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CASTLE MALTING NEWS en colaboración con www.e-malt.com Spanish
10 January, 2022



Brewing news Nigeria: Heineken opens takeover bid of minority shares in Champion Breweries

Heineken opened on January 10 the application list for a N3.11 billion takeover bid of minority shares in Akwa Ibom-based Champion Breweries, a move that may increase the controlling equity stake of the Netherlands-based Heineken in the Nigerian brewer to about 76 per cent, The Nation reported.

Transaction report obtained at the weekend indicated Heineken, through its wholly-owned subsidiary, Raysun Nigeria Limited, plans to acquire about 1.197 billion ordinary shares of 50 kobo each or about 15.3 per cent additional stake in Champion Breweries under a mandatory takeover bid (MTO). The transaction price is N2.60 per share.

Application list for the MTO, approved by Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), opened on Monday, January 10, 2022 and will close on Monday, January 31, 2022.

The qualification date for the MTO was Friday, December 31, 2021, implying that only minority shareholders of Champion Breweries as at the close of business on December 31, 2021 can participate in the ongoing offer. Shareholders may accept the MTO at their discretion.

Heineken holds the majority equity stake in both Nigerian Breweries and Champion Breweries, which are both quoted on the NGX. Heineken, through Raysun Nigeria Limited, holds 60.7 per cent majority equity stake in Champion Breweries. Akwa Ibom State holds 10 per cent equity stake while other Nigerian shareholders hold 29.3 per cent equity stake.

Champion Breweries’ current shareholding base of 7.83 billion ordinary shares of 50 kobo each include 4.75 billion for Raysun Nigeria, 782.9 million ordinary shares for Akwa Ibom State and 2.29 billion ordinary shares for other investors.

The acquisition of the full MTO target of 1.197 billion ordinary shares will increase Heineken’s Raysun Nigeria’s shareholding from 4.752 billion shares or 60.7 per cent to 5.949 billion ordinary shares or about 75.99 per cent equity stake.

The MTO was triggered by the provisions of Section 131, Part XII of the Investment and Securities Act, No. 29, 2007 and Rule 445 of SEC Rules and Regulations, 2013.

Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders. There are however exemptions in few instances.

In a statement signed by Chairman, Champion Breweries Plc, Dr Elijah Akpan, the company noted that the board of Raysun Nigeria had on May 10, 2021, granted approval for the MTO to be made to all the other shareholders of Champion Breweries other than Raysun Nigeria.

Raysun then received SEC’s authority to proceed with the offer and subsequently filed the offer document with the SEC for registration.

It is unclear whether Heineken will, after the MTO, consider merging Champion Breweries with Nigerian Breweries, although it had rebuffed such suggestion in the past.

Champion Breweries’ principal activities now consist of contract brewing services to Nigerian Breweries as well as brewing and packaging of Champion Lager Beer and non-alcoholic Champ Malta.

Shareholders had earlier urged Heineken to merge the two companies noting that the consolidation in the breweries sector had placed a multiple-entities strategy in disadvantage as major investors such as SABMiller and Diageo consolidate their operations in Nigeria to create critical mass that can drive turnover in the increasingly competitive market.





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