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FEMSA divests 5.24% stake in Heineken for EUR2.5bn

DBR Staff Writer Published 19 September 2017

Mexico’s Fomento Económico Mexicano (FEMSA) has sold a stake of 5.24% in Dutch brewing giant Heineken for €2.5bn.

The sale included a combination of existing issued ordinary shares of both Heineken N.V. and Heineken Holding N.V. (jointly "Heineken Group").

The equity offering was implemented through an accelerated bookbuilding offer to institutional investors outside of Mexico. It was managed by J.P. Morgan Securities, Morgan Stanley and UBS.

The equity offering included 22.48 million shares in Heineken which is about 3.90% of share capital at a price of €84.50 per share. Toatl gross proceeds raised were about €1.9bn.

It also included 7,700,000 shares in Heineken Holding N.V. representing 2.67% of the issued share capital at a price of EUR78.00 per share, raising gross proceeds of approximately about €600m.

FEMSA’s stake in Heineken N.V. will decrease from 12.53% to 8.63% and in Heineken Holding from 14.94% to 12.26%. FEMSA will see in an overall decrease in its stake in Heineken Group from 20% to 14.76%.

FEMSA says that the equity offering completion is expected to take place on 21 September 2017.

Even after the sale of stake, the Mexican bottling company says that it will retain its existing governance rights, including one seat on the Board of Directors of Heineken Holding and two seats on the Supervisory Board of Heineken, as per the Corporate Governance Agreement signed in April, 2010.

FEMSA CEO Carlos Salazar Lomelín said: "We have long held a very positive view of Heineken as a long-term investment. The transaction priced today does not represent or reflect a change in our view or expectations. 

“However, the Equity Offering will allow us to partially monetize our position while retaining our existing governance rights in Heineken, taking advantage of the favorable tax treatment afforded by the Repatriation Decree issued by the Mexican Government. 

“In accordance with the Decree, we plan to invest the proceeds of the Equity Offering to support our growth initiatives in Mexico in the coming years."

Image: FEMSA plans to sell its stake in Heineken. Photo: Courtesy of Heineken N.V.