Nampak sells Bevcan Nigeria to Alucan Investment for US$68.5M

NIGERIA – South African packaging giant Nampak has finalized the sale of its Nigerian subsidiary, Bevcan Nigeria, to Singapore-based Alucan Investment for US$68.5 million. 

The move comes as part of the company’s ongoing restructuring efforts aimed at reducing debt and refocusing on core operations.

The transaction, which followed regulatory approvals from Nigeria’s Federal Competition and Consumer Protection Commission, was completed after a six-month process. 

Nampak has confirmed that it expects to receive an initial payment of US$58.2 million by January 31, with a further US$10 million due by February 7.

Shares in Nampak surged by 7.3% on the Johannesburg Stock Exchange (JSE) following the announcement. 

By late Friday afternoon, the company’s stock was trading at US$24.01 (R453.43), marking a 145% increase from US$9.80 (R185) a year earlier. The sale is expected to improve Nampak’s financial position by reducing debt and mitigating risk exposure.

Ongoing asset disposals

The Bevcan Nigeria sale follows another key disposal by Nampak in November 2024, when the company sold its Industrial & Commercial Solutions (I&CS) business for US$8.1 million (R142.5 million). 

The I&CS division specialized in industrial inkjet printing, laser marking, and case coding but was considered non-core to Nampak’s long-term strategy.

These divestments align with Nampak’s broader objective of streamlining its portfolio to focus on high-margin packaging solutions, particularly in the food and beverage sectors. 

The company aims to strengthen its position in South Africa and other core African markets while reducing exposure to high-risk operations.

With the sale of Bevcan Nigeria completed, Nampak’s leadership has reiterated its commitment to stabilizing its financial position and driving long-term shareholder value through strategic asset management and operational efficiencies. 

The market has responded positively to these initiatives, as reflected in the company’s rising share price and investor confidence.

Nampak initially acquired Bevcan Nigeria in 2014 for US$180.6 million, making the recent sale a substantial loss. 

The decision to divest was driven by economic challenges in Nigeria, including the removal of fuel subsidies and the devaluation of the naira, which had adversely impacted Nampak’s financial performance in the region.

Nampak’s exit adds to a growing list of South African companies that have pulled out of Nigeria in recent years. 

Retail giant Shoprite left the market in 2021, with its brand now operating under a franchise agreement. Other notable departures include Tiger Brands, which sold its stake in UAC in 2021, Woolworths in 2013, and Massmart in 2022.

Financial challenges and the road ahead

In its financial report for the fiscal year ending September 30, 2023, Nampak disclosed an attributable loss of US$107.18 million (R2 billion) from its Nigerian operations. 

This included a goodwill impairment of US$83.06 million (R1.55 billion), highlighting the financial strain the subsidiary had placed on the company.

Nampak has been undergoing a major restructuring process for the past two years, aiming to improve its leverage ratio and financial stability. 

In December 2024, the company reported a modest revenue increase alongside a sharp rise in profits, contrasting with the losses recorded in the previous financial year.

As part of these efforts, Nampak has also converted its debt into long-term, rand-denominated obligations, improving its overall risk profile.