Brewing and beverage company Distell has entered into an implementation agreement with beer brewer Heineken for Distell to be acquired for R40.1-billion.
However, as an initial step before the scheme is implemented, Distell will undergo restructuring into a two separate businesses.
One will be a cider, ready-to-drive beverage, spirits and wine business (the in-scope assets), while the other will comprise the remaining assets, including a Scotch whisky business (out-of-scope assets).
The in-scope assets will be held by Distell, with its broad-based black economic empowerment partner to hold 15% of the in-scope assets in South Africa.
The out-of-scope assets will be held by Capevin, a wholly-owned subsidiary of Distell.
Heineken is also acquiring Namibia Breweries, which, coupled with Distell, will be combined with Heineken South Africa to form a new company worth $4-billion.
Heineken will retain 65% ownership of the new company, for a $2.5-billion investment, with the balance to be held by Distell shareholders who elect to reinvest.
The combination will have a significantly strengthened and complementary route to market in South Africa and Namibia, with further growth opportunities across Southern Africa, while bringing together leading brands in beer, cider, wine, spirits and flavoured alcoholic beverages.
The new company will implement Heineken’s Brew a Better World 2030 commitment, which include goals around carbon neutrality, waste reduction and water efficiency. It also encompasses initiatives to address the harmful use of alcohol.
The deal has received favourable preliminary majority votes from Distell and Namibia, with regulatory and full shareholder approvals remaining outstanding.
Distell expects the transaction to close in 2022.