Diageo Plc (DGE), the maker of Guinness stout and the world’s largest liquor company, dropped plans to bid for Primo Schincariol Industria de Cervejas & Refrigerantes SA of Brazil, two people familiar with the matter said.
London-based Diageo walked away amid disagreements among the Brazilian brewer’s family shareholders, said one of the people, who declined to be identified because the talks were private. Brewers including Heineken NV (HEIA) have been considering bidding for the Itu, Brazil-based company, which may be valued at about $4 billion, one person said.
The sale process has slowed on concern that the buyers may not succeed in gaining control because some of the company’s family owners oppose a sale, the people said.
It’s unclear whether Schincariol will end up being sold, the people said. A spokesman for the Brazilian brewer at FSB Comunicacoes, a communications company, declined to comment.
Diageo’s decision not to pursue Schincariol means it will need to find another way of expanding in Latin America beer. The company is examining ways to “do something appropriate and constructive in beer” in the region, Stuart Fletcher, outgoing president of the international unit, said on June 2.
Heineken, the world’s third-largest brewer by volume, was said in May to be reviewing a possible bid for Schincariol, which is Brazil’s second-largest brewer behind Anheuser-Busch InBev NV. SABMiller Plc (SAB), which last month bid A$9.5 billion ($10.2 billion) for Australia’s Foster’s Group Ltd., may also be interested.
SABMiller spokesman Nigel Fairbrass and Heineken spokesman John Clarke both declined to comment.