Heineken acquires South African, Namibian brewers

Heineken has announced the completion of its acquisition of South Africa’s Distell Group Holdings Limited and Namibia Breweries Limited.

Both brewers have been combined with Heineken South Africa into a new Heineken majority-owned business to capture significant growth opportunities in Southern Africa, currently dominated by rival AB InBev.

The Dutch brewing giant announced its intention to acquire control of Distell and NBL in November 2021. Last month, the South African Competition Tribunal has cleared the acquisition of Distell, marking the final regulatory approval to the deal, following those received from the Namibia Competition Commission, the Common Market of Eastern & Southern Africa and all other relevant jurisdictions.

The combined businesses will be known as ‘Heineken Beverages’ – the rebranding reflects the new company’s multi-category portfolio and commitment to deliver high-quality beverages to consumers across the continent.

“We are delighted to welcome over 5,400 talented employees of Distell and Namibia Breweries into Heineken and look forward to adding more than €1 billion in net revenue and €150 million (£133m) operating profit to our African footprint,” Dolf van den Brink, Heineken’s chairman and chief executive, said.

“By combining the strengths of all three entities, we can leverage our expertise and resources to foster growth, create jobs, and contribute to the overall economic development of the region.”

Heineken’s total investment in the new business will be approximately €2.4 billion, in return for a 65 per cent shareholding. This comprises a cash pay-out of approximately €1.2 billion and the contribution of its currently owned assets, including 75 per cent of Heineken South Africa, 100 per cent of its export businesses in certain other African markets, and its minority interest in NBL.

Heineken Beverages said it will now move ahead with a significant public interest package which includes an ambitious investment plan of more than €500m over five years.

Other elements of the package include investing more than €250m towards the construction of a new brewery and maltery, establishing a €20m supplier development fund and contributing €10m towards a localisation and growth fund in South Africa over five years, creating an Innovation and Research & Development (R&D) hub for the region and implementing a ‘Tavern Transformation’ programme which will support around 1,000 tavern owners to become licensed, sustainable local enterprises over a five-year period.

Distell is Africa’s leading producer and marketer of ciders, flavoured alcoholic beverages (FABs), wines and spirits, and NBL is the beer market leader in Namibia. The deal would bring together the leading portfolios in premium beer, cider, FABs, wine, and in spirits, with iconic brands such as Heineken, Savanna, Hunters, 4th Street wine, and Amarula.

In 2016, AB InBev took over South African Breweries as part of a blockbuster SABMiller buyout, and enjoys an estimated 80 per cent of the beer market by volume in South Africa.