Competition Commission of South Africa recommended the approval of Heineken's takeover of Namibian Breweries

Competition Commission of South Africa recommended the approval of Heineken's takeover of Namibian Breweries
16.09.2022 75

Commission recommends conditional approval of Heineken's proposed takeover of Namibian Breweries and certain Distell operations. 

The Competition Commission has recommended that the Competition Tribunal approve with conditions the proposed transaction whereby the Heineken Group through Sunside Acquisitions Proprietary Limited (Newco) intends to acquire a controlling interest in Namibian Breweries Investment Holdings Limited (NIH) and the flavoured alcoholic beverages (FABs), wine, and spirits operations of Distell Group Holdings Limited (In-Scope Assets).

In South Africa, the Heineken Group operates the Sedibeng brewery, producing a range of beers including, amongst others, Heineken, Amstel, and Windhoek. Prior to the merger, Heineken entered into various agreements with Namibian Breweries Limited (NBL) to manufacture, market, and distribute NBL’s products, such as Windhoek, in South Africa. Heineken also owns and operates a network of 13 distribution depots and undertakes its own primary and secondary distribution to supply its products across South Africa. 

The primary target firms are NIH, and the In-Scope Assets of Distell. NIH is controlled by Ohlthaver & List Beverage Company (Pty) (O&L) and Heineken. 

The Commission found that the merger results in a horizontal overlap in the broad market for FABs and in the narrow market for ciders. The evidence collected by the Commission shows that there is stronger competition between cider brands than between ciders and other FABs.

Taken as a whole, the Commission found that the proposed transaction is likely to substantially prevent or lessen competition in the relevant markets as the merged entity will be a dominant supplier of FABs with a market share above 65% and would be the largest supplier of cider in South Africa. 

To address employment concerns in South Africa, the merging parties have agreed to maintain aggregate employee headcount for a period of five years following the merger and not to retrench any employees below specified managerial grades which includes the bargaining units. The merged entity has also committed, in the event of any retrenchments, to considering retrenched employees for suitable vacancies in Newco for a period of three years following the merger. 

Here you can read the full Media Statement of the Competition Commission of South Africa. 

South Africa 

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