NIGERIA – The Nigerian Breweries Plc’s proposed merger with Consolidated Breweries Plc got a boost last week as the Federal High Court has approved a court ordered meeting of shareholders of the company to consider the proposal.
Managing Director/Chief Executive Officer of Nigerian Breweries Mr. Nico Vervelde, who disclosed this, noted that the meeting has been scheduled to hold on Thursday December 4, 2014 in Lagos.
Having obtained the approval of the statutory authorities, the distribution of the Scheme of Merger document to shareholders will commence immediately.
The essential proposal before our shareholders is to combine the operations of Nigerian Breweries Plc and Consolidated Breweries Plc into one legal entity effected through a Scheme of Merger with Nigerian Breweries being the surviving entity,” Vervelde said in a statement.
For the proposed merger to be approved, 75 per cent of the shareholders present and voting at the meeting will need to vote in its favour.
However, Heineken N.V, the majority shareholder in Nigerian Breweries, has informed the company that it will not vote at the meeting. Heineken’s decision will give the minority shareholders of the company the sole discretion to decide whether or not to approve the merger of the two companies.
Under the terms of the Scheme of Merger, it is proposed that each Consolidated Breweries shareholder will receive four Nigerian Breweries shares for every five shares held in Consolidated Breweries or elect for a cash alternative.
According to the company, the proposed merger is expected to deliver increased value to its shareholders, employees, customers, distributors, suppliers of the combined businesses, and the Nigerian economy as a whole.
While Nigerian Breweries dominates the mainstream and premium beer market with its flagship product Star and others such as Heineken and Gulder, Consolidated Breweries is a strong player in the value segment of the market with products like Turbo King and 33 Export Lager Beer.
Analysts have therefore expressed confidence that new combined entities will have a wider product portfolio covering all the major beer segments and will give Nigerian Breweries more exposure to the value segment.