Heineken buys back €1bn in shares as FEMSA exit begins

Heineken has bought €1 billion worth of its shares from Mexican Coca-Cola bottler, Fomento Economico Mexicano SAB (FEMSA).

The purchase comes after FEMSA launched a €3.7 billion stock and equity-linked sale for part of its holdings in the Dutch beer group. 

Dolf van den Brink, CEO and chairman of Heineken’s executive board, said: “Our strong balance sheet allows us to take advantage of this opportunity. This does not change our capital allocation principles, which prioritise investment in the organic growth and expansion of our business.”

FEMSA’s decision to divest its stake in the brewer comes after the company carried out a strategic review of its business platform to shore up its share price. It determined a series of actions and divestitures to achieve strategic focus, including offloading its holding in Heineken.

José Antonio Fernández Carbajal, FEMSA’s executive chairman of the board, commented: “After thoroughly analysing our business platforms, including their strategic opportunities, long-range plans and the best strategy to continue to drive growth and allocate capital in the future, FEMSA’s board of directors has approved a series of decisive actions.”

The buyback is part of an accelerated bookbuild offering by FEMSA of €1.9 billion in shares in Heineken, priced at €91 per share, and €1.3 billion in shares in Heineken Holding, at €75 apiece. The Mexican bottler also placed a sale of exchangeable bonds for an amount of €500 million, exchangeable into Heineken Holding shares.

The bonds will have a maturity of three years and were priced at an annual coupon of 2.625% and a conversion premium of 27.5% with the initial exchange price set at €95.625.

FEMSA’s overall economic interest in the Heineken Group will decrease from 14.76% to 8.13%.