Heineken to acquire remaining shares in Red Stripe brewer Desnoes & Geddes

Wanting to be home alone, the Dutch beer giant Heineken announced on 6 November 2015 that it was buying all the outstanding shares of Jamaican brewer Desnoes & Geddes to gain 100 percent control of the company.

The move comes after Heineken in October 2015 acquired the 57.9-percent stake in the company that had been owned by Diageo, the world’s number one drinks company. Including its own shares, Heineken now holds 73.3 percent of the Jamaican company, which produces Red Stripe and Dragon beers.

It is offering to snap up the remaining ordinary shares at USD 0.259 each, in a tender that is open until 22 December 2015.

Heineken bought Jamaica’s Red Stripe beer from Diageo for USD 421 million in an asset swap valued at USD 781 million.

Under Jamaica’s stock market rules, Heineken has to make a buy-out offer for all other Desnoes & Geddes shares for an implied consideration of USD 194 million.

The deal with Heineken prices Red Stripe at just under USD 727 million, or 37 times earnings, media say. According to the Barth Report, Desnoes & Geddes produced an estimated 950,000 hl beer in 2014.

In 1993 Guinness spent USD 62 million for 51 percent of Desnoes & Geddes’ shares and in 1997 merged with UK-based Grand Metropolitan to become Diageo. In those days the Jamaican brewer owned considerably more assets.