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Heineken To Acquire Control of Distell and Namibia Breweries in $4.6 Billion Deal

The deal marks a push into wine and spirits for the world's second-largest beer maker.

Video source: YouTube, SABC News

Dutch beer giant Heineken NV (OTC: HEINY) has struck a deal to acquire Distell Group Holdings Ltd (OTC: DSTZF) and a controlling interest in Namibia Breweries to form a South African drinks group worth 4 billion euros ($4.6 billion). 

Under the terms of the agreement announced Monday, Heineken will acquire Distell in a deal that values the company at around 2.2 billion euros ($2.5 billion). 

Additionally, Heineken will acquire a controlling interest in Namibia Breweries from Ohlthaver & List Group of Companies.

After the deal’s expected close in 2022, Heineken will own a minimum of 65% of the combined entity, with the remainder held by Distell shareholders who choose to reinvest.

The move to acquire Distell, Africa’s leading producer of ciders, flavored alcoholic beverages, wines and spirits, will broaden Heineken’s existing South African portfolio beyond beer. 

Heineken’s chief executive officer Dolf van den Brink told Reuters that the move will improve logistics and increase points of sale, which are often shared for beer, wine and spirits in South Africa. It will also offer growth opportunities in other African markets, like Kenya and Tanzania. 

Bloomberg News noted that Heineken’s new regional group will enable it to better compete with larger rivals like Anheuser-Busch InBev and Diageo.

Distell first began talks with Heineken in May, Reuters reported, noting that the two companies have “gone head-to-head” in recent years to capture the cider market in South Africa.

This is the first major deal for Van den Brink, who took charge at Heineken last year and is focused on restoring the brewer’s profit margins.

In June, Heineken acquired 39.6 million additional shares of United Breweries Limited, making it the majority shareholder of India’s largest brewery. Reuters estimated the value of the additional shares to be $781.3 million.


Source: Equities News

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