Heineken buys up five Nigerian breweries

By Guy Montague-Jones

- Last updated on GMT

Heineken buys up five Nigerian breweries

Related tags Brewing Heineken

Heineken has acquired a controlling interest in five Nigerian breweries in a move that takes its share of the fast-growing market to over two-thirds.

The Dutch brewer made the acquisitions by buying two offshore companies from the Sona Group for an undisclosed sum. Company spokesperson John Clarke told BeverageDaily.com that the deal was the culmination of a year long competitive bidding process.

Additional capacity

Clarke said the important point about the acquisition is that it gives the global brewer 3.7 million hectolitres of extra capacity in Nigeria.

In a beer market that has grown at an annual growth rate of 9 per cent over the past 10 years, he said the additional capacity gives its companies, Nigerian Breweries and Consolidated Breweries, the room to grow further.

Heineken has already established a dominant position in the Nigerian beer market with an estimated share of 64 per cent. According to Heineken, the latest acquisition takes its market share up to around 68 per cent.

Before the acquisition, the Sona breweries already worked with Heineken providing contract brewing services.

Now that the transaction is completed this relationship will continue and Heineken will explore the possibility of bringing the newly acquiring breweries into its existing business structure in Nigeria during 2011.

Growth potential

Commenting on yesterday’s deal, Tom de Man, president of Africa & Middle East of Heineken, said: “Nigeria is one of the world’s most exciting beer markets and one of the most important countries for Heineken. This acquisition underlines our ongoing commitment to the country and will significantly strengthen our platform for future growth.”

The Nigerian beer market is the second largest in Africa but still has quite some growth potential ahead. Beer and non-alcoholic malt consumption was about 11 litres per person in 2009 compared to the global average of 27 litres.

Heineken is not the only international brewer to show an interest in Nigeria. SAB Miller acquired a majority stake in a local brewer there in 2009 and Diageo-owned Guinness is well established in the country. Carlsberg beer is also produced under licence in Nigeria.

Related topics Manufacturers Heineken

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