The cost of the transaction, which will be funded from existing credit facilities, has not been disclosed, said Heineken. The deal is expected to be earnings enhancing in 2009 and value enhancing in 2012.

The proposed acquisition will be submitted to the relevant competition authorities for approval and, subject to this, is expected to be completed by the second quarter of 2008.

According to the press release, the transaction will strengthen Heineken's number-three position in the market and gives the company a market share of 12% and a total domestic volume of more than 1.9 million hectoliters.

Drinks Union owns a total of four breweries, all located in North and East Bohemia. Two of the breweries are located in Usti nad Labem, one in Louny and one in Kutna Hora. The regional market positions are complementary to Heineken's existing positions in the Moravian and Prague regions. Drinks Union has a total production capacity of 0.9 million hectoliters and employs 523 staff. The brand portfolio consists of the national brand Zlatopramen and the regional Breznak, Louny and Dacicky brands. 2007 sales volumes totaled 900,000 hectoliters including export and the company currently has a domestic market share of 4%.

In the Czech Republic, one of Europe's reference beer markets, Heineken currently owns the Starobrno and Krusovice Breweries, with breweries in Brno, Znojmo (Moravia) and in Krusovice (Bohemia).

Heineken's existing brand portfolio includes Starobrno, Hostan, Zlaty Bazant, Krusovice and Heineken.

Heineken is among biggest beer producers in the world. In Russia it owns 10 breweries.

From the March 31, 2008, Prepared Foods e-Flash