South Africa: Diageo to restructure its joint venture with Heineken and Namibia Breweries
Diageo has announced it will sell its 42.25% stake in DHN Drinks, a joint venture which owns the licenses for the combined beer, RTD and cider portfolio of Heineken, Diageo and Namibia Breweries Limited (NBL).
With this transaction Heineken will increase its stake from 42.25% to 75% and NBL will increase its stake from 15.5% to 25% in DHN Drinks. NBL will also acquire the 25% stake that Diageo owns in Sedibeng while Heineken will retain its existing 75%. In addition, Diageo will also sell 25% stake of NBL to Heineken.
Heineken said that, “as a result of the agreement, and subject to regulatory approvals, the existing brand house, DHN and Sedibeng joint ventures will be dissolved ahead of the previously agreed April 2018 termination date”.
Ivan Menezes, Chief Executive at Diageo, commented: “We have worked very successfully with Heineken and NBL throughout our partnership, growing the beer business and establishing market leadership in spirits. From this leadership position we now believe that Diageo has the necessary scale to move to the next stage of growth for spirits, RTDs and our beer and cider portfolio in a focused, simplified ownership structure”.
In total Diageo will receive £128 million ($200 million) as part of the deal, which is expected to be closed by the end of 2015.
Sources: Diageo / Heineken