The Competition Tribunal has given the go-ahead for Heineken to buy a controlling stake in Distell and Namibia Breweries – subject to an extensive list of conditions.
The decision marks the end of a torturous process that kicked off in 2021, when the Dutch brewer announced its intention to purchase the South African wine and spirits producer, which traces its origins back to 1925, when it was set up as the Stellenbosch Farmers Winery Group.
The transaction is expected to be implemented in April 2023.
The acquisition paves the way for the establishment of a regional beverage champion, which puts it in competition with South African Breweries (SAB), a division of Anheuser-Busch InBev.
Heineken’s rival SAB had objected to the takeover of Distell, because it wanted Distell to sell both its cider brands Savanna and Hunters as part of the transaction. Instead, Heineken offered to offload Strongbow – an international brand launched in South Africa in 2016 – to address competition concerns.
Strongbow, first produced in the UK in the 1960s, is the world’s best-selling cider brand.
The decision marks the final regulatory approval, after garnering approvals from the Namibia Competition Commission, the Common Market of Eastern and Southern Africa, and all other relevant jurisdictions.
Regional African beverage giant plans
It also paves the way for the creation of a regional African beverage giant.
In November 2021, Heineken announced its intention to acquire control of Distell and Namibia Breweries, which were to be combined into a new Heineken majority-owned business (Newco).
A year later, on 13 September 2022, the Competition Commission recommended that the Tribunal approve Heineken’s purchase of the stake in Namibian Breweries and Distell Group’s flavoured alcoholic beverages (FABs), wine, and spirits operations through Newco.
The proposed transaction translates into an internal restructuring of Distell to create Newco and CapeVin.
The recommended deal means Distell’s FABs, and spirits and wine portfolio, including the popular Savanna and Hunter’s ranges of cider, would be incorporated under Newco, while Distell’s whisky and gin operations would fall under Capevin Holdings Proprietary Limited (CapeVin), a subsidiary of Distell held by current shareholders of Distell and Heineken.
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