HEINEKEN intends to acquire control of Distell and Namibia
Breweries to create a regional beverage champion for Southern
Africa
- HEINEKEN
intends to acquire control of
Distell and
NBL, which will be combined
with HEINEKEN
South
Africa into
a new HEINEKEN majority
owned business with a total valuation of approximately
€4 billion
- Distell
is Africa's leading producer and marketer
of ciders, flavoured alcoholic beverages, wines and
spirits, and
NBL is the beer market leader in
Namibia
-
Better able to
serve consumers and
customers with a
unique multi-category portfolio,
led by iconic brands Heineken®, Savanna,
Windhoek, 4th Street wine and
Amarula
- Combination will
have a significantly
strengthened and
complementary
route to market in South Africa
and Namibia with
further growth
opportunities
across Southern Africa
- EPS accretion
expected within one year and operating
profit margin accretion over the medium term on realisation of
significant synergies
Amsterdam, 15 November 2021 – HEINEKEN N.V. ('HEINEKEN')
(EURONEXT: HEIA; OTCQX: HEINY) today announced that it has entered
into an implementation agreement with Distell Group Holdings
Limited (‘Distell’), Namibia Breweries Limited (‘NBL’) and
Ohlthaver & List Group of Companies (‘O&L’) to integrate
their respective and relevant businesses in Southern Africa into
one enlarged company (“the Transaction”).
The Transaction will be implemented through a number of
simultaneous and inter-conditional steps, and will involve:
- A recommended offer by HEINEKEN for
Distell, which values the businesses1 to be acquired at
approximately €2.2 billion and is subject to, inter alia, Distell
shareholder approval;
- The proposed acquisition from NBL of
its 25% shareholding in HEINEKEN South Africa (‘HSA'), which values
the whole of HSA at approximately €1.5 billion, and is subject to,
inter alia, NBL shareholder approval; and
- The acquisition of O&L’s 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 €400 million.
At completion, HEINEKEN will contribute these acquired assets
plus its 75% directly owned shareholding in HSA and certain other
fully owned export operations in Africa, into an unlisted public
holding company (referred to as Newco). HEINEKEN will own a minimum
of 65% of Newco, with the remainder held by Distell shareholders
who elect to reinvest.
HEINEKEN’s CEO and Chairman of the
Executive Board Dolf van den Brink said:“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.
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 NBL, there are exciting
opportunities to expand premium beer and cider in Namibia and grow
the iconic Windhoek brand beyond its home market. 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.”
Distell CEO Richard Rushton
said:“Together, this partnership has the potential
to leverage the strength of HEINEKEN’s global footprint with our
leading brands to create a formidable, diverse beverage company for
Africa. I am excited for what lies ahead as we look to combine our
strong and popular brands and highly complementary geographical
footprints to create a world class African company in the alcohol
beverage sector. Our combined entity will grow our local expertise
and insights to better serve consumers across the region.”
NBL Chairman
Sven Thieme
said:“What we have achieved with NBL is truly
amazing, but the time has come to unleash its full potential, by
giving NBL access to the world. Having worked with HEINEKEN for
many years and knowing that they too are passionate about beer and
share similar family values and culture to that of O&L, we are
confident that HEINEKEN is best placed to do just that.”
Strategic rationaleHEINEKEN’s
global EverGreen strategy places consumers and customers at its
core whilst continually enhancing and expanding its portfolio and
footprint. The Transaction will create a Southern Africa champion
and an important gateway to Africa, the next frontier of growth,
and will:
- Strengthen its #2 position in
South Africa, the largest market in Africa, with a
unique multi-category portfolio
- Bring together the leading
portfolios in premium beer, cider, flavoured alcoholic beverages
(FABs), wine, and #2 in spirits, with iconic brands such as
Heineken®, Savanna, Hunters, 4th Street wine, and Amarula
- Beer to benefit from increased scale
and continued premiumisation
- Acquire the leading Cider & FAB
portfolio
- Wine and spirits offering
complementarity and optionality
- Combine two highly complementary
route-to-markets, reaching more consumers and customers, more
often.
- Acquire control of the beer market
leader in Namibia, providing premiumisation and
other growth opportunities whilst benefitting from cost
efficiencies when becoming part of the HEINEKEN group.
- Strengthen and optimise its
footprint across Southern Africa to accelerate
growth:
- Combine route-to-markets and
portfolios in export countries, to increase efficiency and capture
additional growth, especially in attractive markets like Kenya and
Tanzania;
- Explore wider opportunities to grow
the acquired cider and beer brands, such as Savanna and Windhoek,
outside their home markets.
HEINEKEN anticipates that the Transaction will generate
significant synergies, in line with comparable in-market
transactions.
Financial impact
for HEINEKEN
- HEINEKEN’s total investment in Newco
will be approximately €2.5 billion, in return for a 65%
shareholding. The total investment comprises:
- A cash pay-out of approximately €1.3
billion for the transactions involving Distell and NBL above;
and
- The contribution of its currently
owned assets, including 75% of HSA, 100% of its export businesses
in certain other African markets, and its minority interest in
NBL.
- On realisation of significant
revenue and cost synergies, the Transaction is expected to be
margin accretive over the medium term.
- The Transaction is expected to be
EPS (beia) accretive within the first year post completion.
- Upon completion HEINEKEN's pro-forma
net debt/EBITDA (beia) ratio is expected to increase marginally.
HEINEKEN remains committed to return to the long-term target of
below 2.5x.
Brew a Better WorldHEINEKEN is committed to be
a partner for growth in Southern Africa and aims to make a positive
impact on the environment, social sustainability, and responsible
consumption in the communities in which it operates. Headquartered
in South Africa, the new business is ambitious for growth and will
engage positively and proactively with stakeholders on measures
demonstrating its long-term commitment to the region. This will
include ongoing investment in the business, employment,
localisation and supplier development, talent development, and
contribution to the economic development of the region.
HEINEKEN is keenly aware of the importance of economic
transformation in South Africa through Broad-Based Black Economic
Empowerment (“B-BBEE”) and intends to enhance the enlarged
business’ empowerment ownership post completion of the
Transaction.
Newco will implement HEINEKEN’s Brew a Better World 2030
commitments, which include an ambitious agenda aligned to the UN
Sustainable Development Goals to achieve carbon neutrality, waste
reduction, water efficiency and address harmful use of alcohol.
This will include projects and partnerships with proven impact on
behavioural change and reducing alcohol related harm, alongside
investment in responsible consumption campaigns and ensuring that
consumers always have a choice through broadening the availability
of zero alcohol beverages.
Next
stepsCompletion of the
Transaction between HEINEKEN, Distell and NBL is subject to
customary and applicable (including regulatory and shareholder)
approvals. Expressions of support for the transaction have been
received from shareholders representing c.56% of the votes of
Distell and c.68% of the votes of minority shareholders of NBL. If
regulatory and shareholder approvals are successfully obtained, the
Transaction is expected to complete in the course of 2022. Further
announcements will be made as and when appropriate.
1 Representing the In-Scope Assets only as outlined in the
Distell Firm Intention Announcement
-ENDS-
Press
enquiries Sarah
Backhouse / Michael
Fuchs
E-mail:
pressoffice@heineken.com Tel:
+31-20-5239-355 Investor
and analyst enquiriesFederico Castillo Martinez / Robin
AchtenE-mail: investors@heineken.comTel: +31-20-5239-590
CONFERENCE CALL DETAILS HEINEKEN will host an
analyst and investor conference call in relation to its Southern
African Transaction today at 13:00 CET/ 12:00 GMT. The call will be
audio cast live via the company’s website:
www.theheinekencompany.com. An audio replay service will also be
made available after the conference call at the above web
address.
Analysts and investors can dial-in using the following telephone
numbers: United Kingdom: 0800 640 6441United Kingdom (Local): 020
3936 2999 Netherlands (Local): 085 888 7233 USA (Local): 1 646 664
1960 USA: 1 855 9796 654 All other locations: +44 203 936 2999
Participation password for all countries: 894933
About HEINEKENHEINEKEN is the world's most
international brewer. It is the leading developer and marketer of
premium beer and cider brands. Led by the Heineken® brand, the
Group has a portfolio of more than 300 international, regional,
local and specialty beers and ciders. We are committed to
innovation, long-term brand investment, disciplined sales execution
and focused cost management. Through "Brewing a Better World",
sustainability is embedded in the business. HEINEKEN has a
well-balanced geographic footprint with leadership positions in
both developed and developing markets. We employ over 80,000
employees and operate breweries, malteries, cider plants and other
production facilities in more than 70 countries. Heineken N.V. and
Heineken Holding N.V. shares trade on the euronext in Amsterdam.
Prices for the ordinary shares may be accessed on Bloomberg under
the symbols HEIA NA and HEIO NA and on Reuters under HEIN.AS and
HEIO.AS. HEINEKEN has two sponsored level 1 American Depositary
Receipt (ADR) programmes: Heineken N.V. (OTCQX: HEINY) and Heineken
Holding N.V. (OTCQX: HKHHY). Most recent information is available
on HEINEKEN's website: www.theHEINEKENcompany.com. Follow us on
LinkedIn, Twitter and Instagram.
About DistellDistell is
Africa’s leading producer of spirits, wines, ciders and
ready-to-drinks (RTDs) as well as the world's second-biggest
producer of ciders. Some of the company’s top brands include
Amarula, Hunter’s, Savanna, 4th Street, Klipdrift, Nederburg,
Richelieu, Viceroy, and J.C. Le Roux. Distell employs 4500 people
worldwide.
About Namibia Breweries
LimitedEstablished on 29 October 1920, NBL is one of the
leading beverage manufacturing companies in Namibia and indeed in
Southern Africa. Based in Windhoek, and employing more than 800
people, NBL leads the domestic beer market in Namibia and has
significant share of the premium beer category in Southern Africa.
Its portfolio includes a range of soft beverages, as well as low
and non-alcoholic products. NBL’s beer brands are brewed in strict
accordance with the Reinheitsgebot “Purity Law” - which only uses
three ingredients: malted barley, hops and water. It’s brands
Windhoek Lager, Tafel Lager, Windhoek Draught and Windhoek Light
have earned international recognition for quality and purity. NBL’s
products are exported to 17 countries outside of Namibia and South
Africa.
Market Abuse RegulationThis press release
contains price-sensitive information within the meaning of Article
7(1) of the EU Market Abuse Regulation.
- Click on PDF for full press release: HEINEKEN intends to
acquire control of Distell and Namibia Breweries (15_11_2021)
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