Heineken NV is writing a hefty cheque - US$3.2 billion to be exact - for Florida Ice and Farm Company's (FIFCO) beverage empire across Central America.
The deal brings Costa Rica's century-old Imperial beer brand into Heineken's stable and ownership of fast-growing businesses in Panama and Nicaragua.
While an 11.6x EV/EBITDA multiple has some analysts raising eyebrows, the Dutch brewer is betting big on geographic diversification as European beer territories continue their sluggish performance.
As part of the deal, Heineken will secure >300 proximity retail outlets spanning Costa Rica, increasing its direct-to-consumer capabilities in the region.
“By integrating FIFCO’s iconic brands, deep market expertise, and exemplary sustainability credentials, we are accelerating our EverGreen strategy and entering new profit pools across Central America,” Heineken chair Dolf van den Brink said.
Premium purchase, volatile trends
The takeover sits above current industry benchmarks, and Heineken's own shares trade at a 9.1x EBITDA, meaning the company is paying a ~28% premium to its own valuation.
Recently, beverage companies have been trading at median EBITDA multiples - 9.6x in 2024 - down from 14.7x in 2023, reflecting a broader pattern of lower alcohol consumption.
That sentiment was inflamed once again with U.S. Surgeon General Dr. Vivek Murthy's January 2025 call for updated health warning labels linking alcohol consumption to cancer risk, further dampening sentiment across traditional brewing businesses.
Yet within that same period, rival beverage makers Carlsberg snapped up Britvic at a 14.8x EV/EBITDA back in January and Celsius paid US$1.8 billion for Alani Nutritionless at 13.8x back in April.
It's FIFCO's underlying performance, Heineken points to, that supports the premium pricing.
The target generated US$1.132 billion in revenue with a US$334 million EBITDA for a strong 29.5% margin last year.
Strategic rationale
Across Central America, FIFCO runs leading positions in beer (2 million hectolitres), beyond beer categories (0.5 million hectolitres), and soft drinks (2.5 million hectolitres), including PepsiCo bottling rights.
Non-alcoholic beer sales increased 25.1% year-over-year, and flavoured malt beverages were up 5.5% - categories where FIFCO maintains strong positions.
The Dutch brewer anticipates a run-rate cost savings of ~US$50 million, roughly 15% of FIFCO's current EBITDA.
If that pans out, its presence in Costa Rica will become one of Heineken's top five subsidiaries by operating profit.
Meanwhile, the Panama businesses have delivered a ~20% CAGR from 2019-2024 with consistent market share gains.
Full ownership of those enterprises eliminates non-controlling interest, while a 49.85% stake in Nicaragua's leading drinks company offers market exposure without full capital commitment.
Post-transaction, Heineken's net debt will increase by €3.2 billion, with the pro-forma Net Debt/EBITDA ratio increasing modestly.
The deal still requires FIFCO shareholder approval, pegged for October, as well as associated regulatory clearances, with completion expected in H1 2026.
Heineken shares have declined from 52-week highs of €82.78 to current levels of around €66.58, reflecting the broader beer industry pressures.
It's trying to nip that in the bud though and adapt. Earlier this month, the global drinks merchant announced the expansion of its popular Heineken 0.0% into 10,000 establishments Europe.
