Heineken intends to buy Distell for R40 billion

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As investors wait in anticipation to cash in on the sale of Distell to global Brewer Heineken – the impact of the deal on jobs is still not clear. Dutch brewer Heineken announced on Monday that it intends to buy Distell for R40 billion.

Distell employs over 4 000 workers in South Africa.

Analysts say the deal is likely to get the green light from the competition regulators as the companies operate in different segments.

Distell is Africa’s leading producer and marketer of cider, wines and spirits.

Heineken to buy Distell: 

The deal was first announced in May and it’s expected to open doors for Heineken to other parts of the continent where Distell has already made inroads.

Distell produces brands such as Hunter’s dry, Savanna and Nederburg wine.

Analysts say that the competition commission is likely to approve the deal with strict conditions to ensure job preservation and equity ownership…

Director of Semo Advisory and Consulting, Katishi Masemola says,  “If you ask me whether the authorities will approve this measure based on the evaluation of public interest concerns my submission is that there will be conditions imposed.”

The proposed measure is expected to contribute meaningfully to foreign direct investment. But Masemola is concerned that this deal may create market dominance by foreign firms.

Masemola is optimistic that the deal will not create barriers of entry to SMMEs.

Heineken is expected to offer 15% of the stake to Back Economic Empowerment.

“If this measure is approved I don’t see the concerns arising around barriers of entry. But if the new entrants possess the ability to foreclose the new entrants, then this will be a problem,” Masemola explains.

The deal is subject to shareholder approval as well as the Competition Commission.

2 years ago