Nigerian Breweries finalizes acquisition of major stake in Distell Wines
…Plans brewery closures amid strategic shift
Nigerian Breweries (NB) has announced its impending completion of the purchase of an 80% share in Distell Wines & Spirits Nigeria Limited. This transaction is expected to be finalized by mid-year, according to Hans Essaadi, Managing Director/CEO of NB Plc, who spoke at the company’s pre-annual General Meeting media briefing in Lagos.
Amidst a reevaluation of its operational strategy, the company also declared its decision to cease operations at two of its nine brewing facilities in Nigeria. This move is part of a broader corporate restructuring aimed at addressing the challenges imposed by the economic environment, including high inflation, currency devaluation, and limited foreign exchange availability.
Essaadi explained that the difficult economic conditions, marked by persistent inflation and reduced consumer spending, necessitated a consolidation of operations. “This restructuring will enable more efficient cost management and better allocation of resources, setting the stage for sustainable growth in the future,” he noted.
The acquisition of Distell Wines & Spirits is strategically aligned with NB’s ambitions to diversify beyond its traditional beer offerings. “Acquiring Distell will enhance our portfolio across multiple beverage categories, bolstering our market presence and ensuring long-term profitability by introducing new products in wines, spirits, and flavored beverages,” Essaadi elaborated.
Originally announced in June 2023, the acquisition aims to leverage growth opportunities within the wine and spirits sectors of the beverage industry. The proposal, as detailed in a notice to the Nigeria Exchange Limited signed by company secretary Uaboi Agbebaku, originated from an offer by Heineken Beverages Limited.
Additionally, Essaadi highlighted the support from Heineken NV, NB’s majority shareholder, which holds approximately 57% of the company. Heineken NV has pledged to participate in upcoming financial rights issues, a move that underscores its commitment to and confidence in the Nigerian subsidiary’s future.
“We are looking to convert foreign exchange debt into local debt to reduce volatility and enhance financial stability,” Essaadi remarked, emphasizing the need for fiscal prudence in unpredictable times.
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