Amarula bottle

Distell is the second-largest cidermaker in the world and also produces a range of flavoured alcoholic beverages, wines and spirits

Dutch brewer Heineken has unveiled plans to form a €4bn (£3.4bn) African drinks giant with the takeover of Distell and Namibia Breweries (NBL).

The move would see the group branch out from its traditional beer and cider portfolio into wines and spirits, including scotch.

Heineken intends to take control of the two companies and combine them with its own business in South Africa.

Distell is the second largest cidermaker in the world – behind Heineken – and also produces a range of flavoured alcoholic beverages, wines and spirits. Its brands include Savanna apple cider, sub-Saharan African spirit Amarula, and Scottish Leader and Deanston whiskies, which are made at its East Kilbride site.

NBL, which is Heineken’s regional partner, is the beer market leader in Namibia.

Heineken CEO Dolf van den Brink said he was “very excited” to bring together the three businesses to create “a regional beverage champion” that was perfectly positioned to capture “significant growth opportunities” in southern Africa.

“We have successfully built our business in Africa over 100 years,” he added. “Today’s announcement is a vote of confidence in the long-term prospects of South Africa and Namibia, and we commit to being a strong partner for growth and to make a positive impact in the communities in which we operate.”

Heineken expected the combination to generate significant synergies, with the enlarged business presenting further growth opportunities across southern Africa.

The deal values Distell at €2.2bn, NBL at €400m and Heineken South Africa (HSA) at €1.5bn.

Heineken will pay €1.3bn in cash alongside adding HSA to a new, unlisted public holding company for a 65% controlling stake in the venture, with the remaining shares to be taken by Distell shareholders who choose to reinvest.

The brewer has already received the backing of 56% of Distell shareholders and 68% of the votes of minority shareholders of NBL.

Van den Brink added: “Distell is a highly regarded, resilient business with leading brands, a talented workforce and a strong track record of innovation and growth in Africa. With NBL, there are exciting opportunities to expand premium beer and cider in Namibia and grow the iconic Windhoek brand beyond its home market.

“Together we will be able to better serve our consumers and customers through a unique combination of multi-category leading brands and a strengthened route-to-market. The businesses share common values derived from their family heritage, long-term perspectives, entrepreneurial spirit, and care for people and planet.”

Distell CEO Richard Rushton said: “Together, this partnership has the potential to leverage the strength of Heineken’s global footprint with our leading brands to create a formidable, diverse beverage company for Africa.”