Heineken’s proposed £1.7bn takeover of South Africa-based Distell means that the brewery will now have a share in Deanston – the largest distillery owned by Distell Group, which also owns Bunnahabhain Distillery on the Isle of Islay and Tobermory distillery on the Isle of Mull.
The takeover of Distell would mark a push into wine and spirits for the world’s second-largest beer maker, which also owns Birra Moretti, Amstel, and Tiger beer. It also plans to take control of Namibia Breweries Ltd and both deals would create a group worth 4 billion euros allowing it to compete more effectively with rivals such as AB InBev and Diageo overseas.
It is understood two new companies will be created Newco and Capevin. The former will combine Distell’s spirits, wine, cider and ready-to-drink portfolio with Heineken’s Southern Africa and export markets business, including Namibia Breweries. The latter will include the company’s remaining assets, including its Scotch whisky business, consisting of the Bunnahabhain, Deanston and Tobermory brands.
As part of the agreement, Heineken will own a minimum 65% stake in Newco, while Distell’s largest shareholder Remgro will retain control of Capevin.
Heineken Chief Executive Dolf van den Brink said the deal would improve logistics and increase points of sale, often shared for beer, wine and spirits in South Africa, and would do the same in Namibia. “It should be seen that we now start to buy spirits and wine companies all over the world,” Van den Brink told Reuters.
Richard Rushton, Distell CEO, commented, “Together, this partnership has the potential to leverage the strength of Heineken’s global footprint with our leading brands to create a formidable, diverse beverage company for Africa. I am excited for what lies ahead as we look to combine our strong and popular brands and highly complementary geographical footprints to create a world-class African company in the alcohol beverage sector. Our combined entity will grow our local expertise and insights to better serve consumers across the region.
The acquisition still requires shareholder approval.