Heineken may sell its Dutch soft drinks business

Is Heineken selling non-core businesses in a desperate attempt to lift this year’s earnings? According to rumour, Heineken will off-load its Finnish business in the coming months. And on 3 May 2013 international media reported that the brewer is also seeking a buyer for its Vrumona soft-drink business in the Netherlands.

Insiders say Vrumona could fetch at least EUR 500 million (USD 660 million). Add to that the EUR 590 million (USD 790 million) Heineken could reap from the sale of its Finnish subsidiary Hartwall and Heineken looks set to net about EUR 1.0 billion from this fire sale.

While market observers have speculated that the Hartwall family’s investment vehicle Hartwall Capital could be the most likely buyer for the Finnish business, thus returning it to the previous owners who sold it to brewer Scottish & Newcastle in 2002, no buyer has been mentioned yet for Vrumona.

Vrumona has been a fully consolidated unit of Heineken since 1968. It owns brands including Royal Club and Crystal Clear and produces drinks such as Pepsi and Gatorade under license.

Heineken is cutting costs across Europe to counter waning sales and profitability in the region. Without these disposals, Heineken’s profits this year might not be up much over 2012. Already on 24 April 2013 Heineken reined back annual growth expectations after beer volume plunged 8.8 percent in western Europe in the first quarter 2013.

Heineken declined to comment on a potential sale of Vrumona.