Heineken signs €1.9 billion deal with Chinese brewery

Heineken bought a 40 percent stake in the China Resources Beer, the largest beer brewer in China, in a deal that cost the Dutch beer giant a total of over 1.9 billion euros. In practice the deal enables Heineken to sell its assets in China to CR Beer, and that CR Beer will sell Heineken products under its license through its widespread network, ANP reports.

Heineken will earn money in this deal through royalties, which the Dutch company partly wants to invest in China again, according to the news wire. With this deal, Heineken gets more opportunity to put its own beer brands forward in China, which is the largest beer market in the world. Heineken already has similar licensing deals in Australia and Canada. 

CR Beer is the brewer of, among other things, Snow - in volume the largest beer brand in the world. According to Heineken CEO Jean-Francois van Boxmeer,  Snow is a "light, refreshingly real Chinese beer". It costs about half of what Heineken does. Heineken is already available in China, but only in a limited part of the country. Through CR Beer, Heineken and, to a more limited extent, Amstel and Tiger, will eventually be sold everywhere Snow is now being sold. 

Heineken paid 24.4 billion Hong Kong dollars, 2.7 billion euros, for its interest in CR Beer, which in turn bought 0.9 percent of Heineken's shares for 464 million euros. CR Beer will also gain control of Heineken's three Chinese breweries, worth around 263 million euros.