Distell is considering its options ‘through its normal course of reviewing inorganic growth opportunities,’ spokesman Frank Ford said by phone.
Heineken NV, the world’s second-largest brewer, is in talks about a deal for South African wine and spirits maker Distell Group Holdings Ltd.
Heineken approached Distell about a potential acquisition of the majority of its business, the South African company said in a statement Tuesday, confirming an earlier Bloomberg News report. Distell is considering its options “through its normal course of reviewing inorganic growth opportunities,” spokesman Frank Ford said by phone.
Distell shares jumped as much as 10% in Johannesburg, hitting an intraday record. They were up 5.6% 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 0.9% 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 in a separate filing Tuesday.
Distell produces drinks including Klipdrift brandy, Nederburg wine, Amarula cream liqueur, Savanna cider and Bain’s Cape Mountain Whisky. An acquisition would be Heineken’s most significant transaction since 2018, when it agreed 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 15% less than at this point in 2020, according to data compiled by Bloomberg.
Heineken is emerging from one of the beer sector’s toughest crises. Despite gains in Vietnam and Mexico, the brewer is still facing setbacks in key markets such as Brazil and the UK where restrictions on movement and sales have hurt demand. Earlier this year, the company laid off 8 000 employees. Still, it 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. Another driver was China, where bars and restaurants have reopened faster than elsewhere in the world.
Any deal for Distell would see Heineken Chief Executive Officer Dolf van den Brink, who took charge last June, 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.
Bloomberg
