Business Reporter
THE Namibian Competition Commission at its meeting held on the 5th of September 2022 resolved to approve the acquisition of NBL Investment Holdings (Pty) Ltd and Distell Group Holdings Limited by Heineken International BV (Heineken BV) with conditions.
The transaction entails Heineken BV increasing its shareholding in NBL Investment Holdings (Pty) Ltd and thereby acquiring control over NBL Investment Holdings (Pty) Ltd, which is the holding company of Namibia Breweries Ltd (NBL).
The transaction further entails Heineken BV through NBL acquiring Distell Namibia Ltd, a subsidiary of the Distell Group Holdings Ltd.
NBL is involved in the production, marketing, distribution, and supplies a range of beers. Furthermore, NBL supplies certain Heineken brands, specifically: Heineken Pure Malt Larger and Strongbow cider.
Heineken is the second biggest beer producer in the world and is active in the production, marketing and distribution of beer and another beverage.
Dina //Gowases, spokesperson of the competition commission noted that due to the similarity in the operations of the merged entity, the merger may result in a duplication of functions and positions, and as such the Commission imposed a moratorium on retrenchments by way of an employment condition.
The condition states that, following implementation, there shall be no retrenchments of employees below management level of the Merged Entity in Namibia as a result of the merger for a period of five (5) years.
She also stated that during its analysis, the Commission identified entry barriers as a concern, particularity the ability of small Namibian companies to enter the market.
“NBLs’ Commercial Policy prohibited retailers placing other products being placed in NBL branded refrigerators. The Commission further noted that due to the market share and/or market power that the Merged Entity will possess post-merger, a likelihood of this policy being enforced will likely deter or limit entry of Namibian-owned and Namibian-controlled undertakings in the market. As a result of these concerns the Commission imposed a condition on access to Chilled Space/refrigerators.
The condition state that the Merged Entity shall ensure that retailers shall be free to allocate up to 10% of Chilled Space/refrigerators in each beverage cooler owned by NBL or Distell Namibia in any on and off-consumption Outlet in Namibia,” //Gowases clarified.
She added that this allocation right shall apply only to products manufactured or packaged in Namibia by Namibian-owned and Namibian-controlled companies.
The existing NBL Commercial Policy, must be amended, and Merged Entity shall educate its employees and inform the market of the new changes to its Commercial Policy.
//Gowases also added thatthe Commission was concerned that the Merged Entity might source products or services abroad (i.e., import substitution). To ensure that local sourcing continues post-merger, the Commission imposed the following conditions: The Merged Entity in respect of Input Products sourced locally pre-merger and having regard to existing agreements shall continue sourcing the referenced Input Products locally.
The Merged Entity shall continue sourcing services procured from Namibian owned undertakings.
