Diageo Announces Restructuring of South African and Namibian Operations

28 Jul 2015 --- Diageo announces that Diageo, Heineken N.V. (Heineken) and the Ohlthaver & List (O&L) Group of Companies, the majority shareholder of Namibia Breweries Limited (NBL), have agreed to restructure their South African and Namibian joint ventures.

When the transaction has completed, Diageo will operate in South Africa and Namibia through wholly-owned subsidiaries. To implement the transaction, Diageo will:

- sell its
  - 42.25% equity stake in DHN Drinks (Proprietary) Limited and transfer the associated shareholder loan to Heineken;
  - 25% equity stake in the Sedibeng brewery in Gauteng, South Africa to NBL and transfer the associated shareholder loan to Heineken; and
  - 15% equity stake in NBL to Heineken
- acquire the remaining shares which it does not already own in brandhouse Beverages (Proprietary) Limited, the beer and spirits sales and marketing joint venture in South Africa, which will become a wholly-owned subsidiary of Diageo.

Diageo will receive a total net cash consideration of ZAR2.5 billion (approximately £128 million), subject to customary adjustments. Completion of the transaction is expected before calendar end 2015, and is subject to regulatory approvals.

Ivan Menezes, Chief Executive, commented: “We have worked very successfully with Heineken and NBL throughout our partnership, growing the beer business and establishing market leadership in spirits. From this leadership position 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 in a focused, simplified ownership structure.”

Jean-François van Boxmeer, Heineken CEO and Chairman of the Heineken Executive Board, said: “For the past 11 years we have benefitted enormously from our close collaboration with Diageo and I would like to thank them for their valued partnership and wish them well for their future in the region. Our new structure allows us to focus solely on the beer category and strengthens our platform for continued growth. We look forward to working with our longstanding partner Namibia Breweries and are excited about our future prospects in this important part of the global beer market.”