Distell, SA’s largest wine, cider and spirits maker, says it has made satisfactory progress on a tie-up with Heineken even as it looks set to push back the time frame to release details of the takeover offer from the No 2 beer maker.
“Satisfactory progress has been made with regard to the discussions, with certain issues still to be agreed,” Distell said in a statement on Wednesday. “The parties are committed to finalising these outstanding issues in the shortest possible timeframe and Distell will inform shareholders immediately upon their finalisation.”
Distell had pencilled in the end of September to make public details of the offer Heineken has made for a controlling stake. It has been in talks with the Dutch brewer since May on a deal that could be worth more than R30bn and bulk up Heineken’s presence on the continent where it is vying for market share with AB InBev.
The deal would make Heineken the latest foreign company to spot potential in SA firms and boost President Cyril Ramaphosa’s drive to attract private sector investments in an economy that took a further hammering from the Covid-19 lockdown restrictions.
The deal comes weeks after investors in Imperial Logistics, SA’s biggest commercial transport firm, overwhelmingly approved a nearly R13bn takeover offer from Dubai Port World, crushing dissent from at least one top five institutional shareholder, PSG, that the offer undervalued Imperial.
Canada’s Volaris is finalising a buyout of nearly R1bn for small Durban-based technology firm Adapt. Pepisco sealed a transaction of more than R20bn transaction to buy Pioneer Foods, one of the US-based snack food giant’s biggest investments outside its home market.
For Distell, the deal would give it a deep-pocketed parent competing with Ab-InBev and Carlsberg for a share of emerging markets. Dutch-based Heineken has been embarking on a “beyond beer” strategy to broaden its drinks portfolio and has been buying cider producers in Australia and launching alcoholic flavoured waters as some consumers in the US move away from beer.
It could also hand Distell’s biggest shareholder, Remgro, a windfall that may help it crush discounts to the sum of its parts.
Distell had reported that headline earnings tripled to R1.7bn in its year to end-June, when revenue bounced back to pre-Covid-19 levels in SA. It owns brands such as Hunter’s Dry, Savanna cider, Klipdrift brandy, and Bain’s whisky added to Heineken’s expanding portfolio, and has presence in other African markets such as Kenya, Mozambique and Nigeria.
Distell's share price was more than 2% higher at R187.66 at close of trade, bringing gains so far this year to nearly 100% and valuing it at R42bn.
With Katharine Child and Tiisetso Motsoeneng gernetzkyk@businesslive.co.za
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