Russia: Heineken acquires Stepan Razin brewery in Russia

Heineken N.V. announced on July 6 that it has already signed an agreement to acquire 100% of Stepan Razin brewery in St. Petersburg, Russia.

The transaction will be funded from available cash resources and is subject to regulatory approval. The acquisition will be earnings enhancing in 2006 and is value enhancing in 2007. As agreed by both parties the acquisition price will not be disclosed.
As a result of this transaction, Heineken's market share in Russia will grow to 10%, with volumes over 8 million hectolitres, further strengthening the number three position of Heineken in the world's fifth largest and rapidly growing beer market.

Jean François van Boxmeer, member of the Executive Board of Heineken N.V. commented: "With the latest acquisition of the Stepan Razin brewery, Heineken obtains market leadership in St. Petersburg and acquires the leading regional Stepan Razin brand, which has a longstanding heritage and a national potential."

The Stepan Razin brewery is based in the number two city in Russia, St. Petersburg,situated in the North-West region, which accounts for 13% of the total beer market. Following this acquisition, Heineken will gain a number one position in St. Petersburg and a number two position in the North-West region, growing from a 14% market share to a combined market share of 32%. The brewery has a sales capacity of 2.3 million hectoliters. The portfolio consists of the regional beer brands Stepan Razin, Kalinkin and Ordinar, which represented a total volume of 1.4 million hectolitres of beer in 2004. In 2004, national market share of Stepan Razin was 1.7%, market share in the North-West region was 18% and in St. Petersburg the market share was 32%.

Heineken in Russia holds a portfolio of the international and national brands Heineken, Buckler, Bochkarev, Ohota, Stepan Razin, Löwenbrau (the latter is brewed under license), Draught Guinness and Kilkenny (distribution from 1 July 2005) and the regional brands Shikhan, Sedoy Ural, Solyanaya Pristan, Okskoye, Volga, Rusich, Sobol, Patra, Strelets, Zhigulevskoye, Kalinkin and Ordinar.

The Russian beer market is expected to grow by more than 5% to over 89 million hectolitres in 2005.

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