Commercial Spirits Intelligence No.25
What next for Distell's Scotch Whisky assets?
As people who have worked in and around the spirits industry for many years, we found that there was a lack of good, public, research on the trends in the spirits industry. Whether it’s trends in wood, or distillery capacity, or M&A activity - many of the existing research providers speak to a specific niche when we wanted a whole-market analysis. In this newsletter we leverage our experience, contacts and market intel to provide meaningful analysis that speaks to relevant issues for you. This newsletter is a collaboration between Duncan McFadzean of Noble & Co, and Martin Purvis. If you find this newsletter valuable, and would like access to the archive of posts, please consider a paid subscription.
This week’s full newsletter is only available to our paying subscribers. We carry out an analysis on the Distell assets where we look at ownership, brands, production and sales as well as the P&L.
A southern Africa cocktail
In April 2023, Heineken and South African based Remgro (an investment company) completed a series of transactions that allowed Distell to merge with Heineken Beverages, creating a southern Africa drinks powerhouse. From a Scotch perspective, all eyes were on the ex Burns Stewart assets – Tobermory, Deanston & Bunnahabhain. What has happened to the ownership since?
As of June 2023, Remgro disclosed that the Scotch whisky assets remained in a distinct subsidiary – Capevin. This was previously owned by Distell and many of the shares in Capevin were acquired into Heineken Beverages in exchange for cash or shares. The latest set of results from Remgro in June 2023 disclosed that its economic ownership of Capevin is 31.4% but a voting interest of 55.9%.
A cocktail where Heineken didn’t want any Scotch whisky in it
What happened in the acquisition? There was a combination of 59.37% of Namibia Breweries Limited, Heineken South African Export Company Proprietary Limited (yes, we can see why that was abbreviated to HSAEC in the prospectus also), Heineken SA and (importantly) the Distell ‘in-scope’ assets.
Distell split itself into two businesses – the one holding Cider, RTD beverages, Wine and Spirits businesses, and then the one holding Scotch Whisky assets and Gordon’s Gin operations (Black Bottle, Bunnahabhain, Burn McKenzie, Deanston, Gordons Gin, Scottish Leader, and Tobermory). The in-scope assets were acquired as part of the offer, the out-of-scope assets were then given a separate offer “The Capevin offer”, which allowed Remgro to exit part of the Distell business and retain a material economic interest and a voting majority position in the other part of the Distell business.