Heineken extends dominance in Nigeria beer market with potential Champion Breweries takeover

NIGERIA – Heineken NV, the world’s second-largest brewer has launched a mandatory takeover bid for Nigeria based Champions Breweries, seeking to buyout the remaining 15.3% equity stake.

The Dutch brewing company, made the offer through its wholly-owned subsidiary, Raysun Nigeria Limited, Heineken N.V, and plans to purchase up to 1,196,799,164 ordinary shares from the other shareholders of Champions Breweries.

This is according to a recent notice signed by the Chairman of Champions Breweries Plc., Dr Elijah Akpan, and filed with the Nigerian Exchange Limited (NGX), reports Nairametrics.

The move comes months after Raysun Nigeria Limited acquired over 1.9 million shares of the local brewer- Champion Breweries at N2.60 per share, totalling N4.95 billion in January 2021.

The transaction helped to raise the ownership stake of Raysun from about 60.5% recorded as of 31st of December 2020 to 84.7%, giving the company the leverage to launch a takeover bid.

Subsequently, in May 2021, the Board of Raysun granted approval for a take-over offer to be made to all the other remaining shareholders of Champion Breweries, other than Raysun, for the acquisition of the Offer Shares representing 15.3% of the total issued and fully paid-up share capital of the company.

Raysun consequently received the Securities and Exchange Commission’s (SEC) authority to proceed with the offer and filed the documents with the regulator for registration purpose.

Following the registration, Raysun will mow make a tender for the Offer Shares, which the Shareholders may either accept or turn down.

Incorporated in Nigeria in 1974, Champion Breweries started bottling beer in 1976, with an initial capacity of 150,000 hectolitres of beer and 10,000 hectolitres of malt drink.

Heineken began heaping up stake in the company in 2013 when it took a strategic position in the company by procuring 57 per cent equity which was originally held by Montgomery Ventures Inc (Panama).

Other than increasing share-holding in Champion Breweries, Heineken increased its ownership in Nigerian Breweries through a series of share-purchase transactions undertaken since year.

Meanwhile in South Africa, the beer major seeks to enter new alcohol market categories of wine and spirits, as it eyes ownership of Distell, the country’s leading producer and maker of wines, ciders, spirit and ready-to-drink beverages.

Distell, the owner of Amarula, Savanna, Hunter’s Dry and Nederburg brands, says it has made satisfactory progress on the tie-up plan with Heineken.

The acquisition would be Heineken’s most significant transaction since 2018, when it formed a partnership with China Resources Beer Holdings Co., maker of the country’s best-selling beer.

Heineken is emerging from one of the beer sector’s toughest crises. Despite gains in Vietnam and Mexico, the brewer is still facing setbacks in key markets such as Brazil and the UK where restrictions on movement and sales have hurt demand.

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