Heineken acquires additional shares in Nigerian Breweries

NIGERIAHeineken International, a Dutch multinational brewing company, has increased its stake in Nigerian Breweries shares through an acquisition of 3.3 million additional shares.

According to a notification to the Nigerian Stock Exchange, signed by the Company’s Secretary, Uaboi G. Agbebaku, the acquisition was made on the bourse over three transactions in September this year.

An analysis conducted by Nairametrics, revealed that Heineken spent around N138 million (about US$358,000) in the transaction.

This is the second time in a span of two months that Heineken is purchasing more shares of the Nigerian subsidiary from the Nigerian bourse.

Last month, Heineken reported that it had acquired 274, 542 shares at a cost of N37 per unit and the recent share acquisition will only marginally increase Heineken’s total shareholding in the company which currently stands at 56%.

Nairametrics reported that the purchase of the shares of Nigerian Breweries by Heineken and other majority shareholder has mopped up stray volumes on the bourse, and pushed the stock price higher by 32.4%.

When Heineken bought the shares in August, the price per unit was N31, recent purchases by major shareholders have however, pushed the price to the current value of N41.05, which is 39.21x earnings.

The Nigerian Breweries is the largest brewing company in Nigeria with over 11 production sites in the country and a market share of about 55% according to 2019 figures.

Recent share acquisition will only marginally increase Heineken’s total shareholding in the company which currently stands at 56%.

The remaining 45% is commanded by International Breweries which has 23% of the beer market in 2019 and Guinness which holds 22% of the domestic beer sales.

Despite of its market dominance, Nigerian Breweries was affected by the corona virus pandemic which caused a disruption in the global and domestic demand and supply chain.

Profit after tax of the largest brewer dropped by as much as 58%, at the back of the adverse impact of the sharp contraction in economic activities.

The knock-on effect of the COVID-19 lockdown, which affected the trade segment of the business, also affected the company sales and this triggered the 11% drop in revenue in the first half of the year.

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