s.
Asahi said the deal remains subject to regulatory approval, which is expected in the December quarter of 2020. The Australian Financial Review said the deal is believed to be worth more than $200 million.
Amatil and Heineken were understood to be the final contenders for the portfolio, which Asahi was required to sell as part of the Australian Competition and Consumer Commission’s requirements for giving the all-clear to its Carlton & United buyout.
Coca-Cola Amatil confirmed on Monday that it had received a buy-out offer from Coca-Cola European Partners (CCEP). The $9.3 billion deal includes the acquisition of all shares held by its independent shareholders and the separate acquisition of Amatil shares held by The Coca-Cola Company.
The Australian speculated that CCEP would “be against any deal involving Coca-Cola Amatil acquiring a beer business”, given that it tends to steer clear of the alcoholic beverages market.
However, Atlas said the proposal did not preclude Amatil from undertaking bolt on acquisitions.
“We’ve agreed terms with CCEP that would allow us to continue to progress any material transactions that … are strategically logical and add value for the long term,” she said.
The AFR reports: “Amatil declined to comment on the transaction and it is not known whether Amatil was outbid by Heineken, whether the soft drink bottler withdrew its offer in the wake of the proposed CCEP bid, or whether it was keeping its powder dry to bid for Lion Dairy & Drinks’ flavoured milk brands.”
Investment bank Rothschild has been running an auction for the brands it was required to offload – and final offers were received several week ago.
The Asahi cider brands account for about 20% of the Australian cider market, with Strongbow being about 18%.
Heineken said in a statement that the sale agreement requires Asahi to ensure the divested brands receive the same access to bars, pubs and clubs as well as off-premise space under tap-tying agreements as Asahi’s brands until June 2023.
Jacco van der Linden, President of Heineken Asia Pacific said the group wanted to ”scale up” its beer and cider portfolio.
The brands acquired in the deal will be distributed in Australia by Drinkworks, the Australian sales and marketing arm of DB Breweries Limited (DB), Heineken’s wholly-owned Australasian subsidiary.
Drinkworks distributes a range of Heineken and DB beers and ciders in Australia, including Tiger, Sol, Monteith’s Beer and Cider and Orchard Thieves Cider.
Concerns about competition
The Independent Brewers Association Chair Peter Philp told Brews News he continues to be concerned about the issue of competition in the on-premise tap market.
“It clearly demonstrates that the only way to break into the on-premise market owned by the duopoly of CUB (Ashahi) and Lion (Kirin) is to acquire brands,” he said.
“Small independent breweries don’t have the balance sheet of companies like Heineken so what chance do we have to compete?”