Sapa
Diageo, Heineken and Namibia Breweries have agreed to form a new joint venture for their combined beer, cider and beverage businesses in South Africa, the three companies announced.
The venture would be called DHN Drinks and would build on the success of Brandhouse Beverages, their current cost-sharing joint venture formed in July 2004.
Diageo and Heineken would each own 42.25 percent of DHN and Nambia Breweries would own 15.5 percent, the companies said in a statement.
They would share profits in proportion to their shareholding.
Brandhouse would continue to market and distribute the their products in South Africa.
In addition, Diageo and Heineken would enter into a second new South African joint venture called Supplyco, with Heineken holding a majority 75 percent.
"Supplyco will construct a brewery and bottling plant in Gauteng province and will produce Amstel and certain other key brands," the statement said.
In the first two years Diageo would invest UK 100 million in DHN Drinks and Supplyco.
The transaction, which was subject to regulatory approval, was expected to be completed on March 31 this year.
Nick Blazquez, managing director of Diageo Africa, said the three companies had already shown that a combined beverage alcohol distribution company could capitalise on growth opportunities in markets such as South Africa.
The new structure would enable them "to realise further growth opportunities as a result of the strong platform we will create together".
