Diageo, Heineken deals going ahead

Johannesburg - Proposed transactions involving Diageo SA, Heineken International, Namibia Breweries and Brandhouse Beverages, DHN Drinks and Sedibeng Brewery have been provisionally approved by the Competition Tribunal on Monday.

The proposed transactions contemplate the restructuring of the existing joint venture arrangements between Diageo, Heineken and NBL in South Africa.

Diageo will aqcuire sole control over Brandhouse by increasing its 50% shareholding to 100%, while Heineken and NBL will acquire Diageo's 42.25% equity interest in DHN. DHN would then be jointly controlled by Heineken and NBL.

The merging parties submitted that the respective businesses of Diageo, Heineken and NBL have grown to a sufficient scale and no longer require a cost-sharing arrangement between all the parties.

The Tribunal concluded that the proposed transactions are unlikely to substantially prevent or lessen competition in any relevant market.

It did point out, however, that the proposed transactions raise significant employment concerns. Therefore, the Tribunal approved the transactions subject to certain employment-related conditions.