Delta Corporation is set to acquire a majority stake in National Brewery Zambia (Natbrew) in order to boost its multi-beverage strategy. Natbrew, which is listed on the Zambia Stock Exchange is the leading sorghum (opaque) beer producer in Zambia whose products are marketed under the Chibuku brand. Delta Corporation is involved, through its principal subsidiary Delta Beverages, in the brewing of lager and traditional beer and the bottling of soft drinks under licence from the Coca Cola Company. It operates one of the largest distribution network of depots and delivery fleets in Zimbabwe.
In a press release, Delta Corporation said it was finalising a transaction to acquire a controlling stake in the company from Heinrich’s Syndicate, a subsidiary of Delta’s parent Anheuser-Busch Inbev SA/NV (AB Inbev). Heinrich’s Syndicate holds a 70 percent stake in the company
“The board is optimistic that the company will leverage on its 60 years’ experience in the sorghum beer sector. This investment opportunity fits well with the company’s multi-beverage strategy,” said Delta.
The group said the full impact of the transaction is currently being determined but would not be material to Delta.
In a cautionary update in Zambia, Natbrew said that the transaction is expected to close by the fourth quarter of 2017, subject to applicable regulatory clearance and satisfaction of other customary closing conditions.
The announcement comes as South African Breweries and AB Inbev marked one year since the two global brewers combined their businesses.
Analysts believe that Delta’s move to acquire the stake in Natbrew could be AB Inbev’s way of consolidating regional operations but giving the Zimbabwean unit a much wider market in terms of sorghum beer production.
Delta has over the past years invested significantly in sorghum beer production after lager volumes were falling as consumers, hit hard by the economic situation in the country, traded down.
However over the last two quarters, lagers have staged a recovery driven largely by improved incomes in the agriculture and small scale mining sectors.
Natbrew is currently trading at ZK13 on LuSE with a market capitalisation of ZK819 million