Diageo and Heineken teamed up with Namibian Breweries in South Africa and neighbouring Namibia in 2004

Diageo and Heineken teamed up with Namibian Breweries in South Africa and neighbouring Namibia in 2004

Diageo has reiterated its commitment to the beer category, despite pulling out of its South African and Namibian brewing joint-venture with Heineken and Namibian Breweries Ltd, three years ahead of schedule.

The two companies announced today that Diageo will sell off its interests in the partnership it set up with Heineken and NBL, with a view to operating "wholly-owned subsidiaries". The JV dates back 11 years, when the companies set up Brandhouse Beverages in South Africa.

The transactions - full details of which can be found here - will result in Heineken paying Diageo ZAR2.5bn (US$198m). Completion of the transition, which had initially been agreed for April 2018, is expected before the end of the year.

"We have worked very successfully with Heineken and NBL throughout our partnership," said Diageo CEO Ivan Menezes. "We now believe that Diageo has the necessary scale to move to the next stage of growth for spirits, RTDs and our beer and cider portfolio."

For just-drinks' commentary on the move, click here

Jean-François van Boxmeer, Heineken's CEO & chairman, added: "We have benefitted enormously from our close collaboration with Diageo.

"Our new structure allows us to focus solely on the beer category and strengthens our platform for continued growth."

When contacted by just-drinks today, a spokesperson for Diageo said the firm remains committed to beer, highlighting that South Africa is the company's fifth-largest spirits market in volume terms. "Beer has a vital role to play for Diageo on the Africa continent," the spokesperson said. "Diageo will continue to pursue a total beverage alcohol strategy in Africa."

To read Diageo's official statement, click here.

Heineken's statement can be found here.