Will Heineken take over control of Distell?
Shareholders of Distell, the Stellenbosch liquour giant, were today advised that Heineken N.V. has approached it regarding the potential acquisition of the majority of Distell’s
business. This was reported on the offcial news service of the Johannesburg Stock Exchange (JSE) earlier today.
The parties have entered into discussions which, if successfully concluded, may have an effect on the price of the Company’s securities. Bearing in mind that there can be no certainty that an agreement will be reached, shareholders are advised to exercise caution when dealing in their Distell securities until a further announcement is made.
Moneyweb reported that Distell shares jumped as much as 10%, hitting an intraday record. They were up 5.6% at 9:25 a.m. Tuesday in Johannesburg, giving the company a market capitalisation of R33.6 billion ($2.4 billion).
Shares of Heineken advanced 0.9% in Amsterdam, valuing the brewer at 57 billion euros ($70 billion). Discussions are ongoing, though there’s no certainty they will lead to a transaction, Heineken said Tuesday.
Distell produces Klipdrift brandy, Nederburg wine, Amarula cream liqueur, Savanna cider and Bain’s Cape Mountain Whisky. Remgro Ltd., an investment vehicle of South African billionaire Johann Rupert, and Public Investment Corp., Africa’s biggest pension fund, each hold a little more than 30% of Distell, according to data compiled by Bloomberg.
According to the Moneyweb report an acquisition would be Heineken’s most significant transaction since 2018, when it formed a partnership with China Resources Beer Holdings Co., maker of the country’s best-selling beer. A purchase would add to $7.4 billion of deals announced in the global beverage industry this year, about 15% less than at this point in 2020, according to data compiled by Bloomberg.
Moneyweb balso reported that South Africa was one of Heineken’s best-performing markets, which is surprising given the country’s recurring ban on alcohol.
Any deal for Distell would see Heineken Chief Executive Officer Dolf van den Brink, who took charge last June, make progress expanding into categories that have historically been more profitable than brewing, including liquor. It will also accelerate the decades-long strategy of his predecessor Jean-Francois van Boxmeer. During his tenure, van Boxmeer sought to tap growth opportunities in Africa, investing hundreds of millions of euros in promising markets such as Cote d’Ivoire, Nigeria and South Africa.
