On Monday, Heineken announced plans to acquire South Africa’s Distell Group Holdings and Namibia Breweries Ltd in order to form a southern Africa drinks group worth 4 billion euros ($4.6 billion).
The purchase of Distell would mark the world’s second-largest brewer’s foray into wine and spirits, with liqueur brand Amarula and wines including well-known labels such as Nederburg.
The Dutch brewer will pay approximately 40.1 billion rand ($2.62 billion) for Distell, which stated that the deal valued its entire business at 180 rand per share, a 1.4 percent discount to the stock’s Friday close.
Heineken will also acquire control of regional partner Namibian Breweries Ltd (NBL), which is currently valued at around 400 million euros in the market.
Heineken will acquire Ohlthaver & List Group of Companies’ 50.01 percent stake in NBL Investment Holdings, which owns 59.4 percent of Namibia Breweries (NBL). Heineken still owns 49.99 percent of the holding vehicle.
The transaction also includes Heineken purchasing NBL’s 25% stake in Heineken South Africa, for a total value of 1.5 billion euros.
Distell’s talks with Heineken, the world’s second largest beer producer, were first reported in May.
Distell shares, which had surged at the time, were down 7.1 percent at 169.61 rand at 0830 GMT, while Heineken’s were up 1.0 percent at 98.20 euros.
Heineken and Distell, the world’s largest and second-largest cider makers, have been competing for the South African cider market since Heineken launched its Strongbow brand there in 2016.
The purchase would be Dolf van den Brink’s first as CEO of Heineken, who took over in June 2020 and has launched a plan to restore profit margins, including the elimination of 8,000 jobs.