By Jan-Hendrik Conradie
Namibia Breweries has withdrawn their cautionary announcement with regards to discussions on a proposed transaction which involved a restructuring of the existing arrangements between Diageo, Heineken and Namibia Breweries in South Africa (DHN Drinks). Through this transaction, DHN Drinks intended to acquire 100% of the issued share capital of Sedibeng Brewery. However, negotiations have been terminated and therefore DHN will no longer require shareholder funding for this proposed transaction and simultaneously, Namibia Breweries will not need to raise any additional financing to fund the proposed acquisition. Although this deal had the potential to unlock significant value, we feel that it would have been to the detriment of free cash flows and ultimately led to shareholder dilution.