Does Heineken's $3.2 Billion Acquisition Make It a Good Investment?

Key Points

• The Dutch brewer already sits atop of one of largest collections of beer brands around the world.

• Beer is a business that tends to provide steady sales in both good and bad economic times.

• Heineken is setting its sights on developing countries, where beer sales are growing more rapidly.

• 10 stocks we like better than Heineken ›

Heineken (OTC: HEINY) is a quality beer, but -- over the past decade at least -- it's been a mediocre investment. The share price of the Dutch brewing giant, one of largest beer conglomerates on the planet, today sits right about where it was in June 2015.

Could that be about to change?

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A major acquisition

This week the company surprised the beer world with an announcement that it plans to bolster its presence in Latin America with a $3.2 billion acquisition of Costa Rica's Florida Ice and Farm Company, or FIFCO.

Back in 2002 Heineken bought a 25% stake in FIFCO, and this week's transaction will buy it the remaining 75% of the beverage distributor and its various assets. That will give the Dutch brewing giant full ownership of the iconic Imperial beer brand as well as a soft drink business and a PepsiCo bottling license, among other new assets.

In addition, the transaction will bring to Heineken these FIFCO assets:

• A 75% stake in Distribuidora La Florida, covering its beverages, food, and retail division, which includes more than 300 retail outlets in Costa Rica and overall operations in El Salvador, Guatemala, and Honduras
• A 75% stake in Nicaragua Brewing Holding, which holds a 49.85% indirect stake in Compañía Cervecera de Nicaragua, Nicaragua's leading beverage company
• A 25% minority interest in Heineken Panama
• A 100% stake in FIFCO's beyond beer business in Mexico

Latin America is a good region to sell beer in. The Latin American beer market is projected to grow from about $17.9 billion this year to $38.6 billion in 2031, a compound annual growth rate of 13.5%. Rising urbanization and incomes, deregulation, and global brand trends are driving beer consumption levels higher.

Image source: Getty Images.

A needed boost

And it's no secret that Heineken shares could use a shot in the arm.

The company's share price is down almost 11% over the past 52 weeks. That turned around in 2025 and the stock was climbing until late July when Heineken reported Q2 results and warned that second-half profits and volumes might be softer due to tariffs and other issues. That sent the stock plummeting 8% in a day.

But many analysts think that July sell-off was overdone. And now the shares are cheap, with the stock trading at just 13.7 times forward earnings. This makes the giant beverage company worth a second look. For comparison, beer conglomerate Anheuser-Busch InBev trades at about 14.2 times forward earnings.

300 global brands

Heineken owns some 300 global brands in 190 countries, with 85,000 employees. It's the biggest brewer in Europe and second-biggest in the world behind Anheuser-Busch. Heineken's brands include Heineken, Amstel, Dos Equis, Red Stripe, Kingfisher, Tecate, Bia Viet, Tiger, Desperados, Edelweiss, Sol, and Birra Moretti, among many others.

The company currently has a market cap of just over $43 billion. And the stock is up 8.3% year to date despite the drop after the Q2 results were announced.

The Wall Street consensus outlook is that revenue will fall this year by 18% due to softer sales, especially in North America, while earnings should rise by 12%. Beer remains a top choice for people selecting a beverage around the world, and sales tend to remain steady in times of both expanding and contracting economic activity.

That said, sales of beer are growing more slowly in advanced economies while they're accelerating in emerging market regions like Africa and Latin America due to rising incomes and population growth of legal-drinking-age consumers. If that trend persists, it will validate Heineken's recent strategy to increase its presence in Central America.

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Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.