South Africa: Heineken offers to buy out Namibian Breweries

On Wednesday, Heineken approached  Namibian Breweries (NBL) to buy NBL’s 25% stake in its joint-venture Heineken South Africa at an undisclosed amount, NBL reported today. This would help NBL to get rid of its loss-making investment which attributed to losses of NAD 339 million (USD 22.8m) in the last 5 years. However during the same period NBL earned royalties on its brands in South Africa of NAD 450 million (USD 30.2m) which made the whole business in South Africa profitable.

In August 2019, before the COVID 19 pandemic started, Heineken South Africa announced to invest  ZAR 952 million (USD 66.51 million) in its plant to enlarge it from 5.3 million hectoliters to 7.5 million hectoliters by 2020. (,2.8.2019)

Beginning in 2020, however, the whole alcohol industry was hardly hit by severe restrictions and several alcohol bans imposed by the government to mitigate the effects of the COVID-19 pandemic. The fourth and last alcohol ban was imposed at the end of June (, 28.6.2021) and lifted 4 weeks later. Still, other restrictions prevailed. On 12 September, South Africa’s President Cyril Ramaphosa further eased restrictions and permitted alcohol sales for on-site consumption seven days a week up to 22h00, and the sale of alcohol from retail outlets for off-site consumption from Monday to Friday between 10h00 and 18h00.

In this respect, Heineken has chosen the right time to approach NBL since Heineken South Africa’s business especially in the last two years was highly unprofitable which might also be expressed in a depressed valuation.

NBL which is majority owned by the Ohlthaver & List Group, the largest private Namibian company, has appointed former Standard Bank chief executive officer Vetumbiavi Mungunda and financial planner Afra Schimming-Chase to a standing committee to evaluate the offer and advise shareholders.

Next to talks with NBL, Heineken is still involved in talks to buy a majority stake in Distell Group Holdings, Africa’s leading producer and marketer of spirits, wines, ciders and ready-to-drinks. In May, Heineken informed “that it is currently engaged with Distell regarding a potential transaction.” (, 18.5.2021)

Last week, Distell announced that “satisfactory progress” had been made regarding a bid by Heineken to acquire full control of the group. “The parties are committed to finalising these outstanding issues in the shortest possible time frame and Distell will inform shareholders immediately upon their finalisation,” Distell said.

In August 2021, Jordi Borrut took over the role as Managing Director at Heineken South Africa from Gerrit van Loo, who has taken early retirement from the beermaker, almost three years after his appointment. Van Loo worked for Heineken for more than 33 years and has held several positions during that time, including managing director for Heineken in Ethiopia and Ireland, as well as regional export director.

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