Business
Nigerian Breweries acquires majority shareholding in Distell Nigeria
Nigeria’s foremost brewing company, Nigerian Breweries Plc, has concluded plans to acquire an 80 per cent stake in Distell Wines and Spirits Nigeria Limited as part of efforts to capture significant growth opportunities in the wines and spirits segment of the brewing industry.
The announcement is contained in a notification of proposal sent to Nigeria Exchange Limited and signed by the company secretary, Uaboi Agbebaku, on Wednesday, May 31, 2023
Nigerian Breweries Plc received the offer from Heineken Beverages (Holdings) Limited to buy or acquire 80 per cent majority interests in Distell Wines & Spirits Nigeria Limited (“Distell Nigeria”).
“The Board resolved to consider the offer in detail with support from external legal and financial advisers and thereafter make a decision thereon in the coming weeks. The outcome of the decision will be communicated in due course,” said Agbebaku.
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Distell Nigeria is a subsidiary of Distell International Limited- a company 100 per cent owned by Heineken Beverages. Distell International Limited holds 80 per cent shareholding in Distell Nigeria, which was founded in 2018 with its headquarters in Lagos, Nigeria.
Distell Nigeria is involved in the local production of wines and ciders and the importation of wines, spirits, and flavored alcoholic beverages from Distell Group in South Africa.
The list of brands in its portfolio includes Amarula, JC Leroux, Nederburg, Drostdy Haf, 4th Street, Bain’s, Knights, Chamdor, Hunters, and Savanna.
This acquisition will further strengthen the company’s leadership position in the brewing segment of the Nigerian manufacturing sector.
The pace at which the net profit of Nigerian Breweries accelerated in 2022 was considerably weaker than that of its revenue as record inflation in Nigeria pushed up expenses and other income dropped by 35.4 per cent.
Revenue was up by a quarter at N550.6 billion, less than one per cent of that earned from exports to countries outside its primary market Nigeria.
Cost of sales, totaling N337.3 billion, gulped N60.4 billion more than a year earlier, according to details of the brewer’s audited financials. This is largely due to a surge in raw materials spending, which alone accounted for 73.1 per cent of the expenses.
Selling and distribution expenses increased by 38.1 per cent, due to increased spending on transportation which, standing at N56.3 billion, consumed nearly three times that of the year before.
The company pared its finance costs – what the company spent on servicing debt – by 31.4 per cent, much of that after reducing its interest expense on lease liabilities from N11.1 billion to N8.4 billion.
The firm also proposed a final dividend of N1.03 per share to shareholders in addition to the interim dividend of N0.40 per unit announced in October, bringing its total payout for the year to N13.9 billion (N1.43 per share).