Heineken acquires 1.9 billion Champion Breweries’ shares to grow Nigerian beer market
To further bolster its equity in the Nigerian beer market, Heineken B.V., the Dutch brewer, has purchased an additional 1.9 billion ordinary shares of Champion Breweries located in Uyo, Akwa Ibom state.
The purchase was consummated by Heineken through its subsidiary, Raysun Nigeria Limited. Heineken purchased the new shares at N2.60 per unit at a total of N4.95 billion on January 7,2021.
With this share acquisition, Heineken now has a total of 84.7 percent in Champion Breweries, a move to further expand its control of the Nigerian Beer market and put it in a strong position as the majority shareholder to make a takeover attempt.
Asset Management Nominee and Akwa Ibom Investment Corporation, which held 12.3 per cent and 10 per cent holdings respectively in the company prior to Heineken’s latest round of share purchase, were the other substantial shareholders in Champion Breweries. Champion Breweries started bottling beer in 1976, with an initial capacity of 150,000 hectolitres of beer and 10,000 hectolitres of malt drink.
Apparently reacting to the transaction, the shares of Champion Breweries closed on the Nigerian Stock Exchange on Monday at N1.48 per share, gaining almost the 10 per cent daily ceiling allowed by the bourse. The stock has appreciated by 58.82 per cent since Heineken’s latest share acquisition on January 7, 2020.
Champion Breweries has had its fair share of competition from three giants in the Nigerian beer market-Nigerian Breweries, International Breweries and Guinness. Operating with two products distributed in few regions of the country has, Champion Breweries has been struggling to find its feet in the highly competitive beer market.
Competitors such as International Breweries, Nigerian Breweries and Guinness are either expanding their production capacity or introducing new brands. Recently, Nigerian Breweries Plc commissioned a PET bottling line in Ijebu-Ode, Ogun state. The company acquired a controlling interest in Sona Group in January 2011 and also merged with Consolidated Breweries Plc, thereby adding to its three breweries in Ijebu-Ode, Awo-Omama, and Makurdi to the Nigerian Breweries.
In 2017, AB InBev acquired 72.17 per cent of SABMiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB InBev acquiring controlling interests in the company.After the acquisition, a merger arrangement was later consummated with International Breweries Plc and two other local brewers: Intafact Beverages Limited, makers of Hero beer which is popular in the South-Eastern part of Nigeria, located in Onitsha Anambra State, and Pabod Breweries Limited, makers of Grand Lager, located in Port-Harcourt. All are now controlled by AB InBev.
Heineken currently has a 37.94 percent stake in Nigerian Breweries, Nigeria’s largest brewer by market size and the most capitalized beer maker in the country.
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