Namibia Breweries Limited (NBL) is set to acquire Distell Namibia for N$1.64 billion after its shareholders approved the deal on Thursday.
The 95.25% approval by NBL eligible shareholders that voted comes after the listed brewer had established an independent committee of the Board for purposes of considering the Distell Namibia Acquisition and other related matters, including evaluating the terms and conditions of the Distell Namibia Acquisition and advising Shareholders, comprised of Ombu Capital founder, Vetumbuavi Mungunda and Afra Schimming-Chase.
The meeting also saw 95.23% of shareholders eligible to vote at the AGM, also grant authority to the company’s directors to seal the deal.
NBL is expected to fund the purchase consideration through financing facilities to be arranged.
The operations of Distell Namibia consist of the sales, marketing and distribution, a strong portfolio brands, primarily wines, flavoured alcoholic beverages and spirits categories.
Key brands in the portfolio include Tassenberg, 4th Street, Castello, Savanna, Hunters and Richelieu, which are currently manufactured by Distell and imported from South Africa.
Distell Namibia owns and operates four distribution depots across Namibia (Windhoek, Oshakati, Walvis Bay and Keetmanshoop).
The planned acquisition of Distell Namibia comes as NBL itself is subject to an acquisition by Heineken NV, which has offered to buy Ohlthaver & List Group of Companies (O&L)’s 50.01% stake in NBL Investment Holdings (Proprietary) Limited (NBLIH), the controlling shareholder with a 59.4% shareholding in brewing company.
Heineken already owns a 49.99% interest in NBLIH and will become the majority shareholder of the brewer on completion of the transaction in 2022.
Analyst views
Simonis Storm
We think the ever-increasing likelihood of all the restructuring / acquisitions will start to cement the special dividend possibility within investor minds. The N$26.35 special dividend – i.e., sale of NBL’s 25% stake in Heineken SA, contingent on a myriad of conditions (including the Distell acquisition), currently constitutes 60.6% of the share price. We previously highlighted that whilst the deal progress, NBL remain precluded from declaring an ordinary dividend, likely to detract from the allure, albeit marginally, fortunately management confirmed finalization latest 1Q23. The balance sheet restructuring uncertainty (e.g., onboarding of debt = ↑ gearing = ↑ risk) is of greater concern to us – awaiting clarity.
