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Heineken taps Cruzcampo
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June 10, 1999: 3:32 p.m. ET
Dutch brewer buys Diageo's stake in Spanish beer-maker for more than $900M
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NEW YORK (CNNfn) - Heineken bellied up to the bar Thursday and bought Diageo's majority stake in Cruzcampo, Spain's largest brewery, for more than $900 million.
The Netherlands-based Heineken, the world's second largest brewer after Anheuser-Busch (BUD), said it would integrate Cruzcampo with El Aguila, Spain's third largest brewer, to form one company.
Heineken owns 72 percent of El Aguila, which has a 14.5 percent share of the Spanish market. El Aguila is based in Madrid and has two breweries.
The merger will give Heineken a 37 percent share of Europe's third largest beer market, behind Germany and the United Kingdom.
The Cruzcampo purchase adds five breweries to Heineken's Spanish holdings. Heineken's strategy in Spain largely mirrors what the company has done in Poland, where it also became the No. 1 brewer through a string of purchases.
The deal is contingent upon regulatory approval from the European Commission.
London-based food and beverage marketer Diageo valued the sale at about $570 million pounds, or more than $900 million, on a debt-free basis.
The move is a further step in Diageo's plan of growing stout worldwide and ditching lager. Guinness bought Cruzcampo in 1991 and Guinness, in turn, merged with Grand Metropolitan to form Diageo in December 1997.
Diageo also owns Burger King and Pillsbury brands.
--from staff and wire reports
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