Heineken to buy South Africa’s Distell and Namibian Breweries

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Bottles of Heineken beer. FILE REUTERS/

Dutch brewer Heineken said on Monday it planned to take control of South Africa’s Distell Group Holdings and Namibia Breweries Ltd to form a southern Africa drinks group worth 4 billion euros (4.6 billion U.S. dollars).

The takeover of Distell would mark a push into wine and spirits for the world’s second-largest beer maker, with liqueur brand Amarula and wine labels Nederburg and Two Oceans. Heineken will sell Distell’s British-based Scotch whiskies.

Heineken Chief Executive Dolf van den Brink said the deal would improve logistics and increase points of sale, often shared for beer, wine and spirits in South Africa, and would do the same in Namibia. It also offered growth in other African markets, such as Kenya and Tanzania, he said.

“It should be seen that we now start to buy spirits and wine companies all over the world,” Van den Brink told Reuters.

Heineken will pay 1.3 billion euros in cash and add its existing South African business, to secure at least 65 percent of the new business, the remainder largely held by Distell shareholders who decide to reinvest.

The deal will value Distell at about 40.1 billion rand (2.6 billion U.S dollars) or 180 rand per share, Distell said, a discount of 1.4 percent to the stock’s Friday close.

Heineken and Distell, the world’s largest and second-largest cider makers respectively, have gone head-to-head for the cider market in South Africa since Heineken launched its Strongbow brand there in 2016.

Heineken will take control of regional partner Namibian Breweries Ltd (NBL), with a current market valuation of about 400 million euros.

Heineken will buy the 50.01 percent interest of Ohlthaver & List Group of Companies in NBL Investment Holdings, which holds 59.4 percent of Namibia Breweries (NBL). Heineken holds the remaining 49.99 percent of the holding vehicle.

The transaction also entails Heineken’s purchase of NBL’s 25 percent shareholding in Heineken South Africa.

Van den Brink said the brewer expected cost synergies in production, logistics and procurement, but no job losses in the near term, along with “significant” revenue synergies.

The overall transaction is expected to increase margins over the medium term and boost earnings per share within the first year after completion.

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