Heineken has received final regulatory approval from the South African Competition Tribunal to acquire control over Distell Group Holdings Limited and Namibia Breweries, paving the way for the creation of a regional African beverage champion.
The decision follows approvals from the Namibia Competition Commission, the Common Market of Eastern & Southern Africa, and all other relevant jurisdictions.
As part of its approval condition, the Namibian competition watchdog demanded that Distell’s products consumed in Namibia be manufactured or at least be bottled locally, among a raft of conditions.
The NaCC has also ordered the disposal of Heineken’s Strongbow brand to remove an overlap in the flavoured alcoholic beverages (FAB) category in respect of Heineken and Distell that is expected post-merger.
Heineken’s CEO and Chairman of the Executive Board Dolf van den Brink expressed his excitement about the deal and the opportunities it creates: “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.”
Heineken’s total investment in the newly formed company, Newco, will be approximately N$47 billion (€2.4 billion) for a 65% shareholding. The investment will include a cash pay-out of approximately N$23.5 billion (€1.2 billion) funded from bonds, existing cash resources, and committed credit facilities, as well as the contribution of its currently owned assets, including 75% of Heineken South Africa (HSA), 100% of its export businesses in certain other African markets, and its minority interest in Namibia Breweries Limited.
Heineken NV, which already owns a 49.99% interest in Namibian Breweries Investment Holdings Limited (NBLIH), offered to buy Ohlthaver & List Group of Companies (O&L)’s 50.01% stake in the national brewer.
According to Namibia Breweries Limited (NBL), its planned acquisition by Heineken NV has the potential to attract investment worth N$10 billion for the country.
Heineken has a portfolio of more than 300 international, regional, local, and specialty beers and ciders, while Namibia Breweries Limited is one of the leading beverage manufacturing companies in Namibia, with a significant share of the premium beer category in Southern Africa and more than 800 employees. The acquisition of control over Distell Group Holdings Limited and Namibia Breweries is expected to enhance Heineken’s position as a regional leader in the beverage industry.
The acquisition will create opportunities for suppliers and retailers, and Heineken has committed to investing in local communities and supporting local suppliers. The creation of Newco will enable Heineken to expand its operations in Southern Africa and become a regional leader in the industry.
