HARARE-Delta Beverages has announced the acquisition of a controlling stake in Zambian listed brewer National Breweries. In a press release on Thursday Delta, which is coming from releasing an encouraging second-quarter trading update, said it is finalising a transaction to acquire a controlling stake in National Breweries which is a Lusaka Stock Exchange-listed beer making company. NatBrew is the leading sorghum beer producer in Zambia whose products are marketed under the Chibuku brand and these being Chibuku Super, Chibuku Shake Shake, pasturised TAB with a longer shelf life. The stake snapped by Delta is being acquired from Heinrich’s Syndicate, a subsidiary of Anheuser-Busch InBev SA/NV (AB InBev). On 16 May Natbrew issued a cautionary note that AB InBev was undertaking a review of its strategic options relating to its investment in the Company. On its part Delta became part of AB InBev after the later merged with SAB Miller in a $101 billion dollar merger deal in 2016, making the Natbrew deal a related party one. Up to the consummation of the AB InBev and SAB Miller deal Delta was 38% owned by SAB Miller, then the world’s second-largest brewer. In Natbrew, AB InBev was controlling 70% of the company’s issued shares an equivalent of 44,100,000 shares. The company has a market value of ZMK 819 million having last traded at price of 13c. Delta, which is valued at $3.5 billion on the ZSE, said the impact of the transaction is currently being determined, but that it was not material. The transaction is also subject to various regulatory approvals and is expected to close by the fourth quarter of 2017 subject to applicable regulatory clearances. Delta’s management is familiar with the Zambian territory where the CEO Pearson Gowero was previously seconded to by SAB Miller, to head another leading beer making company Zambrew in 2006, spending the next 5 years in that market. The new acquisition in Natbrew fits comfortably into Delta’s existing portfolio which has seen increased exposure to traditional beer through the introduction of a new brand and capital investments in new Chibuku Super Plants. The segment is now the highest contributor to operating income although in the recent quarter performance tapered off due to cash challenges in Zimbabwe. In 2017 Natbrew reported a slowdown in performance as revenue came off by 22% to ZMK355.3 million while reporting an operating loss of ZMK-28.70 million. This was the first time in 5 years that the company had reported a loss. The company said it faced immense competition from grey imports while inflationary pressures also choked into margins. Natbrew took a strategic review of its business and has since closed a number of its depots and breweries in order to create a leaner and efficient structure. Over the next 12 months AB InBev is likely to increase the pace at which it restructures the group post the 2016 deal. Quite a number of strategic reviews with significant and material impact to operating units are expected and against this background, Delta is trading under caution.