The South Africa Competition Commission has approved Heineken’s proposed acquisition of the wine and cider company Distell Group, with conditions.<\/p>\n
Distell Group owns brands such as Hunters Dry, Savanna, Klip Drift, JC Le Roux and Amarula – amongst others.<\/p>\n
According to the commission, the move by Heineken could lead to them having a 65% market share in the country, making it the largest cider supplier in South Africa.<\/p>\n
It said this could substantially prevent or lessen the competition in the relevant markets.<\/p>\n
For the transaction to have been approved, Heineken agreed to divest its cider brand Strongbow in South Africa and other countries subject to the South African Customers Union.<\/p>\n
Heineken launched Strongbow (a cider brand) in South Africa in 2016 and manufactured and supplies several South African craft beer brands, including Jack Black and Stellenbrau.<\/p>\n
The Competition Commission further put in place six public interest commitments as conditions for approval – one being that the beer group invest R10 billion into the country over a five-year period.<\/p>\n
Domestically, Heineken Group also operates the Sedibeng brewery, producing a range of beers, including, amongst others, Heineken, Amstel, and Windhoek.<\/p>\n
According to the commission, the acquisition will see the merged entity also: establish an R400 million fund to invest in SMEs’, make an R200 million contribution to localisation and growth initiatives within South Africa and make an R165 million investment into tavern transformation.<\/p>\n
Talk about the acquisition dates back to November<\/a> <\/strong>last year when the group said that it planned to buy Distell for 2.2 billion euros (R38.4 billion), creating a new regional group to compete with larger rival Anheuser-Busch InBev and spirits giant Diageo.<\/p>\n Heineken said it would also look to buy a majority stake in the owner of Namibia Breweries, a regional partner.<\/p>\n
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