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Simultaneously, Heineken has agreed with SBE (Southern Breweries Establishment, a joint venture of which CCU owns 50%), to acquire the controlling stake of 68.8 percent in the Croatian brewer Karlovacka Pivovara. The transaction is still subject to a number of conditions, including corporate and regulatory approvals. With a domestic market share of 19 percent and an annual beer volume of around 850,000 hectolitres, Karlovacka Pivovara is the number two brewer in Croatia, a market of 4.5 million people and 3.8 million hl of beer consumption in 2001. The brewery also exports to the region. Karlovacka Pivovara employs 670 people and is located in the city of Karlovacka near Zagreb, with Karlovacka as its main brand. CCU has three breweries and a total annual beer production of 3..

Further, Heineken will sell its 15 percent stake in Quilmes to the controlling shareholder BAC, whilst agreeing to settle all disputes and claims outstanding in the pending arbitration proceeding between Hein-eken and Quilmes.
This will lead to an extraordinary net profit of EUR 73 million for Heineken in 2003. The sale to BAC will be subject only to the closing of the transaction announced by Quilmes and AmBev in May 2002.
As part of this agreement Heineken will be able, at its option, to terminate the licensing agreement to produce the Hein-eken brand with Quilmes. Hein-eken intends to transfer this agreement to CCU as soon as practically possible. The deal will immediately contribute to the net profit of Heineken..

Initially, Germany’s Schörg-huber held indirectly a 50 percent stake in IRSA, while Quiñenco owned the other 50 percent of IRSA, which has a controlling stake of 62 percent in the leading Chilean brewer CCU.
It has to be remembered that Anheuser-Busch owns another 19.8 percent of CCU. Now, with the consent of Quiñenco, Heineken will buy the 50 percent stake in IRSA that is currently held by Schörghuber. Heineken and Quiñenco will thus become partners in the joint venture IRSA. As part of this transaction, Heineken intends to transfer the licensing agreements to produce the Heineken brand in Chile and Argentina to CCU as soon as practically possible..

In January Heineken announced that it would reinforce its South American Operations by acquiring Schörghuber’s 50 percent stake in IRSA, the company that controls the Chilean brewer Compañía de Cervecerías Unidas S.A. (CCU).
At the same time Heineken came to an agreement with the Argentinean brewer Quilmes that it would terminate the Heineken licensing agreement and that Heineken would sell its 15 percent stake in Quilmes. It was reported that the sale of the 15 percent stake in Quilmes would lead to an extraordinary net profit of EUR 73 million for Heineken in 2003.
Now that Heineken holds Schörghuber’s stake in IRSA, the Dutch brewer could also obtain the controlling stake in the Karlovacka brewery in Croatia from CCU..

The Brazilian authorities have finally given the green light to Canada’s brewer Molson and its takeover of the Kaiser beer company. Molson said in a statement that the competition authority considered "the transaction as beneficial to competition in the national beer market." The purchase of Kaiser for US$765 million made Molson the second-largest brewer in Brazil and the 13th in the world. In Canada, Molson produced 11.3 million hl beer in fiscal 2001. Irrespective of the bad news coming out of South America, central and south American beer sales will continue to rise in the medium term future, according to a new report by beverage industry analysts Canadean. The report claims that low per capita consumption levels provide scope for volume demand to rise by almost 20 percent by 2007..

Milton Hershey would have been outraged - or perhaps not. In any case, we shall never know if the inventor of the famous chocolate sweet, Hershey Kisses, would have condoned plans by the Hershey Trust - a charitable trust the childless Milton set up in 1905 to fund a boarding school for the poor – to sell the Trust’s controlling stake in Hershey Foods, America’s largest chocolate maker.
After months of reviewing several bids, the board members gave in to protests from employees and others and dropped their plan to sell their stock valued at USD12.5 billion. The Trust has almost 60 percent of its USD5.4 billion of assets tied up in Hershey Foods’ shares.
For once, morals have won over profit..

Pauline Kael, the most distinguished American film critic, lost her illusions about movies at the movies. Coors’ executives have never had any illusions about the film industry or they would have thought twice about signing a deal with Miramax Films, a division of Walt Disney Co.
Miramax, the maker of Oscar-winning arthouse films such as "The English Patient" and "Shakespeare in Love" and Coors Brewing Co. announced a three-year marketing alliance which makes Coors a promotional partner in Miramax films. For an undisclosed sum, Coors will be the official sponsor of Miramax film premieres in the US. The deal also allows Coors to place its products in at least five Miramax films a year while Coors’ competitors will be kept out..

At the end of September, Anheuser-Busch rolled out its new low-carbohydrate beer, Michelob ULTRA. The brewer claims that the new beer is low in carbohydrates. A 12-ounce bottle of ULTRA has 2.6 g of carbohydrates, compared with 6.6 g for Bud light. They contain the same amount of alcohol, though - 4.2 % ABV. The brand was test-marketed in Denver, Tucson, Chicago, Baltimore, Washington D.C. and Florida. Michelob ULTRA is the most recent addition to the Michelob family of beer which now consists of 10 brands. In 2000, Michelob Light was the 13th most popular beer brand in the US, Michelob ranked 19th. Unlike Budweiser and Bud Light, which are both premium brands, the Michelob brands are positioned in the super-premium segment.

Guinness Bass Import Company (GBIC), Diageo’s importing and marketing arm, will relinquish its 1998 US importation and distribution rights for Bass Ale. The rights will pass to Interbrew, Bass’ new parent, on 30 June 2003 for a sum of USD105 million. Under the 1998 agreement, GBIC had the right to sell and market the brand in the US until July 2016. In the US, Bass Ale is considered a super premium brand and during fiscal 2001, GBIC sold around 7.5 million cases (600,000 hl).

Heineken’s recent shopping spree bears certainly analogies to London busses: First there are none for hours and then 20 come along at once. So if this issue’s news section reads like Heineken’s shopping list - we are only fulfilling our duty as chroniclers.

At the beginning of July, SAB’s shareholders approved of the US$5.6 billion deal to buy Miller Brewing Company which was announced on 30 May 2002 ending months of rumour and speculation. The deal called for London-listed SAB to pay US$3.6 billion in shares to cigarette maker Philip Morris, the parent of Miller Brewing Co., and take on US$2 billion of debt. Philip Morris retains a 36 per cent interest in the brewer, which is called SABMiller Plc. In a regulatory filing, Philip Morris, the world’s No. 1 tobacco company, said it would be entitled to a break-up fee of US$160 million if SAB did not obtain shareholder approval for the deal by 8 July 2002, or if the transaction were not completed by 31 July 2003.