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The proposed acquisition is subject to approval by competition authorities. The company expects to complete the deal in the second quarter of 2008.

The cost of the transaction, which will be funded from existing credit facilities, hasn't been disclosed. Heineken expects Drinks Union to enhance earnings in 2009 as well as bring value increases by 2012.

Central and Eastern Europe of Heineken N.V Regional President Nico Nusmeier said: "With this transaction we have significantly extended our reach and consolidated our position in a profitable beer market. Our geographic presence, coupled with our strong, balanced portfolio of regional and national brands, will allow us to extract greater value from the considerable growth opportunities in the Czech market."

Drinks Union market share

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 company has a total production capacity of 0.9 million hectolitres and employs 523 staff.

Regional market positions are complementary to Heineken's existing positions in the Moravian and Prague regions.The brand portfolio consists of the national brand Zlatopramen and the regional Breznak, Louny and Dacicky brands. In 2007 sales volumes totaled 900,000 hectolitres 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.