The Boards of Directors of International Breweries Plc Intafact Beverages Limited and Pabod Breweries Limited have agreed to explore a combination of the three businesses via a Scheme of Merger subject to requisite regulatory and shareholders’ approvals.
The company said in a statement that the proposed merger which was considered and approved at IBPIc’s board meeting on 2 June 2017, is expected to be beneficial to all stakeholders, particularly shareholders. The proposed merger is expected to generate both revenue and cost synergies, enhanced operational efficiencies, better resource management and more streamlined operations.
The proposed merger is expected to generate both revenue and cost synergies, enhanced operational efficiencies, better resource management and more streamlined operations.
On receipt of regulatory approvals (including The Nigerian Stock Exchange and the Securities and Exchange Commission), all parties will take further steps to consummate the proposed merger including obtaining the approval of their respective shareholders at separate Court-Ordered Meetings. All three companies, which are indirect subsidiaries of Anheuser-Busch InBev SA/NV, will continue to operate as usual until the receipt of required approvals. Further development will be communicated to shareholders in due course.
This announcement has finally heralded the coming of ABInbev into the Nigerian market. It would be recalled that last year, SAB Miller was acquired by ABInbev to form the largest brewer in the world dwarfing Heineken, Diageo and Suntory on the global scale.
For many years, the Nigerian beer market has been dominated by Heineken’s Nigerian Breweries and Diageo with the former having a business volume and revenue base almost triple of the former. The acquisition of more than 51% interest in Nigerian Breweries when the local unit fell on hard times in 2006 has seen Heineken acquiring regional brewers to shore up its scale and domination of the market.
The expansion of its business ahs seen the creation and localisation of new brands on its stable. Heineken has shored up its brand portfolio from about seven to nearly 30 brands and extensions.
Diageo in its own right has seen one of the most turbulent but locally-relevant business model. While the business has been in a loss position for the past 24 months, the company had grown local brands such as Orijin, a development that analysts saw as a threat to its flagship brands such as Guinness Foreign Extra Stout.
Competition from Nigerian Breweries and International Breweries has come to play to weaken the Diageo’s Guinness Nigeria PLC. As noted by analysts, real competition will now begin in the market. The tough recession in Nigeria has seen brewers and non-alchoholic bottlers raising prices by close to 15 to 30%. For brewers, the tide is expected to change as three big brewers will jostle for a national market share.
About International Breweries Plc
International Breweries Plc is a public limited liability company Incorporated in 1971 and listed on The Nigerian Stock Exchange in 1995. The company’s principal activities are the manufacture, distribution and sale of a variety of alcoholic and non-alcoholic beverages. The company’s brewery Is situated in Ilesa, OsUn State.
About-Intafact Beverages Limited
Intafact Beverages Limited is a private limited liability company incorporated in February 2007. The company’s principal activities are the manufacture, distribution and sale of a variety of alcoholic and non-alcoholic beverages. The company’s brewery is situated in Onitsha, Anambra State.
About Pabod Breweries Limited
Pabod ‘Breweries Limited is a private limited liability company Incorporated in 1978. The company’s principal activities are the manufacture, distribution and sale of a variety of alcoholic and non-alcoholic beverages. The company’s brewery 15 situated In Oginigba, Port Harcourt, Rivers State.