Page last updated at 11:27 GMT, Monday, 11 January 2010

Heineken buys brewer of Sol and Dos Equis beer.

Heineken barrel and bottles

Heineken has announced that it is buying the beer-making operations of Mexico's Femsa.

Its all-share offer values the maker of Dos Equis and Sol beers at £3.4bn ($5.5bn), excluding debt.

Heineken said the takeover would consolidate its position as the world's second-largest brewer by sales.

It will also give it better access to what is one of the world's fastest-growing beer markets, and will help it to expand in the United States.

Under the terms of the deal, Femsa will end up with 12.5% stake in Heineken and 14.9% stake in its parent firm Heineken Holding.

This will make the Mexican company the second biggest shareholder in the brewer after the controlling Heineken family.

Second place

Heineken shares were up 7% at one point on news of the acquisition. It needs the approval of shareholders to close the deal which it says will save it $150m in costs a year.

Heineken's chief executive, Jean-Francois van Boxmeer said: "Through this deal we become a much stronger, more competitive player in Latin America, one of the world's most profitable and fastest growing beer markets."

The acquisition is Heineken's second major deal in the past two years. It bought a chunk of Scottish & Newcastle operations in 2008.

Heineken still trails Anheuser-Busch InBev, which is the world's largest brewer by sales.

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