Dutch brewer Heineken has been given the all-clear by the Competition Commission to buy South Africa’s biggest alcohol maker Distell.
There are some conditions though, Distell has to sell Strongbow, its cider brand. It also has to invest more than R10 billion on its local operational footprint, along with transferring more than R3 billion in shares to workers.
The proposed takeover doesn’t come as a surprise as Heineken announced at the end of 2021 that it wants to buy Distell for about R40 billion. The aim of the transaction would have been to become the regional competitor for Anheuser-Busch InBev, the world’s largest brewer.
Distell’s shareholders approved the deal in February and now the Competition Tribunal will oversee and approve the purchase.
News24 reports that the commission said in a statement on Friday that, taken as a whole, the transaction is likely to substantially prevent or lessen competition in the merged entity’s relevant markets. It would be a dominant supplier of flavoured-alcoholic beverages with a market share of above 65% as well as be the largest cider supplier, with Distell’s brands including Savanna and Hunters Dry, while Heineken owns Strongbow and the Fox brands.
To avoid dominating the market, Heineken will be required to sell Strongbow.
Image credit: The Africa Report