Heineken to merge Nigerian Breweries and Consolidated Breweries

Heineken announced on 9 May 2014 that its majority-owned subsidiaries Nigerian Breweries and Consolidated Breweries will merge, pending regulatory approval. It is intended that Nigerian Breweries, as the remaining legal entity, will stay listed on the Nigerian Stock Exchange after the completion of the merger.

The transaction is expected to derive benefits from increased economies of scale, enhance operating and administrative efficiencies while increasing the new company’s speed and agility in response to market developments, Heineken says.

Nigeria is the continent’s largest economy, with a significant beer and malt drinks market, underpinned by favourable demographics: an expanding population of almost 180 million people, of whom more than 70 percent are under the age of 30; increasing levels of urbanization and a rapidly developing middle-class supported by rising income levels.

Nigeria has annual beer sales of around 18 million hl, second only to South Africa on the continent. Heineken has around a 70 percent market share in Nigeria, with Diageo’s Guinness accounting for over 20 percent.

Siep Hiemstra, Heineken’s President for Africa and Middle East, also told media on 9 May 2014 that Heineken plans to spend EUR 500 million (USD 690 million) annually in Africa over the next few years to maintain sales growth.

Africa accounts for one-fifth of Heineken’s business and is growing fast, he said.

Heineken has 56 plants in 20 African countries, and Mr Hiemstra said it was mulling over further acquisitions.