The Public Investment Corporation (PIC) has announced that it will acquire 26.4% of the ordinary shares of Distell Group, a South African producer and marketer of ciders, ready-to-drink beverages, spirits and fine wines. 

The acquisition is subject to approvals by the Competition Commission.

The Distell shares became available as a result of the merger between SABMiller and AB InBev. 

At the time of approving the merger between AB InBev and SABMiller, the Competition Tribunal laid down a list of merger conditions. 

One such condition was a requirement for the merged entity to divest of its 26.4% stake in Distell to one or more purchasers approved by the Competition Commission or the existing shareholders of Distell who may exercise their pre-emptive rights to acquire the Distell shareholding. 

Two of Distell shareholders, Remgro and Capevin Holdings Limited, held pre-emptive rights to purchase these shares in Distell.

Remgro and Capevin Holdings Limited have elected not to exercise their pre-emptive rights, making available 26.4% of Distell’s shares. 

“PIC’s clients stand to benefit from exposure to Distell, whose share price is attractive relative to its fair value as well as the fact that the company has shown consistent growth and continues to implement its international expansion strategy to other countries, including the US and China,” said PIC in a statement.

The Public Investment Corporation is a public asset management firm wholly owned by the South African government, with the Minister of Finance as the sole shareholder representative of the government. 

PIC’s clients are mostly public sector entities including the Government Employees Pension Fund, which contribute 90% of the funds that PIC manages.

Other clients include Unemployment Insurance Fund, Associated Institutions Pension Fund, Compensation Commissioner Pension Fund and Compensation Commissioner Fund.