Heineken today announced that it has entered into an implementation agreement with Distell Group Holdings Limited, Namibia Breweries Limited (NBL) and Ohlthaver & List Group of Companies (O&L) to integrate their respective and relevant businesses in Southern Africa into one enlarged company.
As part of the agreement, the Dutch brewer agreed to buy South African wine and spirits maker Distell at a price that values the business at approximately EUR 2.2 billion (USD 2.44 bn). Two weeks ago, it was reported that the deal was delayed due to a significantly higher asking price of USD 2.93bn by The Public Investment Corporation (PIC), a public asset management firm wholly owned by the South African government that holds about 30% in the company. (inside.beer, 28.10.2021)
The second part of the deal consists of the acquisition of NBL’s 25% shareholding in Heineken South Africa (HSA), which values the whole of HSA at approximately EUR 1.5 billion (USD 1.7bn), and is subject to, inter alia, NBL shareholder approval; and
The last part consists in the acquisition of O&L’s 50.01% interest in NBL Investment Holdings (Proprietary) Limited (NBLIH), the controlling shareholder with a 59.4% shareholding in NBL. Heineken already owns a 49.99% interest in NBLIH. NBL’s current market valuation is approximately EUR 400 million (USD 451m).
At completion, Heineken plans to contribute these acquired assets plus its 75% directly owned shareholding in HSA and certain other fully owned export operations in Africa, into an unlisted public holding company. Heineken will own a minimum of 65% in this new company, with the remainder held by Distell shareholders who elect to reinvest.
Heineken’s total investment in the new company will be approximately EUR 2.5 billion (USD 2.8bn), in return for a 65% shareholding. The total investment comprises a cash pay-out of approximately EUR 1.3 billion (USD 1.5bn) for the transactions involving Distell and NBL above; and the contribution of its currently owned assets, including 75% of HSA, 100% of its export businesses in certain other African markets, and its minority interest in NBL.
After AB InBev bought SAB Miller in 2016 (inside.beer, 28.9.2016), Heineken’s new deal brings now a further consolidation of the beer and beverage market in Africa and especially South Africa. The purchase is expected to boost earnings in the first year after completion, Heineken said in a press statement.
“We are very excited to bring together three strong businesses to create a regional beverage champion, perfectly positioned to capture significant growth opportunities in Southern Africa,” comments Dolf van Brink, Chairman of the Executive Board and CEO of Heineken.
“Distell is a highly regarded, resilient business with leading brands, a talented workforce and a strong track record of innovation and growth in Africa. With NBL, there are exciting opportunities to expand premium beer and cider in Namibia and grow the iconic Windhoek brand beyond its home market. Together we will be able to better serve our consumers and customers through a unique combination of multi-category leading brands and a strengthened route-to-market. The businesses share common values derived from their family heritage, long-term perspectives, entrepreneurial spirit, and care for people and planet.
“We have successfully built our business in Africa over 100 years. Today’s announcement is a vote of confidence in the long-term prospects of South Africa and Namibia and we commit to being a strong partner for growth and to make a positive impact in the communities in which we operate,” van Brink concluded.
“Together, this partnership has the potential to leverage the strength of Heineken’s global footprint with our leading brands to create a formidable, diverse beverage company for Africa. I am excited for what lies ahead as we look to combine our strong and popular brands and highly complementary geographical footprints to create a world class African company in the alcohol beverage sector. Our combined entity will grow our local expertise and insights to better serve consumers across the region,” said Richard Rushton, CEO of Distell.
“What we have achieved with NBL is truly amazing, but the time has come to unleash its full potential, by giving NBL access to the world. Having worked with Heineken for many years and knowing that they too are passionate about beer and share similar family values and culture to that of O&L, we are confident that Heineken is best placed to do just that,” Sven Thieme CEO of NBL concluded.
