Heineken can buy Distell, if it invests R10 billion in South Africa

Heineken’s purchase of South Africa’s biggest wine exporter got the final regulatory approval it needed, setting up the Dutch brewer for expansion across the continent.

South Africa’s Competition Tribunal gave the deal with Distell Group Holdings Ltd. the go-ahead with conditions, Heineken and Distell said in statements on Thursday.

Shareholder elections are expected in two weeks and the transaction is expected to be implemented from April, Heineken said.

Heineken plans to create a new regional group to compete with larger rival Anheuser-Busch InBev SA and spirits producer Diageo. The deal also includes Heineken taking a majority stake in the owner of Namibia Breweries Ltd.

The new unit will produce Heineken’s signature lager and Namibia’s Windhoek beer, plus Distell staples such as Klipdrift brandy and Savanna cider and a number of wines for export and local consumption.

The deal, valued at 2.4 billion euros ($2.5 billion), will give Heineken a 65% shareholding in the new company. The initial offer was made in late 2021 and while the conditions attached to the approval have not yet been publicly released, they “align broadly with the conditions proposed by the Competition Commission,” Distell said.

These conditions included:

  • The parties agree to maintain employee headcount for five years.
  • More than R10 billion must be invested over five years to maintain and grow the capacity of operations and related facilities in South Africa.
  • An employee share-ownership program must be started and transfer more than R3 billion of equity to workers of the new entity’s South African operations.
  • A supplier development fund for small- and medium-sized enterprises of R400 million must be established.
  • A further R200 million must be spent to promote growth initiatives within South Africa.
  • To create safe, responsible, and sustainable businesses, R175 million must be invested in a tavern transformation program.
  • An innovation, research, and development hub, based in South Africa, must be set up for the Africa region within five years.


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