Heineken extends Nigeria’s market share with new 1.9bn units of Champion Breweries

Heineken B.V., the Dutch brewer, has purchased another 1.9 billion ordinary shares of Champion Breweries located in Uyo, Akwa Ibom state.

Heineken through its subsidiary, Raysun Nigeria Limited, purchased the new shares at N2.60 per unit at a total of N4.95 billion on January 7.

With this share acquisition, Heineken now has a total of 84.7 percent in Champion Breweries, a move to further expand its control of the Nigerian Beer market and put it in a strong position as the majority shareholder to make a takeover attempt.

Heineken currently has another 37.94 percent stake in Nigerian Breweries, Nigeria’s largest brewer by market size and the most capitalised beer maker in the country.

Asset Management Nominee and Akwa Ibom Investment Corporation, which held 12.3 per cent and 10 per cent holdings respectively in the company prior to Heineken’s latest round of share purchase, were the other substantial shareholders in Champion Breweries.

Champion Breweries started bottling beer in 1976, with an initial capacity of 150,000 hectolitres of beer and 10,000 hectolitres of malt drink.

Shares of Champion Breweries closed on the Nigerian Stock Exchange on Monday at N1.48 per share, gaining almost the 10 per cent daily ceiling allowed by the bourse.

The stock has appreciated by 58.82 per cent since Heineken’s latest share acquisition on January 7, 2020.

Squeezed between the three giants

Operating with two products distributed in few regions of the country has left Champion Breweries squeezed by other brewing giants.

Competitors such as International Breweries; Nigerian Breweries and Guinness are either expanding their production capacity or introducing new brands.

Nigerian Breweries Plc has acquired breweries across the country and recently commissioned N5.1 billion ultra-modern automated PET bottling line in Ijebu-Ode, Ogun state.

The company acquired a controlling interest in Sona Group in January 2011 and also merged with Consolidated Breweries Plc, thereby adding to its three breweries in Ijebu-Ode, Awo-Omama, and Makurdi to the Nigerian Breweries.

In 2017, AB InBev acquired 72.17 per cent of SABMiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB InBev acquiring controlling interests in the company.

After the acquisition, a merger arrangement was later consummated with International Breweries Plc and two other local brewers: Intafact Beverages Limited, makers of Hero beer which is popular in the South-Eastern part of Nigeria, located in Onitsha Anambra State, and Pabod Breweries Limited, makers of Grand Lager, located in Port-Harcourt. All are now controlled by AB InBev.

Diageo-owned Guinness has also added to its product line with the addition of more spirit brands into the market.