Shares in South African alcoholic beverages maker Distell climbed sharply on Tuesday after it announced it was in talks with Heineken about a possible sale.
Heineken confirmed that “discussions were ongoing”, but that there was no certainty an agreement would be reached.
The announcement said that Heineken had approached Distell regarding the potential acquisition of “the majority” of the South African company's business.
Distell's market capitalisation was nearly SAR32bn ( £1.6bn, $2.3bn) at the close of trade on the Johannesburg Stock Exchange (JSE) on Monday.
The majority of the shares in Distell are owned by Remgro-Capevin Investments – the ninth biggest publicly-traded company in South Africa.
Indeed, Remgro made its own statement to the JSE on Tuesday, ensuring its shareholders were “made aware of potential material developments in relation to the company's subsidiary Distell”.
Distell's brands include Hunter's Dry and Savanna ciders, Two Oceans and Durbanville Hills wines, and Knights and Bain's whiskies. In its last full-year statement the company reported a 3.8% rise in revenues to SAR15.3bn and an operating profit of SAR2.1bn.
A deal between the two companies would create a cider-producing behemoth, as Distell is the second-biggest maker of cider in the world by volume. Heineken is the biggest largest through its Strongbow and Bulmers brands.
It would be the first major acquisition by chief executive Dolf van den Brink, who took over at Heineken in June 2020 and announced a cost-saving plan in February at the expense of 8,000 jobs.
Shares in Distell were up 2.5% at SAR14,658 on the JSE, while Remgro was up 5.4% at SAR11,434. Heineken shares were up 0.3% at €99.02 on the Amsterdam bourse.