Heineken to buy Mexico's FEMSA for $5.4 billion

Global brewery Heineken NV on Monday said it will buy the beer business of Mexico's FEMSA for €3.8 billion ($5.44 billion), giving the Dutch brewer a top position in the Mexican and Brazilian markets.

Heineken said the all-share transaction, which is expected to close in the second quarter, has an enterprise value of €5.3 billion ($7.6 billion) including pension obligations and net debt.

FEMSA will hold a 205 economic interest in the Heineken Group and will get the right to appoint two nonexecutive members to the supervisory board.

Heineken forecast annual cost synergies of €150 million by 2013. It expects the deal to add to earnings per share within two years.

Heineken will issue 86 million new shares to FEMSA on closing and has agreed to deliver 29 million existing Heineken shares to FEMSA over no more than five years.