Heineken named preferred bidder for two breweries in Ethiopia

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Heineken N.V. today announced that the government of the Federal Democratic Republic of Ethiopia has named the company as the preferred bidder for the Bedele and Harar breweries. The winning bids for the breweries were US$85 million and US$78 million, respectively. Heineken will now work with the government to finalise the transaction. The decision follows Heineken’s participation in the public auction for the two breweries.

Commenting on today’s announcement, Tom de Man, President of Africa and Middle East for Heineken, said:

“We are delighted that our offer to acquire these two breweries has been selected as the winner by the Ethiopian Privatization and Public Enterprise Supervising Agency. This transaction represents another important step in Heineken’s strategy of increasing its exposure to emerging markets and we look forward to working with the Ethiopian government to grow the Ethiopian beer market and economy. Ethiopia is one of Africa’s most promising beer markets and our expansion into this market underlines our commitment to Africa and strengthens our platform for continued growth in the region.”

The two breweries have a combined market share of 18% with brands such as Bedele, Harar, Hakim Stout and Harar Sofi (malt).

Ethiopia is Africa’s second most populated country with 85 million people and its beer market (3 million hectolitres in 2010, source Plato) grew approximately 20% per year over the past 5 years, compared to a GDP growth of 8%. Beer and non-alcoholic malt consumption in Ethiopia was approximately 4 litres per capita in 2010, which is well below the global average of 27 litres and below beer consumption in neighbouring countries, such as Tanzania (7 litres), Uganda (9 litres) and Kenya (10 litres). In addition to a fast growing population and a developing beer market, the country’s political stability and improving economy, make Ethiopia a promising, long-term growth market for Heineken in Africa.