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Heineken Acquires Krusovice Brewery in Czech Republic

Source: Heineken NV

Amsterdam, 14 June 2007 - Heineken N.V. announced today the acquisition of Krušovice Brewery in the Czech Republic from Radeberger Gruppe KG. As a result of this transaction, the market share of Heineken in the Czech Republic will increase to 8%, with total volumes of over 1.6 million hectolitres, improving Heineken's position in the market to number three.

The transaction, which will be funded from existing cash resources, is expected to be earnings enhancing in 2008 and value enhancing in 2010. The proposed acquisition will be submitted to the relevant competition authorities and is expected to be completed by 1 September 2007. Under the terms of the transaction, the acquisition price is not disclosed.

The Royal Brewery of Krušovice was founded in 1517, is situated around 70 km west of Prague and employs 300 staff. The brewery has a portfolio in the premium segment of the market, with the main Krušovice brand, one of the oldest Czech beer brands, and five variants, Svetle, Musketyr, Imperial, Cerne and Jubilejní. The state of the art Krušovice Brewery is profitable.  In 2006, sales volumes were 700,000 hectolitres. Production capacity is 1 million hectoliters with the possibility to expand. The domestic market share is almost 3%.
Nico Nusmeier, Regional President Central and Eastern Europe of Heineken N.V., commented: “This acquisition strengthens our base and provides a strong opportunity to accelerate top-line growth in the Czech market. The Krušovice brand is very popular among local consumers and we are confident that with appropriate commercial investment, this brand has clear potential to grow. In addition, we plan to further extend the excellent export position of the Krušovice brand by leveraging the reputation of Czech beers, particularly in Central and Eastern Europe. The brewery’s proximity to the city of Prague represents potential to further grow the Heineken brand.”

Heineken currently owns Starobrno Brewery in the Czech Republic, with production facilities in Brno and Znojmo in the South Moravia region. The brewery brews Starobrno, Hostan and Zlaty Bazant brands and imports Heineken. The brewery has a domestic market share of more than 5%.

The Czech beer market, one of Europe’s reference beer markets and profitable, has been stable for years. Annual consumption is currently estimated at 16 million hectoliters. In 2006, Czech per capita consumption was 159 litres per year, the highest in the world.

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