DealBook: Heineken to Sell Packaging 0perations in Mexico to Crown Holdings

LONDON — The Dutch brewer Heineken said on Monday that it had agreed to sell its Mexican packaging operations to Crown Holdings Inc. in a deal that values the business at about $1.23 billion.

Selling Empaque is part of Heineken's continuing efforts to focus its resources primarily on the brewing and marketing of its beer brands and will provide it with further financial flexibility, the company said. Its beer brands include Heineken, Amstel, Dos Equis and Sol.

Empaque, which is based in Monterrey, Mexico, produces metal beverage cans, glass bottles and other components used in beverage packaging. The company employs about 1,500 people at a variety of manufacturing facilities in Mexico.

The deal is expected to boost the operations of Crown Holdings globally and in North America. The company said it expected to become the second-largest beverage can producer in North America and to account for 20 percent of all beverage cans globally, supplying more than 62 billion cans a year.

The deal will also allow Crown Holdings to expand its presence in the growing Mexican market, John W. Conway, the Crown Holdings chairman and chief executive, said in a statement.

Empaque is expected to remain a key supplier to Cuauhtémoc Moctezuma, Heineken's Mexican subsidiary, following the transaction, Heineken said.

Heineken, based in Amsterdam, is expected to recognize a gain of 300 million euros, or about $393.9 million, following the sale.

"We are confident that Empaque will flourish under its new ownership and we look forward to our ongoing partnership," Jean-François van Boxmeer, the chairman and chief executive of Heineken, said in a statement.

The transaction is subject to regulatory approval.

Heineken, one of the world's largest brewers, acquired Empaque in 2010 as part of its acquisition of the beer operations of Fomento Económico Mexicano, S.A.B. de C.V. in an all share-transaction that valued Femsa's brewing and packaging businesses at about $7.6 billion.

This year, Empaque is expected to post sales of about $700 million and earnings before income tax depreciation and amortization of about $150 million, according to Crown Holdings.

Crown, formerly known as Crown Cork & Seal, is one of the world's largest packaging companies. The company, based in Philadelphia, employs more than 21,300 people in 40 countries worldwide and posted sales of $8.7 billion in 2013.

Shares of Heineken rose slightly to €58.12 in morning trading in Amsterdam on Monday, while shares of Crown Holdings closed up less than one percent at $48.27 in trading in New York on Friday.

Markets in the United States are closed on Monday for the Labor Day holiday.

Heineken was advised by the investment bank Moelis & Company and the law firm Gibson, Dunn & Crutcher, while Crown Holdings was advised by Citigroup.

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