SOUTH AFRICA – Diageo announced that it has entered into an agreement for the sale of South Africa’s United National Breweries (UNB), a maker of sorghum-based traditional African beer to Delta Corp of Zimbabwe, reports Beverage Industry News.

The British-based alcoholic beverage firm said that the transaction is subject to regulatory approval and expected to close in the second-half of 2019.

The acquisition by Delta would is its second outside of Zimbabwe after it acquired Zambia’s National Breweries Plc. which is also a brewer of sorghum based beer.

Delta acquire Zambia national breweries from Heinrich’s Syndicate, also a subsidiary of AB InBev in 2017.

Delta Corporation is Zimbabwe’s largest beverage company and a subsidiary of Anheuser-Busch InBev is the country’s leading brewer of sorghum based beer.

Delta has been bulking up after the Coca-Cola Company issued a notice to terminate its bottler agreement with the company following the “big beer merger” of 2016 a move that could see Delta lose a third of its revenue and profits.

This saw AB InBev acquire the world wide assets of SABMiller, Delta’s former largest investor.

Delta is one of two firms that bottles Coca-Cola products in Zimbabwe.

Diageo acquired full ownership of united national breweries in 2015 after paying out US$58m to its former partner Pestello Investments for the remainder.

The transaction marks the second step out of the beer market in South Africa after Diageo and Heineken dissolved their joint ventures in South Africa and Namibia and Diageo sold its 42.25% stake in DHN Drinks and its 25% stake in the Sedibeng brewery in Gauteng, South Africa to the Dutch brewer in 2015.

Last year, Diageo agreed to sell 19 brands to US-based distiller Sazerac for an aggregate consideration of $550mamong the brand included Seagram’s VO, Seagram’s 83, Seagram’s Five Star, Myers’s, Parrot Bay, Romana Sambuca and Popov, as well as Yukon Jack, Goldschlager, Stirrings, and The Club.

UNB produces and offers a wide range of beers, including Chibuku, Tlokwe, Joburg, zebra beer, shake shake, country brew and Kalahari sorghum.