By Lehlohonolo Lehana.
Distell’s shareholders overwhelmingly approved Heineken’s R40.1bn purchase of SA’s biggest alcoholic drinks maker, taking the Dutch brewer one step closer to creating an African alcohol powerhouse.
The merger is now subject to approval by competition authorities in South Africa and abroad.
The approval follows Distell’s extraordinary general meeting on Tuesday, where shareholders cast their votes on resolutions related to the deal, such as the scheme of arrangement and the approval of the Distell Namibia transaction.
Each resolution received support from more than 94% of the shareholders.
However, despite the move being supported by the majority, some shareholders have spoken out against it, with Ninety One saying, for instance, that the deal would result in Heineken “unceremoniously snaffling” Distell, that the R180 per share offer was too low for the company.
Investment specialist at Ninety One Rob Forsyth said: “The proposed scheme of arrangement involves a complicated web of transactions between Heineken and Distell. The cash offer is not appealing.
Forsyth added that Distell is well placed to take advantage of global trends that have seen beer lose market share to other beverages like spirits and wine. In addition to its Savanna cider brand, Distell, which is the second-largest cider producer in the world, also owns the Hunters Dry, Nederburg, JC le Roux, Klipdrift and Amarula brands.
Forsyth highlighted the growth of the global cider market and Distell’s flexible local production as the company’s other competitive advantages.
The Savanna maker’s CEO Richard Rushton said the company had engaged twice with Ninety One on its views. However, he said Distell management’s unanimous view, as well as that of the independent and full boards, was that the “landmark transaction” is good for every party involved, including South Africa.
He added that the offer had gone through “an extensive” negotiation and evaluation process, using proven methodologies.