Namibia Breweries Limited (NBL) says its planned acquisition by Heineken NV has potential to attract investment worth N$10 billion for the country.
Heineken announced last November its intention to buy South Africa’s Distell Group Holdings and NBL to form a southern Africa drinks group worth US$4.6 billion.
“The transaction creates an opportunity for Namibia to attract foreign direct investment to the amount of c. N$10 billion, which further highlights the attractiveness of Namibia as an investment destination,” NBL Managing Director Marco Wenk said during the brewers presentation at a stakeholder conference hosted by Namibia Competition Commission (NaCC) to scrutinize the multibillion-dollar transaction.
He said Namibia could also benefit from improved technology and a planned capital investment by Heineken.
“Heineken has an ambitious five-year capital investment programme planned for the new business in sub-Saharan Africa. As the world’s second largest brewer, Heineken will bring international standards, technology and innovation to Namibia, helping to upskill the local workforce,” the NBL MD said.
Patrick Smith, a Partner at RBB Economics in South Africa said the transaction will result in the local production of Distell products, which have a retail value of approximately N$1 billion, which are currently being imported into the country, ensuring NBL’s ability to sustainably use capacity in future.
“Heineken believes that Southern Africa continues to offer the opportunity to be a gateway for growth in Africa and in the future the African Continental Free Trade Area will accelerate these opportunities,” he said.
NBL said, based on its assessment, the business had reached its ceiling in the local beer market, thus is targeting to grow its brands beyond the local market.
“Critically, NBL had reached its epitome in the local beverages market, and despite all efforts to grow exports it was clear that this is not feasible without an established global partner, in line with global trends in the segment.NBL and its Namibian-produced iconic brands need to be grown and unleashed to realize their unlimited potential.NBL on its own does not possess the capability to ensure our core brands are able to play a bigger role beyond our borders,” said Vetumbuavi Mungunda Chairperson of NBL Independent Board Committee.
He said the brewer was also taking into consideration changes in consumer preferences, a position which can be catered for by Distell.
“A portfolio composed predominantly of beer would not be able to cater for fast-changing consumer preferences,” Mungunda said.
NBL is currently subject to an acquisition offer by Heineken NV, a position which requires approval from various stakeholders including the NaCC.
Under the terms of the deal, Heineken NV 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 Namibian Breweries Limited (NBL).
Heineken already owns a 49.99% interest in NBLIH and will become the majority shareholder of the brewer on completion of the transaction this year.
The NaCC stakeholder conference comes as NBL shareholders at the end of April approved its plans to acquire Distell Namibia for N$1.64 billion.
