Heineken is merging its Nigerian businesses

Heineken is merging its Nigerian businesses

Heineken has signalled its intent to merge its Nigerian subsidiaries Nigerian Breweries and Consolidated Breweries. 

The Dutch group, which has a majority-stake in both firms, said today (9 May) it has filed a pre-merger notification with the country's Securities and Exchange Commission about the deal. The merger will allow the combined unit to “fully capitalise on the future growth potential of the highly attractive Nigerian beer and malt drinks market”, the brewer said. 

The tie-up will partly help “enhance operating and administrative efficiencies”, the company added. 

Nigerian Breweries is the country's largest beer producer, with just under 50% of the market, while Consolidated Breweries is the third largest producer. 

Nigeria, Africa's richest country, accounts for around half of Heineken's earnings on the continent. 

“Africa is one of the world's most attractive and fastest growing regions for beer, and is a key platform for Heineken's continued investment and future growth,” the company said in a statement. 

However, according to analysts it is the lower-end of Nigeria's beer market that is seeing most growth, which could affect margins in future. 

The country has been the centre of global media attention this week after the kidnapping of more than 200 schoolgirls by terrorists and other attacks. 

Regulatory and “other” approvals could take several months before the merger completes, the brewer said. 

In first-quarter results last month, Heineken reported an 11% rise in volumes in Nigeria