Nigerian Breweries Plc is considering paying N7.01 billion for the proposed acquisition of 80% of the economic and voting rights in Distell Wines and Spirits Nigeria (DWSN) and 100% of Distell’s import operations in Nigeria.
The Board of Nigerian Breweries Plc received an offer from Heineken Beverages (Holdings) Limited for the brewing firm to purchase Heineken Beverages’ business and activities in Nigeria after Heineken N.V. acquired Distell Group Holdings Limited in South Africa.
In its statement outlining the deal’s advantages, NB Plc stated that it would allow access to a complementary multicategory portfolio of quickly expanding brands in the wine and spirits market segment and would allow it to take advantage of the substantial growth potential.
The agreement further stated that the sale will resolve any possible dispute between Nigerian Breweries and DWSN, two of Heineken’s owned companies in Nigeria.
In the event that the agreement is approved by the shareholders, Nigerian Breweries would acquire DWSN as a subsidiary. Additionally, Nigerian Breweries will now import, sell, and distribute wines, spirits, and cider goods as part of their expanded business.
Regarding the acquisition’s price, Nigerian Breweries stated in the paper that it had the financial means to complete the transaction. Based on information from its financial statement as of September 30, 2023, the corporation boasts a cash balance of around ₦21 billion.
DWSN was incorporated in Nigeria on 8 March 2018 as a private company limited by shares. The principal activities of the company are to carry on the business of production and distribution of wines, spirits ciders and any other ready-to-drink (RTD) alcoholic and non-alcoholic beverages.
The company operates from a 1.4-hectare site in Ikeja, Lagos State, and currently utilises distributors across the country who distribute its products across thousands of outlets.
In the full year ended 30 June 2023, DWSN generated a net revenue of ₦4.9 billion, and Earnings before Interest Taxation, Depreciation and Amortisation of ₦667 million.
Distell International Holdings Limited owns 80% of the company while Ekulo International Limited and Next International Limited control 10% each. Its financial report for 2023 shows that the company was facing pressure. Its sales and profit nosedived while its equity position turned red.
DSWN recorded more than N3 billion loss in 2023 as sales declined to N4.857 billion, more than 2% below N4.958 billion posted in the comparable period in 2022.
Spooked by negative retained income of more than N2.7 billion, DWSN’s balance sheet broke, recording an accumulated loss of N832 million. In the last three years, DWSN’s profit has been nosediving amidst tight macroeconomic conditions in the Nigerian market.
Nigerian Breweries has called for an Extraordinary General Meeting with its shareholders scheduled for Wednesday, 20th December 2023 in the Grand Ballroom, Oriental Hotel, 3 Lekki Expressway, Victoria Island, Lagos State at 2 pm.
