Earlier today, Diageo and Heineken announced the dissolution of their joint venture in South Africa and Namibia with Namibian Breweries Ltd (NBL). Here are the full details behind the transaction.
- In 2003, Diageo and Heineken acquired an effective 28.9% share of the family-owned NBL operation in Windhoek
- A year later, Diageo, Heineken and NBL teamed up in South Africa to create Brandhouse, an entity designed to sell Diageo’s spirits, RTDs, ciders and Guinness as well as Heineken and NBL’s beers
- Brandhouse was 50%-owned by Diageo and DHN Drinks, which itself was owned by the three companies: Diageo and Heineken held 42.25% each, with NBL holding the remaining 15.5%
- In 2008, the firms reconfigured the partnership, giving it a ten-year term what was scheduled to run until April 2018. The reconfiguration saw the JV move from a cost-sharing structure to a cost- and profit-sharing agreement
- Also in 2008, Heineken and Diageo began construction of a brewery in South Africa. The facility, in the Sedibeng area of Johannesburg, opened in 2010, with Heineken owning 75% and Diageo holding the balance
- Today's transaction comprises the following divestments by Diageo:
- Its shareholding in DHN Drinks to Heineken and NBL
- Its shareholding in the Sedibeng Brewery to NBL, and
- Its shareholding in NBL to Heineken
- Diageo will then take full control of Brandhouse and run it as a standalone company
- As a result of these moves, Heineken will pay Diageo ZAR2.51bn (US$199m)
- Brandhouse will begin operating under the aegis of Diageo South Africa from the start of October
- South Africa is Diageo’s fifth largest spirits market in volume terms
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