The world’s second-largest brewer, Heineken, is in talks to acquire South African wine and spirits maker, Distell Group.
Distell produces Klipdrift brandy, Nederburg wine, Amarula cream liqueur, Savanna cider and Bain’s Cape Mountain Whisky. Remgro Ltd., an investment vehicle of South African billionaire Johann Rupert, and Public Investment Corp., Africa’s biggest pension fund, each hold a little more than 30% of Distell, according to data compiled by Bloomberg.
“Bearing in mind that there can be no certainty that an agreement will be reached,” Distell said, “shareholders are advised to exercise caution when dealing in their Distell securities until a further announcement is made.”
Heineken also emphasised that a transaction was not yet guaranteed.
Heineken is emerging from one of the beer sector’s toughest crises. Despite gains in Vietnam and Mexico, the brewer is still facing setbacks in key markets such as Brazil and the UK where restrictions on movement and sales have hurt demand.
Earlier this year, the company laid off 8 000 employees. The brewer surprised analysts in April with stable first-quarter sales as emerging markets made up for declines in Europe.
South Africa was one of Heineken’s best-performing markets, which is surprising given the country’s recurring ban on alcohol.