NB secures full ownership of DWSN to strengthen expansion

…Shareholders urge effective management of FX risk amid acquisition
Nigerian Breweries Plc (NB) has completed the acquisition of the remaining 20 per cent minority stake in Distell Wines and Spirits Nigeria Limited (DWSN), sealing its full ownership of the company.

This strategic move, executed through a sale and purchase agreement with minority shareholders — Ekulo International Limited and Next International Nigeria Limited — marks a significant milestone in Nigerian Breweries’ efforts to diversify beyond its core beer business.

The acquisition follows Nigerian Breweries’ initial purchase of an 80 per cent majority stake in DWSN in June 2024.

By securing complete control, the company aims to enhance operational efficiency, streamline decision-making, and reinforce its presence in Nigeria’s growing wines, spirits, and ready-to-drink (RTD) market.

In a notice to the Nigerian Exchange Limited (NGX), Nigerian Breweries emphasized that full ownership would allow it to integrate DWSN’s operations seamlessly into its existing structure.

A key part of this integration involves relocating DWSN’s production activities from a previously rented facility to Nigerian Breweries’ premises.

The company believes this transition will reduce costs, optimise production processes, and improve the overall competitiveness of its beverage portfolio.

Beyond operational efficiencies, Nigerian Breweries sees this acquisition as a crucial step in expanding its product offerings to cater to shifting consumer preferences.

DWSN is known for its popular locally produced brands such as Chamdor, 4th Street, Hunters Dry, and Savanna, while Nigerian Breweries also distributes a range of imported premium wines and spirits, including Amarula Cream Liqueur, Drosty Hoff, Nederburg wines, and Bain’s whisky.

With the Nigerian alcoholic beverage market witnessing increased demand for premium and diverse offerings, Nigerian Breweries’ full takeover of DWSN aligns with its long-term growth strategy.

The company aims to leverage its expanded portfolio and production capabilities to strengthen its market position, drive revenue growth, and establish itself as a dominant player in Nigeria’s broader alcoholic beverages industry.

As competition intensifies in the sector, this acquisition underscores Nigerian Breweries’ commitment to innovation, efficiency, and meeting the evolving tastes of Nigerian consumers.

The move signals a broader shift in strategy, positioning the company for sustained growth beyond its traditional beer segment.

Shareholders see Nigerian Breweries Plc’s full acquisition of Distell Wines and Spirits Nigeria Limited (DWSN) as a strategic leap toward diversification and a stronger foothold in Nigeria’s alcoholic beverage market.

According to them, Nigerian Breweries seeks to simplify operations, eliminate complexities, and enhance decision-making, reinforcing its expansion beyond the beer industry by assuming full control.

President of the NewDimension Shareholders Association of Nigeria, Patrick Ajudua commended Nigerian Breweries Plc for its full acquisition of Distell Wines & Spirits Nigeria Limited (DWSN), describing it a strategic move that will strengthen the company’s market position.

He noted that securing full ownership would enhance NB’s earnings, consolidate its financial achievements, and intensify competition in the alcoholic beverage sector.

Ajudua also emphasised that the acquisition aligns with the company’s broader diversification strategy, expanding its reach beyond the beer segment into the growing wines and spirits market.

However, Ajudua cautioned that while this move presents significant growth opportunities, the firm must remain vigilant about foreign exchange risks.

In addition, he pointed out that many of the materials required for production are imported, making the company vulnerable to fluctuations in exchange rates.

To sustain profitability, he urged the company to adopt proactive strategies to manage foreign exchange (FX) exposure and mitigate potential financial losses.

Overall, the move signals Nigerian Breweries’ commitment to innovation and adaptability in a highly competitive sector.

By expanding its beverage range and refining its operations, the company is set to meet the evolving demands of Nigerian consumers while driving sustained growth in the market.