Davis Polk is advising Heineken N.V. in connection with its non-binding agreements with China Resources Enterprise (“CRE”) and China Resources Beer (Holdings) Co. Ltd. (“CR Beer”) to create a long-term strategic partnership in Mainland China, Hong Kong and Macau. As part of this strategic partnership, Heineken will become CRE’s 40% partner in holding company CRH (Beer) Limited (“CBL”), which controls CR Beer, a market leader in the world’s largest beer market, China.

Under the strategic partnership, Heineken would invest HK$24.3 billion in CBL for its 40% stake. CRE would acquire a 0.9% shareholding in Heineken for €464 million. Heineken would also contribute its operating entities in China to CR Beer for total consideration of HK$2.4 billion. Combined, these transactions would result in a net investment of €1.948 billion (at current exchange rates) by Heineken.

In addition, Heineken would license the Heineken™ brand in China to CR Beer on a long-term basis. It is intended that Heineken will be CR Beer’s exclusive partner for international premium lager beers in China.

Heineken N.V. is one of the world’s largest brewing companies, with over 165 breweries in 70 countries worldwide. The Heineken Group has a portfolio of more than 300 international, regional, local and specialty beers and ciders.

CRE is one of China’s largest comprehensive consumer goods and retail services companies, and the indirect parent of CR Beer. CR Beer is listed on the Hong Kong Stock Exchange, and is the parent company of China Resources Snow Breweries Limited, the largest beer manufacturer, seller and distributor in China. The flagship brand“雪花 Snow” is the largest beer brand by volume worldwide.

The Davis Polk corporate team includes partners Miranda So and Paul Chow and counsel Brian J. Snyder and Stephenie Fung. Partner Pritesh P. Shah and associate Samantha Lefland are providing intellectual property and technology advice. Partner Howard Shelanski and counsel Nicholas Spearing are providing regulatory advice. Members of the Davis Polk team are based in Hong Kong, New York and Washington DC offices.

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