Heineken NV of the Netherlands on Tuesday restated its commitment to the proposed merger between Nigerian Breweries (NB) Plc and Consolidated Breweries (CB) Plc.
The foreign core investor in both companies said in a statement made available to the News Agency of Nigeria (NAN) in Lagos that the re-assurance became imperative in spite of their decision to abstain from voting in the Dec. 4, 2014, scheduled separate court-ordered meetings of both companies.
According to the Amsterdam, Netherlands-based international brewer, the business combination of NB Plc and CB Plc would on consummation, unify, strengthen and make the operations of the company cost effective.
Heineken said that the proposed consolidation of the operations of NB and CB, “is based on a significant and compelling strategic rationale.
They said that in addition to efficient operations, the proposed merger would allow Heineken to tap growth in Nigeria, sub-Saharan Africa’s second-largest beer market.
According to some analysts, the merger would broaden the company’s product offerings through enriched premium, mainstream and value segment products portfolio.
The General Secretary of the Independent Shareholders Association of Nigeria (ISAN), Mr Adebayo Adeleke, said that investors were happy about the merger because of the enhanced return on investments the synergy would create.
Adeleke said contrary to other opinions, the merger would also lead to operational efficiency, human capital development and optimal utilisation of resources.
“By distributing the enlarged product portfolio through the combined network of the two companies, considerable costs savings are expected from distribution,” he said.
Adeleke also identified other areas of maximizing costs as operational efficiency in procurement, supply chain management and critical support services.
He said that the anticipated value creation of a new NB would lead to reduction in overall costs-income ratio, enhanced profit margins and increased returns on investments for shareholders.
The ISAN secretary said that the business combination of BN and CB would stimulate higher liquidity, post consolidation, for shareholders of the new company.
NAN reports that the scheme of the merger provides for the issuance of 396,857,294 ordinary shares of 50k each by Nigerian Breweries, in exchange for the existing 496,071,617 ordinary shares of Consolidated Breweries, at a ratio of four new shares for every five held.
A further analysis of the scheme of arrangements showed that Consolidated Breweries shareholders technically were offered a subtle premium in the business combination.
Some analysts said that post-consolidation of the operations of the two companies, Nigerian Breweries market capitalization would increase following the appreciation of its shares to about 7,960 million.
NAN also recalls that before the proposed merger, Heineken NV held a 54.10 per cent stake in NB and 53.80 per cent in CB.S
NB’s current product profile includes Heineken, Star, Gulder, Maltina, Amstel Malta and Goldberg, while CB produces “33” Export Lager beer, Maltex, Williams and Turbo King Dark Ale, amongst others.
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