Heineken has secured its dominant market position in Nigeria by increasing its ownership in Nigeria-based Champion Breweries. The company bought on Thursday through its wholly-owned subsidiary Raysun Nigeria Limited 1,903,609,538 stocks representing a share of 24.3% in the local brewer. This raised the ownership of Raysun to 84.7%.and will give it a leverage to launch a takeover bid.
The purchase price was reported at NGN 2.60 per share which translates into a total purchase price of NGN 4,949,384,799 (USD 13 million).
Champion Breweries, which is located in Uyo, Akwa Ibom State, produces Champion Lager and Champion Malta as well as a selection on non-alcoholic beverages which are mainly sold in the southern part of the country, excluding the southwest. The company also brews and packages products under contract to Nigerian Breweries Plc., a company that is beer market leader in Nigeria and controlled about 55% of the market in 2019. Last August, Heineken slightly stocked up its shareholdings in Nigerian Brewery to about 56%. (inside.beer, 15.8.2020)
Champion Breweries was established in 1974 as a publicly funded commercial enterprise under the name of South East Breweries Limited. Itbegan production in 1976. Later, the name was changed to Cross River Breweries Limited and thereafter to Champion Breweries. In 2011, Montgomery Ventures Inc (Panama) sold a 57% equity stake in Champion Breweries to Consolidated Breweries which in turn was bought in 2013 by Raysun Nigeria Limited, a wholly-owned subsidiary of Heineken. Since then Heineken holds indirectly a majority equity stake in Champion Breweries Plc.
Prior to last week’s share purchase Asset Management Nominee and Akwa were the other substantial shareholders in Champion Breweries with 12.3% and 10% holdings respectively in the company.