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Heineken gets final approval for Distell deal
The South Africa Competition Tribunal has given the green light for Heineken’s €2.4 billion (US$2.56bn) takeover of Distell.
In November 2021, Dutch brewing giant Heineken agreed to buy a 65% stake in South African spirits firm Distell, excluding the Scotch whisky business.
South Africa’s Competition Tribunal has approved Heineken’s offer, marking the final regulatory approval it needed.
As part of the deal, Heineken agreed to purchase Distell’s flavoured alcohol beverages (FABs), and wine and spirits operations, except for certain spirits brands, as well as Namibian Breweries.
Following the merger, a new company based in South Africa will be created, called Newco.
Newco will combine Distell’s portfolio of spirits, wine, cider and ready-to-drink beverages with Heineken’s Southern Africa and export markets business, which includes Namibia Breweries.
Distell’s spirits portfolio includes Amarula liqueur, South African whisky brands Bains and Three Ships, Cruz vodka and Klipdrift brandy.
The rest of Distell’s assets would become part of Capevin, a new company that will include the Scotch whisky business, consisting of the Bunnahabhain, Deanston and Tobermory brands.
Certain conditions
South Africa’s Competition Commission recommended that the Competition Tribunal approve the merger, subject to conditions, in September 2022.
Among the conditions were the requirement that Heineken sells its Strongbow cider business in South Africa and establish an employee share ownership scheme.
Furthermore, it must establish a R400m rand (US$23.4m) supplier development fund and donate R200m (US$11.7m) to promote local initiatives in the country.
Other conditions include investing R175m (US$10.2m) in a tavern transformation programme, and the creation of a South Africa-based innovation, research and development hub within five years.
The deal is expected to be completed in April 2023.
‘Regional beverage champion’
Heineken said the transaction would enable it to create a ‘regional beverage champion for Southern Africa’.
Heineken’s CEO and chairman of the executive board, Dolf van den Brink, said: “We are delighted the Competition Tribunal has approved the deal.
“We are very excited to bring together three strong businesses to create a regional beverage champion, with a unique multi-category offer to better serve consumers, customers and create shared societal value across Southern Africa.
“We are committed to being a strong partner for growth and making a positive impact in the communities in which we operate, and the proactive and comprehensive public interest package we’ve put forward is testament to that.”