Heineken considers takeover of brewer Distell

Heineken NV, the world’s second- largest brewer, is in talks about a takeover of South African wine and spirits maker Distell Group Holdings Ltd. Heineken approached Distell about a possible acquisition of most of its business, the South African company said Tuesday, confirming an earlier Bloomberg News report. Distell is considering its options, spokesman Frank Ford said by phone.

Distell shares jumped as much as 10percent hitting an intraday record. They were up 5.6percent at 9: 25 a. m. Tuesday in Johannesburg, giving the company a market capitalisation of R33.6 billion ($ 2.4 billion). Shares of Heineken advanced 0.9percent in Amsterdam, valuing the brewer at 57 billion euros ($ 70 billion). Discussions are ongoing, though there’s no certainty they will lead to a transaction, Heineken said Tuesday. Distell produces Klipdrift brandy, Nederburg wine, Amarula cream liqueur, Savanna cider and Bain’s Cape Mountain Whisky. Remgro Ltd., an investment vehicle of South African billionaire Johann Rupert, and Public Investment Corp., Africa’s biggest pension fund, each hold a little more than 30percent of Distell, according to data compiled by Bloomberg. The PIC increased its stake in 2017 after a shakeup of the drinks maker’s ownership structure, paying R170 a share. An acquisition would be Heineken’s most significant transaction since 2018, when it formed a partnership with China Resources Beer Holdings Co., maker of the country’s best- selling beer. A purchase would add to $ 7.4 billion of deals announced in the global beverage industry this year, about 15percent less than at this point in 2020, according to data compiled by Bloomberg. The brewer surprised analysts in April with stable first- quarter sales as emerging markets made up for declines in Europe. South Africa was one of Heineken’s best- performing markets, which is surprising given the country’s recurring ban on alcohol. Any deal for Distell would see Heineken Chief Executive Officer Dolf van den Brink, who took charge last June, make progress expanding into categories that have historically been more profitable than brewing, including liquor. It will also accelerate the decades- long strategy of his predecessor Jean- Francois van Boxmeer. During his tenure, van Boxmeer sought to tap growth opportunities in Africa, investing hundreds of millions of euros in promising markets such as Cote d’Ivoire, Nigeria and South Africa.