Nigerian Breweries Plc has initiated a bid to acquire two Nigerian subsidiaries of Heineken, totaling approximately N7.01 billion. This move aims to consolidate and streamline the operations of Heineken and its subsidiaries in Nigeria.
The company which is owned majorly by Heineken B.V, is seeking to acquire 80 per cent shareholding in Distell Wines and Spirits Nigeria (DWSN) Limited and 100 per cent import business from Heineken Beverages (Holding) Limited.
Upon the completion of the transaction, DWSN is set to become a subsidiary of Nigerian Breweries. This strategic move will see an expansion of NB’s operations to encompass the importation, marketing, and distribution of wines, spirits, and cider products.
The board of directors of Nigerian Breweries stated that it would be recommending the proposed acquisitions to shareholders, after it reviews showed that the terms were fair, and the acquisitions were in the interest of the company.
As stated by the company, the intended acquisition is in line with its strategic goal to broaden its current product range, extending beyond beer to encompass wines, spirits, and flavored alcoholic beverages.
“It also provides the company with growth opportunities and long-term profitability,” NB stated.
Under the transactions, the acquisition of DWSN gives NB 80 per cent of the economic interest, voting and other rights in DWSN while the 100 per cent acquisition of the import business gives NB an exclusive right to import all Heineken Beverages’ wines, spirits and ciders brands from South Africa, as well as the licence to market and distribute the products in Nigeria, including the right to locally produce any of the imported brands.
Established in 2018, DWSN is involved in the local manufacturing, marketing, and sales of a range of wines and ready-to-drink (RTD) beverages. The prominent brands of DWSN are manufactured, marketed, and distributed in Nigeria under a license from Heineken Beverages.
Heineken Beverages’ import business in Nigeria comprises importation, marketing and distribution of an extensive range of wines, spirits and RTD beverages from South Africa through distributors appointed locally.
The board of NB stated that the acquisition would provide the company with access to a complimentary multi-category portfolio of fast-growing brands in the wines and spirits market segment and capture the significant growth opportunities in that market.
“It enhances Nigerian Breweries’ long-term profitability through the addition of new product categories such as wines, spirits and flavored beverages, which are projected to grow at a higher rate than the lager, malt and stout categories.
“Migrating part of the imported portfolio to local production on Nigerian Breweries’ platform presents an opportunity for expedited volume growth as well as growing the local production of wines and spirits,” the board stated.