The South African Competition Tribunal has approved Heineken’s offer to acquire control of Distell Group Holdings Limited. The decision marks the final regulatory approval, following those received from the Namibia Competition Commission, the Common Market of Eastern & Southern Africa and all other relevant jurisdictions. It paves the way for the creation of a regional African beverage giant to compete on equal terms with South African Breweries, a wholly owned subsidiary of the world’s leading brewing group AB InBev .
In November 2021, Heineken announced its intention to acquire control of Distell and Namibia Breweries Limited (NBL), which were to be combined with Heineken South Africa (HSA) into a new Heineken majority-owned business (Newco). (inside.beer, 15.11.2011)
Heineken’s CEO and Chairman of the Executive Board Dolf van den Brink said: “We are delighted the Competition Tribunal has approved the deal. We are very excited to bring together three strong businesses to create a regional beverage champion, with a unique multi-category offer to better serve consumers, customers and create shared societal value across Southern Africa. We are committed to being a strong partner for growth and making a positive impact in the communities in which we operate, and the proactive and comprehensive public interest package we’ve put forward is testament to that.”
Today’s approval gives the green light to an ambitious package of public interest commitments, including ongoing business investment, broad-based black economic empowerment, job creation, localization and supplier development, talent development and contribution to the economic development of the region.
Earlier today, a Transaction Update Announcement (TUA) was published outlining the remaining scheme details and Distell shareholder election process, including the remaining salient dates and times relating to the Transaction. The Transaction is expected to be implemented from April. The TUA is available on the Heineken website (Distell deal).
Heineken’s total investment in Newco will be approximately EUR 2.4 billion, in return for a 65% shareholding. This comprises:
- A cash pay-out of approximately EUR 1.2 billion to be funded from bonds, existing cash resources and committed credit facilities; 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.
The Transaction is expected to be EPS (beia) accretive this year by a low-single-digit and, on realization of significant revenue and cost synergies, margin accretive over the medium term. Upon completion Heineken 's pro-forma net debt to EBITDA (beia) ratio is expected to increase marginally.