RMBadvisesDistellonlandmarkthree-waycross-borderdeal

 

Client challenge

Multinational brewing and beverage company, Distell, informed shareholders of the proposed Heineken takeover of the company to bring together three strong businesses to create a regional beverage champion that would realise significant growth opportunities in Southern Africa.

Heineken is strengthening its second position in South Africa (the largest market in Africa), with a unique multi-category portfolio. The acquisition will form a Heineken majority-owned entity producing the brewer’s signature lager and Namibia’s Windhoek, plus Distell staples such as Klipdrift brandy and Savanna cider and a number of wines for export.

The RMB solution

In November 2021, Distell Group Holdings Limited announced a landmark cross-border M&A transaction that would see Heineken making a firm offer to acquire the entire issued share capital in Distell by way of a scheme of arrangement.

RMB acted as financial adviser, sponsor and transaction sponsor, as well as corporate broker to Distell Group Holdings Limited in relation to Heineken International BV’s offer to acquire Distell. The deal was structured in a three-way cross-border combination with Heineken International’s South African Assets, 59.37% of Namibian Breweries (NBL) as well as the potential sale of Distell Namibia to Namibia Breweries.

The transaction will also include combining the majority of the Africa interests of Heineken and Distell. The proposed transaction, which has the potential to galvanise the alcoholic beverages industry in Southern Africa, ascribes an aggregate value for the entire Distell business of R40.1bn.

The announcement is the culmination of a long journey for the transaction team with Distell, having navigated many challenges arising from the transaction’s multi-jurisdictional complexity, pre-transaction restructure of Distell, the three-way combination and COVID-related alcohol restrictions. Importantly, this transaction represents significant and much needed foreign direct investment in South Africa of c.R13.6bn and is a vote of confidence in business in South Africa.

Client enablement

The deal is one of the biggest foreign investments into South Africa in recent times and will result in a combination of Distell’s cider, ready-to-drink beverages, and spirits and wine business with Heineken’s interests in Southern Africa and select markets in East Africa, including a 59.37% interest in Namibia Breweries.

This combination will result in a world-class, unlisted, Southern-African focused alcoholic beverages entity with a leading international beer and cider portfolio. It unites the complementary brands, talent and skills of Distell, Heineken and Namibia Breweries to better serve consumers across the Southern Africa region.

Client	Distell Group Holdings Limited
Size of the deal	R40.1bn
Sector	Financial adviser Sponsor Transaction sponsor Corporate broker
Capabilities	Corporate Finance Advisory
RMB's role	Retail
Country	SA, Namibia