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The owners of Miller and Bavaria want to buy Heineken - but the Dutch are holding out

SABMiller is the second-largest brewing company in the world, Heineken is third.

HEINEKEN HAS REJECTED a bid by SABMiller to acquire the Dutch brewing giant, without revealing the offer price.

The majority shareholding Heineken family informed the British-based rival SABMiller “of its intention to preserve the heritage and identity of Heineken as an independent company”, the Dutch brewer said in a statement.

“The Heineken family and Heineken N.V.’s management are confident that the company will continue to deliver growth and shareholder value,” the statement added.

Therefore the SABMiller bid was “non-actionable”.

Heineken said it made the decision to announce the approach by SABMiller, and its rejection of the bid, due to rumours swirling around the markets.

SABMiller the second-biggest brewer in the world operating brands such as Miller, Bavaria, Personi and Fosters and is valued at about €70 billion.

Heineken is the third, thanks not only to its Heineken brand but also to sales of Amstel, Sol, Dos Equis and others. The company is valued at an estimated €35 billion.

Heineken’s shares were up by over 1.5% this morning following the takeover approach.

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Heineken is the third, valued at around 35 billion euros, thanks not only to its Heineken brand but also to sales of Amstel, Sol, Dos Equis and others.

A third beverage conglonorate Giant InBev however valued at around €140 billion.

“The big beer companies have made a lot of acquisitions over the last few years,” said Corne van Zeijl of Dutch asset management firm Actiam.

“The reason SABMiller wants to buy Heineken is probably because InBev wanted to acquire SABMiller,” he said.

InBev has spent around $100 billion acquiring brands including Corona and Budweiser over the last 10 years.

Heineken has meanwhile gained market share in some important markets, citing Brazil, Nigeria, Vietnam, France and the Netherlands.

If it acquired Heineken, SABMiller would up its turnover by around €20 billion and have a bigger profile in emerging markets in Africa and Asia.

“Even if it’s not to protect itself from InBev, such an offer makes market sense in order to lower costs and increase margins,” said Joost van Dijck, another analyst with Theodoor Gilissen.

Shares in SABMiller shot up 5.42% on the London Stock Exchange on Monday morning.

“SABMiller is top of the table off the back of bid speculation,” said Tony Cross, analyst with Trustnet.

“The company was reported as having failed to negotiate a merger with Heineken, so the concern now is that InBev could make a hostile bid.”

Last month Heineken said that beer drinking during the World Cup raised sales volumes in the first half of the year but net profits fell to €631 million from €639 million at the same time last year.

However, overall, it said that it expected consumption of its brands to slow down during the rest of the year owing to a cloudy outlook for the economy.

The Dutch group produces and sells more than 200 brands of beer and cider and employs nearly 70,000 people around the world.

© – AFP 2014 with reporting from Rónán Duffy

Read: Guinness is making two new beers – and here’s what they’ll look like >

Read: Carlsberg is the latest casualty of Eastern European turmoil >

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