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Heineken Raises Savings Target from S&N Assets

Source: Reuters
22/08/2008

Amsterdam, Aug 22) - Heineken NV on Friday raised by 30 percent expected savings from its joint takeover of brewer Scottish & Newcastle (S&N) but expressed doubt whether the deal would benefit earnings per share by 2009.

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Heineken, which took over S&N with Danish brewer Carlsberg earlier this year, said it now forecast cost synergies of 145 million pounds as opposed to an earlier figure of 120 million over the next four years.

The S&N operations it gained which are based in Britain, Ireland, Portugal, Belgium and the United States, would add value by 2012 although due to declining consumer confidence it was unclear if they would benefit earnings per share by 2009, the Dutch firm said.

The credit crisis, waning consumer confidence, and smoking bans have all taken their toll on beer sales in western Europe and the United States -- key markets for Heineken.

Heineken said in July it would restate accounts for its S&N assets, although analysts played down the news, saying they did not expect any major impact on the company's overall results.

Shares in Heineken closed at 31.4 euros on Thursday and have fallen by almost 30 percent since the start of the year after investors criticised the 7.8 billion pound joint takeover for increasing Heineken's exposure to slower-growing markets of western Europe.



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