The combination will leave Heineken as ‘a regional beverage champion, perfectly positioned to capture significant growth opportunities in Southern Africa’.
Heineken is set to acquire Distell in a deal that values the company at around €2.2bn ($2.5bn). This will result in a broadened portfolio beyond beer, with Distell being Africa’s leading producer and marketer of ciders, flavored alcoholic beverages, wines, spirits and RTDs.
The combination will also strengthen Heineken’s #2 position in South Africa, the largest market in Africa, behind AB InBev’s South Africa Breweries. It will also boost exports to attractive African markets such as Kenya and Tanzania.
The new portfolio will be led by brands such as Heineken, Savanna, Windhoek, 4th Street wine and Amarula.
Significant growth opportunities
Heineken will combine Distell, Namibia Breweries and Heineken South Africa into an unlisted public holding company, where it will own a minimum of 65% of shares. The remainder will be held by Distell shareholders who elect to reinvest.
“We are very excited to bring together three strong businesses to create a regional beverage champion, perfectly positioned to capture significant growth opportunities in Southern Africa,” said Heineken CEO and chairman of the executive board, Dolf Van Den Brink.
“Distell is a highly regarded, resilient business with leading brands, a talented workforce and a strong track record of innovation and growth in Africa.
"With Namibia Breweries, there are exciting opportunities to expand premium beer and cider in Namibia and grow the iconic Windhoek brand beyond its home market.
The combination of the businesses will involve:
- A recommended offer by Heineken for Distell, which values the businesses to be acquired at approximately €2.2bn and is subject to, inter alia, Distell shareholder approval;
- The proposed acquisition from NBL of its 25% shareholding in Heineken South Africa, which values the whole of HSA at approximately €1.5bn, and is subject to, inter alia, NBL shareholder approval; and
- The acquisition of Ohlthaver & List Group of Companies’ 50.01% interest in NBL Investment Holdings (Proprietary) Limited (‘NBLIH’), the controlling shareholder with a 59.4% shareholding in NBL. Heineken already owns a 49.99% interest in NBLIH. NBL’s current market valuation is approximately €400m.
“Together we will be able to better serve our consumers and customers through a unique combination of multi-category leading brands and a strengthened route-to-market.
"The businesses share common values derived from their family heritage, long-term perspectives, entrepreneurial spirit, and care for people and planet.
“We have successfully built our business in Africa over 100 years. Today’s announcement is a vote of confidence in the long-term prospects of South Africa and Namibia and we commit to being a strong partner for growth and to make a positive impact in the communities in which we operate.”
Completion of the transactions is subject to customary and applicable (including regulatory and shareholder) approvals. The transaction is expected to complete in 2022.
- South Africa is the world’s 12th largest beer consumer, and the largest on the African continent.
- South African Breweries (purchased by AB InBev in 2016 via its acquisition of SABMiller) accounts for around 87% of the beer market by volume.
- Previously positioned in South African through its Brandhouse Joint Venture with Diageo, Heineken dissolved this JV in 2016: creating a standalone beer and cider business centered around its brewery in Sedibeng. It currently employs around 950 people with an external sales force of around 600. Heineken South Africa has a beer market share of around 12%.
- Distell’s portfolio covers wine, spirits, ciders and RTDs: with an annual turnover of R26.1bn.