Zambia: Delta Corporation completes acquisition of controlling stake in National Breweries
Delta Corporation says it has completed the acquisition of a controlling stake in Lusaka Stock Exchange-listed beer company, National Breweries PLC (Natbrew). Ronny Palale, a chartered accountant with vast experience in the beverages manufacturing industry, will lead the Zambian outfit, businessdigest reported on January 25.
Last year, Delta announced it was set to complete the acquisition of a controlling stake in Natbrew of Zambia from its parent company Anheusur-Busch InBev SA/NV (AB InBev), subject to regulatory approvals during this year’s Q1.
Delta reportedly snapped up an estimated 44,1 million shares from AB InBev SA/NV to acquire a controlling stake in Natbrew at an estimated cost of US$12 298 639,32, with a single share going for approximately US$,028.
Acquiring a controlling stake in Natbrew is part of Delta’s long-term strategy to boost its diversified beverages business by making forays into the regional market. Natbrew, which markets its products under the Chibuku brand, is the leading opaque beer manufacturer in Zambia.
Through correspondence in possession of businessdigest, Delta Corporation operations director Etherton Mpisaunga notified local staff that the acquisition of the Zambian brewery had been finalised and Palale, who will spearhead growth of the outfit, would still “report” to him.
Prior to assuming his new position as managing director of Natbrew, Palale rose through the company ranks — serving as operations director, before his latest assignment.
“You will have seen the recent announcement with respect to the acquisition by Delta Corporation Ltd of a controlling interest in National Breweries PLC. Further to this announcement, I wish to advise that Mr Ronney Palale has been appointed managing director of the business, effective 1 January 2018 and will report to me. Ronny is a chartered accountant with wide and varied experience, who, on leaving the experience, joined SABMiller in 2004 as an executive assistant to the managing director of National Breweries PLC-Zambia,” wrote Mpisaunga, noting that “further appointments” at the now Delta-controlled Natbrew would be “announced in due course”.
Last year, as Delta angled to acquire Natbrew, it kept a lid on the finer details of the transaction — estimated to be running into several millions of dollars.
Sources, who spoke on condition of anonymity, told businessdigest that staff from Delta’s various beverage business units were being deployed to Zambia to assist and oversee the smooth transition of operations at the Zambian brewery.
The source said among the staff relocated to Zambia were workshop artisans and electricians, to facilitate the smooth running of operations at the Zambia brewery.
In a trading update this month, for the last three months and nine months to December 31, 2017, Delta said lager beer recorded a spike in demand, with the volume growing by 36% above prior year for the quarter and 20% for the nine months. The company’s revenue jumped 24% for the quarter to December 31, 2017 and 9% for the nine months due to strong demand on renewed hope of economic recovery after political changes that occurred in November last year, which led to the resignation of the country’s former president Robert Mugabe.
In the half year to September 30, 2017, Delta’s profit after tax rose 4% to US$32 million compared to US$30 million achieved in the same period previous year, propelled by strong performances from associate companies.
Profit from associate business units increased by 355% to US$1,6 million from US$351 000 in the same period last year, driven by positive performance from both Afdis and Schweppes, which recorded revenue and volume growth in the period.
Figures released late last year by the beverages manufacturer indicate that lager beer volumes increased by 11% to 676 hectolitres, while gross sales increased by 9% to US$119 million, with volume mix in favour of value packs and brands.
26 January, 2018
