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Distell further ramps up African investment

Stellenbosch - Distell continues to ramp up its investment on the African continent with the acquisition of a further 26.43% in KWA Holding East Africa (KWAL) - Kenya’s foremost spirits, wine and ready-to-drink manufacturer and distributor - from Centum Investment Company.

Distell effectively now owns a majority shareholding of 52.43%, having previously acquired a 26% stake from Industrial and Commercial Development Corporation (ICDC) in 2014 through a Kenya government privatisation process.

KWAL sold more than 8 million litres of alcoholic beverages in 2016 and owns a portfolio of leading local brands such as Kibao, Kingfisher and Caprice which have shown strong growth in recent years.

Distell said the deal increases its exposure to Kenya’s highly attractive economy and alcoholic beverage industry.

“With a population of over 47 million people, Kenya is expected to be one of the fastest growing economies in Africa, driven by rapid urbanisation and strong income per capita growth across major cities over the next decade. Spirits has been the fastest growing segment of Kenya’s alcoholic beverage industry and growth is anticipated to remain robust going forward,” said Donovan Hegland, Distell Africa, managing director.

“Distell’s strategy is to expand geographically through acquisitions of and/or partnerships with regional scale players who have leading brands, rich heritage, and strong platforms in their core markets. We believe the strength of KWAL’s platform and key brands align with Distell’s strategic intent.”

Carlos Gomes, KWAL’s managing director, welcomed the transaction, saying KWAL and Distell management will continue to work closely together, as they have done since 2014, to identify and unlock further opportunities for collaboration and synergies. This will provide the platform for sustained growth and further cement KWAL’s position as Kenya’s national champion.

Distell's relationship with Nairobi-based KWAL dates back to 1998 when KWAL started distributing a selection of Distell’s brands, including Viceroy, Amarula, Drostdy-Hof and Cellar Cask.

Hegland said Distell would now forge ahead with growing the potential of the business and seek to expand local skills and build on the brand platforms that are already established in Kenya. This would be done through working closely with various stakeholders.

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