Remgro shareholders are referred to the joint Distell and Heineken announcement
(Incorporated in the Republic of South Africa)
(Registration number 1968/006415/06)
(Share code: REM)
(“Remgro” or “the Company”)
PROPOSED SCHEME OF ARRANGEMENT IN RESPECT OF DISTELL GROUP HOLDINGS
LIMITED ("DISTELL") AND RELATED TRANSACTIONS PROPOSED BY HEINEKE N
INTERNATIONAL B.V. ("HEINEKEN")
Remgro shareholders are ref erred to the detailed joint firm intention announcement (the "Firm
Intention Announcement") by Distell and Heineken, released on the Stock Exchange News
Service ("SENS") of the securities exchange operated by JSE Limited (the " JSE") today,
15 November 2021, setting out the terms of a proposed scheme of arrangement in terms of section
114 of the Companies Act, 2008 between Distell and its shareholders (the "Scheme") and related
transactions (the "Proposed Transaction").
The purpose of this voluntary announcement is to disclose the expected effect of the Proposed
Transaction on Remgro.
2. Expected effect of the Proposed Transaction on Remgro
As referred to in more detail in the Firm Intention Announcement :
• the Proposed Transaction will result in the combination of the Heineken Southern African
business, including an interest in Namibia Breweries Limited ("NBL"), with the bulk of the Distell
business (consisting of its cider, other ready-to-drink beverages and spirits and wine business)
in a new unlisted entity controlled by Heineken and ref erred to as Newco , thereby creating a
world-class, Southern-African focussed, alcoholic beverages entity with a leading beer and
cider portfolio, combining the complimentary brands, talent and skills of Distell, Heineken and
NBL to better serve consumers across the region. The entity will also have a significant
presence in adjacent African markets;
• the Proposed Transaction will include a proposed unbundling by Distell, to existing Distell
shareholders, of the unlisted shares in Distell's subsidiary, Capevin Holdings Proprietary
Limited ("Capevin"), which holds Distell's remaining assets, including its Scotch whisky
business (the "Capevin Unbundling"); and
• the Proposed Transaction will also include –
o an offer by Newco to Distell shareholders to acquire their Distell shares, for a cash
consideration of R165 per share and /or unlisted shares in Newco, or a combination
thereof , as set out in more detail in the Firm Intention Announcement; and
o an offer by Heineken to Distell shareholders to acquire the Capevin shares that Distell
shareholders will receive pursuant to the Capevin Unbundling, for a cash consideration
of R15 per Capevin share.
Remgro recognises the long-term strategic benefit of combining the relevant Distell and Heineken
businesses and is supportive of the Proposed Transaction. Accordingly, and as ref erred to in the
Firm Intention Announcement, Remgro has provided an irrevocable undertaking to vote its Distell
shares in favour of the Scheme.
Remgro intends to elect to receive Newco shares for its Distell shares in terms of the Scheme
consideration and is accordingly expected to be a significant shareholder in Newco.
Remgro does not intend to accept the cash offer to be made by Heineken for the Capevin shares
that it will receive pursuant to the Capevin Unbundling. It is therefore expected that Remgro will
have a controlling shareholding in Capevin which mirrors its current controlling shareholding in
3. Value of the net assets and profits attributable to the net assets
As at 30 June 2021 (Distell’s last audited results, which were prepared in terms of International
Financial Reporting Standards – “IFRS”), the net asset value of Distell (excluding non-controlling
interests) amounted to R13.1 billion. The earnings and headline earnings of Distell and its
operations, for the year ended 30 June 2021, were prof its of R1.9 billion and R1.7 billion,
As at 30 June 2021 (Remgro’s last reported IFRS results), the market value and accounting net
asset value of Remgro’s holding in Distell amounted to R11.7 billion (representing 11.6% of
Remgro’s intrinsic net asset value) and R7.6 billion (representing 8.6% of Remgro’s net asset
value), respectively. The earnings and headline earnings of Remgro, for the year ended
30 June 2021, attributable to Distell and its operations were prof its of R616 million and
R538 million, respectively. In terms of IFRS, Remgro accounts for its 31.7% economic interest in
Distell (representing 31.3% of Distell’s listed issued ordinary shares) as a subsidiary, due to the fact
that Remgro also holds 124.2 million unlisted, voting only B-shares in Distell, resulting in a voting
interest of 56.4%.
On implementation of the Proposed Transaction, Remgro's economic interest in Distell is expected
to be replaced by economic interests in Newco and Capevin, in line with Remgro's intention, as
disclosed in paragraph 2 above, to accept shares in Newco as consideration for its Distell shares
and not to accept the cash offer for its Capevin shares.
4. Conditions precedent to the Proposed Transaction
The implementation of the Proposed Transaction is subject to various conditions precedent set out
in detail in the Firm Intention Announcement and which include:
• the approval by Distell shareholders of the Scheme and the Capevin Unbundling;
• the approval by shareholders of NBL of those components of the Proposed Transaction which
require their approval; and
• the approval of all other relevant authorities, including the South African Reserve Bank and the
competition authorities in various jurisdictions .
15 November 2021
Rand Merchant Bank (A division of FirstRand Bank Limited)
HSBC Bank plc
Cliffe Dekker Hofmeyr Inc.
Date: 15-11-2021 08:50:00
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