By Zuko Komisa
The Competition Commission has approved Heineken’s purchase of wine and cider company Distell Group as long as the merged entity invests more than 10 billion rands over five years in the country.
According to the Commission’s announcement on Friday, the investment will increase and sustain the total production capacity of its businesses and associated facilities in South Africa.
The Dutch brewer revealed its plans to acquire Distell and Namibia Breweries Ltd in November, creating a southern African beverage conglomerate with a value of over 79 billion rands.
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Breaking news: The Competition Commission has recommended the conditional approval of Heineken’s proposed takeover of Namibian Breweries and certain Distell operations. Read the statement here:👇🏽https://t.co/qLhmk1WXXD pic.twitter.com/V5JoS2FvUv
— CompComSA (@CompComSA) September 9, 2022
The Commission and the merging parties also agreed to put into effect an Employee Share Ownership Scheme that will provide employees of the merged entity’s South African operations stock worth more than 3 billion rand.
“To address the competition concerns arising from the transaction, Heineken has committed to divest its Strongbow business in South Africa and other SACU (Southern African Customs Union) countries,” the Commission said.
In accordance with the agreement, two distinct companies will be formed: one will consist of the cider, ready-to-drink beverages, spirits, and wine businesses; the other will include Distell’s remaining assets, including its Scotch whisky business, and will be housed in a Distell subsidiary called Capevin.
After the merger is completed, Heineken will own a minimum of 65% of the new company, although Distell owners will have the option to reinvest and retain up to 35% of the shares.
Distell’s shares, which had been trading marginally lower before the announcement, were up 1.15% to R175.50 in late-afternoon trade on Friday.
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