Brau Union in negotiations over strategic partnership

Austrian group Brau Union, leader of the Romanian beer market, is negotiating a strategic partnership with one of the international groups SABMiller, Heineken and Scottish-Newcastle, according to sources close to the talks.
The partnership could entail a takeover of the main stake in Brau Union and will certainly make a significant impact upon the Romanian beer market, which is already characterised by fierce competition.
SABMiler (already operating in Romania), Heineken and Scottish-Newcastle are among the top five European beer companies and are interested in Brau Union because of its strong position in Central and Eastern Europe.
Brau Union is one of the main players in the area, due to the aggressive acquisition policy it has enforced over the past five years. The Austrian group embarked on a rapid expansion and has been searching for a strategic partner able to support the company’s growth since the beginning of this year.
Two months ago, the Austrians set up a dataroom in Frankfurt, in order to help them identify the best business partner, the quoted sources say.
Heineken, SABMiller and Scottish-Newcastle have voiced firm interest in teaming up with Brau Union, according to the same sources. The shortlist for negotiations includes these companies.
“We cannot comment on the identity of the companies, but we can confirm firm interest in our strategic partnership proposition. However, there is no shortlist of bidders – why should we exclude someone that can come up with new ideas later on? I believe the process could be completed by yearend,” Michael Dickstein, Brau Union communications and investors relations manager told Ziarul Financiar.
Irrespective of the company that will be chosen to become the partner or main shareholder of Brau Union, the Romanian market will surely feel the effects of this transaction. SABMiller already owns four beer plants in Romania and 15.1% market share. For Heineken, Romania is one of the few countries in the area which it has not reached yet, while Scottish-Newcastle has recently kicked off a strong expansion programme in the area.
“We cannot comment on information regarding our interest in a partnership with Brau Union. Most analysts think we are one of the main contenders, because we are not strong exactly in those countries where Brau Union is present. However, we feel that SABMiller and Heineken are the most driven, since they operate in the area and stand to gain from a partnership with Brau Union,” said Jeremy Blood, corporate affairs manager of Scottish-Newcastle.
Should ABMiller come to control Brau Union, it would get some 50% of the Romanian beer market. Interbrew would rank second with 12.5%, followed by Tuborg Romania (6.3%).
Heineken has repeatedly tried to buy plants in Romania in the past few years, to capitalise on the popularity of the company’s two brands – Heineken and Amstel.
SABMiller bought Bere Timisoreana in 2001, increasing its market share from 10% to 14% back then.