SHAREHOLDERS of Consolidated Breweries Plc have approved the merger scheme of Benue Brewery Limited and DIL/Maltex Nigeria Plc to enhance operational efficiency, expand growth and maximise value for stakeholders.
The shareholders’ approval was obtained at a court-ordered extra-ordinary meeting of Consolidated Breweries in Lagos, over the weekend.
The Chairman of the company, Prof Mrs. Oyinade Odutola-Olurin explained that prior to the court-ordered meeting, DIL/Maltex and Benue Brewery were subsidiaries of Consolidated Breweries Plc and engaged in the same line of business as Consolidated Breweries.
She however, added that Consolidated Breweries owned 97.83 per cent of the equity in DIL/Maltex and 100 per cent of the equity in Benue Brewery.
According to her, the primary objective of the mergers was to streamline the management and its corporate governance, in line with the operations of Consolidated Breweries and its subsidiaries.
Odutola-Olurin stressed that “the merger would lead to administrative efficiencies, cost reductions and operational synergies; and be beneficial to all stakeholders of Consolidated Breweries’’
She further explained that the post-merger entity would capture positive economy of scale and achieve significant synergies through enhanced operational and administrative efficiencies, a streamlined supply chain, and a unified service delivery platform.
The Chairman of DIL/Maltex Nigeria Plc, Chief Samuel Bolarinde and his Benue Brewery counterpart, Steven Ameh, at separate meetings noted that the merger schemes would provide an opportunity for Consolidated Breweries to better utilize its assets and further streamline its operations.
The combination of the assets of Consolidated Breweries and DIL/Maltex and Benue Brewery, the duo pointed out, was expected to increase Consolidated Breweries’ manufacturing capacity while streamlining overlapping costs, resulting in increased earnings.
“Significant operational synergies will be generated from the optimization of key operations, particularly the manufacturing, overall management, administration and accounting functions’’, said Steven Ameh, stressing that the merger would therefore result in improved returns to the shareholders and employees while customers would also benefit from access to a wider operational platform.
Under the terms of the two separate schemes of merger, all the assets, liabilities and undertakings of both DIL/Maltex and Benue Brewery including real property and intellectual property rights, were transferred to Consolidated Breweries. The entire share capital of DIL/Maltex comprising 350,000 ordinary shares of N1.00 each were cancelled; and DIL/Maltex stands dissolved without being wound up.
In consideration for the transfer of all the assets, liabilities and undertakings of DIL/Maltex to Consolidated Breweries, it was approved that each DIL/Maltex shareholder would receive one ordinary share of Consolidated Breweries, credited as fully paid-up in exchange for 20 ordinary shares held in DIL/Maltex as at the terminal date.
The same propositions apply to Benue Brewery while the entire capital of the company comprising 500,000,000 ordinary shares of N1.00 each were cancelled and Benue Brewery stands dissolved without being wound up. However, there was no consideration to Benue Brewery shareholders for the cancellation of shares held in Benue Brewery, because Benue Brewery was a wholly-owned subsidiary of Consolidated Breweries.
On post scheme dividends and other rights, the scheme shares to be issued to DIL/Maltex shareholders shall, upon the DIL/Maltex effective date, rank pari-passu in all respects and shall form a single class of shares with the existing ordinary shares in the share capital of Consolidated Breweries, Accordingly, DIL/Maltex shareholders shall be entitled to any dividend, bonus issues, and other distributions/rights made by Consolidated Breweries to holders of its fully paid ordinary shares.
Consolidated Breweries had concluded the acquisition of a 95.05 per cent equity stake in DIL/Maltex in 2009.
The acquisition allowed Consolidated Breweries to achieve a modest increase in its market share in the Nigerian non-alcoholic beverage market. By the end of 2011, further acquisitions had increased Consolidated Breweries; equity stake in DIL/Maltex to 97.83 per cent.