NBL in big new venture

NAMIBIA Breweries Limited (NBL), Diageo plc and Heineken International BV announced last week that they had reached an agreement to form a new joint venture for their combined beer and cider businesses in South Africa, to be called DHN Drinks (Pty) Limited.

The new joint venture builds on the success of Brandhouse Beverages (Pty) Limited, the parties’ current cost-sharing joint venture in South Africa which was formed in July 2004. NBL will own 15,5 per cent while Diageo and Heineken will each own 42,25 per cent of DHN Drinks.Each party will share in the profits of DHN Drinks in proportion to their shareholding.Brandhouse will continue to market and distribute the parties’ products in South Africa.The transaction, which is subject to regulatory approval, is expected to be completed on March 31.In addition, Diageo and Heineken have also reached agreement on the terms of a second joint venture to construct and operate a new brewery and bottling plant in Gauteng province, South Africa.Heineken will own 75 per cent and Diageo will own 25 per cent of this company, which will produce Amstel and certain other key brands.Namibia Breweries Limited’s Chairman, Sven Thieme, expressed his delight about the intensified relationship with Heineken and Diageo saying: “Following the successful establishment of Brandhouse in 2004, we have as a next step, put our brands together so as to maximise the mutual benefits of a joint portfolio of premium products.For us this investment means that NBL now has a tangible commercial interest in the sales and distribution of all brands that are part of this new profit sharing venture.”Stuart Fletcher, President Diageo International said: “The decision by Diageo, Heineken and Namibia Breweries to commit to a closer relationship in South Africa reflects the success of Brandhouse and acknowledges the changing nature of the beverage alcohol market in South Africa “We have already demonstrated that a combined beverage alcohol distribution company can capitalise on the growth opportunities in markets such as South Africa and the new structure will enable us to realise further growth opportunities as a result of the strong platform we will create together.”Heineken’s Regional President Africa and the Middle East, Tom de Man, commented: “With Africa Heineken’s fastest growing region, with the Heineken brand growing 70 per cent in South Africa and Amstel very clearly still a favourite with South African consumers, there is no better time to invest in growth.Our three businesses already have a strong, successful partnership and I am excited about the new opportunities that the combination of our brands and local brewing will create.”NBL will own 15,5 per cent while Diageo and Heineken will each own 42,25 per cent of DHN Drinks.Each party will share in the profits of DHN Drinks in proportion to their shareholding.Brandhouse will continue to market and distribute the parties’ products in South Africa. The transaction, which is subject to regulatory approval, is expected to be completed on March 31.In addition, Diageo and Heineken have also reached agreement on the terms of a second joint venture to construct and operate a new brewery and bottling plant in Gauteng province, South Africa.Heineken will own 75 per cent and Diageo will own 25 per cent of this company, which will produce Amstel and certain other key brands.Namibia Breweries Limited’s Chairman, Sven Thieme, expressed his delight about the intensified relationship with Heineken and Diageo saying: “Following the successful establishment of Brandhouse in 2004, we have as a next step, put our brands together so as to maximise the mutual benefits of a joint portfolio of premium products.For us this investment means that NBL now has a tangible commercial interest in the sales and distribution of all brands that are part of this new profit sharing venture.”Stuart Fletcher, President Diageo International said: “The decision by Diageo, Heineken and Namibia Breweries to commit to a closer relationship in South Africa reflects the success of Brandhouse and acknowledges the changing nature of the beverage alcohol market in South Africa “We have already demonstrated that a combined beverage alcohol distribution company can capitalise on the growth opportunities in markets such as South Africa and the new structure will enable us to realise further growth opportunities as a result of the strong platform we will create together.”Heineken’s Regional President Africa and the Middle East, Tom de Man, commented: “With Africa Heineken’s fastest growing region, with the Heineken brand growing 70 per cent in South Africa and Amstel very clearly still a favourite with South African consumers, there is no better time to invest in growth.Our three businesses already have a strong, successful partnership and I am excited about the new opportunities that the combination of our brands and local brewing will create.”