• Thursday, March 28, 2024
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Nigerian Breweries proposes acquisition of Distell Nigeria

Nigerian Breweries proposes acquisition of Distell Nigeria

Nigerian Breweries Plc, one of the biggest beer makers in the country, has proposed to acquire 80 percent of Distell Wines & Spirits Nigeria Limited.

Distell Nigeria’s operations are local production of still and sparkling wines, ciders, importation of wines, spirits and flavored alcoholic beverages from Distell Group in South Africa.

Nigerian Breweries disclosed on Nigerian Exchange Limited that the board was presented with an offer from Heineken Beverages Holdings Limited of South Africa, for Nigerian Breweries to acquire Heineken Beverages’ majority interests in Distell Wines & Spirits Nigeria Limited.

Distell Nigeria is a subsidiary of Distell International Limited, which is 100 percent owned by Heineken Beverages. Distell International Limited owns 80 percent shareholding in Distell Nigeria.

According to the statement issued by Nigerian Breweries on Wednesday, the board resolved to consider the offer in detail with support from external legal, financial advisers and thereafter make a decision thereon in the coming weeks.

“This acquisition will also allow Nigerian Breweries to provide offerings to a new and younger generation of the consumer market,” FBNQuest analysts said in a note. “Nigeria’s demographic profile suggests that a significant proportion of the population will become adults over the next decade.”

FBNQuest analysts expect the acquisition to be value accretive for Nigerian Breweries. “The deal offers new growth prospects for Nigerian Breweries, the company has struggled to deliver robust profits in recent quarters.

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“With younger alcohol drinkers more interested in spirits and wines, we believe the proposed transaction provides new growth drivers for Nigerian Breweries,” they said in a note.

Euromonitor, a market research firm, said wine consumption in Nigeria rose to 33.1 million in 2021 which is the highest level since 2015. Nigeria’s premium spirits market has grown from a low base, with increased interest among the younger population.

Nigerian Breweries has a broad portfolio that includes beers, stout and non-alcoholics. However, the company does not have any presence within the wines or spirits segments, hence this acquisition to expand its product offerings.