Heineken approached Distell about a possible acquisition of most of its business, the South African company said Tuesday, confirming an earlier Bloomberg News report. Distell is considering its options, spokesman Frank Ford said by phone.
Distell shares jumped as much as 10%, hitting an intraday record. They were up 5.6% at 9:25 a.m. Tuesday in Johannesburg, giving the company a market capitalization of 33.6 billion rand ($2.4 billion).
Shares of Heineken advanced 0.9% in Amsterdam, valuing the brewer at 57 billion euros ($70 billion). Discussions are ongoing, though there’s no certainty they will lead to a transaction, Heineken said Tuesday.
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.
The PIC increased its stake in 2017 after a shakeup of the drinks maker’s ownership structure, paying 170 rand a share. That’s 19% higher than Distell’s share price at the close on Monday, before the talks were announced.
An acquisition would be Heineken’s most significant transaction since 2018, when it formed a partnership with China Resources Beer Holdings Co., maker of the country’s best-selling beer. A purchase would add to $7.4 billion of deals announced in the global beverage industry this year, about 15% less than at this point in 2020, according to data compiled by Bloomberg.