Heineken NV’s main Nigerian brewer said it won regulatory approval to combine with Consolidated Breweries plc, the Dutch company’s smaller unit in the country, to pool resources in Africa’s biggest economy.
Nigerian Breweries plc (NB), the West African nation’s largest brewer, received approval from the Securities and Exchange Commission to merge with Consolidated, the Lagos-based company said in a statement Monday on the Nigerian Stock Exchange newswire. The companies will now approach the Federal High Court to allow them to convene general meetings to obtain shareholder approval.
Heineken announced in May its intention to combine its two Nigerian units to make them more efficient as the brewer looks to tap booming economic growth in emerging markets. The Dutch company already controls Nigerian, the brewer of Star lager, and Consolidated, the number three beer producer in the country and maker of brands such as Turbo King.
Heineken competes with Diageo plc and SABMiller plc in Nigeria, Africa’s most populous nation of about 170 million that has been wracked by an Islamist militant insurgency that mainly operates in the Muslim north. Guinness Nigeria Plc, the local maker of Guinness stout for Diageo, reported a full-year decline in sales and profit last month as drinkers switch to less expensive brands. It’s now selling cheaper Dubic lager in the country.
Nigerian Breweries’s revenue rose 5.8 percent to N141.5 billion ($864m) in the six months through June compared with a year earlier. The shares have risen 6.6 percent this year, outperforming the 3.1 percent decline of the Nigerian Stock Exchange All-Share Index. (NGSEINDX)
Pretax profit declined 59 percent last year at Consolidated Breweries, which cited increased competition and delays in bottle deliveries due to sabotage of the gas pipeline serving producers, the company said in its annual report. Sales climbed 1.2 percent to 33.9 billion naira.
Nigerian Breweries was incorporated in 1946, producing its first bottle of Star in 1949. The company has eight breweries and two malting plants. Consolidated Breweries has been majority owned by Amsterdam-based Heineken since 2005.
