Remgro Limited (JSE:REM) News - Remgro shareholders are referred to the joint Distell and Heineken announcement Remgro Limited (Incorporated in the Republic of South Africa) (Registration number 1968/006415/06) (ISIN: ZAE000026480) (Share code: REM) (“Remgro” or “the Company”) PROPOSED SCHEME OF ARRANGEMENT IN RESPECT OF DISTELL GROUP HOLDINGS LIMITED ("DISTELL") AND RELATED TRANSACTIONS PROPOSED BY HEINEKE N INTERNATIONAL B.V. ("HEINEKEN") 1. Introduction Remgro shareholders are ref erred to the detailed joint firm intention announcement (the "Firm Intention Announcement") by Distell and Heineken, released on the Stock Exchange News Service ("SENS") of the securities exchange operated by JSE Limited (the " JSE") today, 15 November 2021, setting out the terms of a proposed scheme of arrangement in terms of section 114 of the Companies Act, 2008 between Distell and its shareholders (the "Scheme") and related transactions (the "Proposed Transaction"). The purpose of this voluntary announcement is to disclose the expected effect of the Proposed Transaction on Remgro. 2. Expected effect of the Proposed Transaction on Remgro As referred to in more detail in the Firm Intention Announcement : • the Proposed Transaction will result in the combination of the Heineken Southern African business, including an interest in Namibia Breweries Limited ("NBL"), with the bulk of the Distell business (consisting of its cider, other ready-to-drink beverages and spirits and wine business) in a new unlisted entity controlled by Heineken and ref erred to as Newco , thereby creating a world-class, Southern-African focussed, alcoholic beverages entity with a leading beer and cider portfolio, combining the complimentary brands, talent and skills of Distell, Heineken and NBL to better serve consumers across the region. The entity will also have a significant presence in adjacent African markets; • the Proposed Transaction will include a proposed unbundling by Distell, to existing Distell shareholders, of the unlisted shares in Distell's subsidiary, Capevin Holdings Proprietary Limited ("Capevin"), which holds Distell's remaining assets, including its Scotch whisky business (the "Capevin Unbundling"); and • the Proposed Transaction will also include – o an offer by Newco to Distell shareholders to acquire their Distell shares, for a cash consideration of R165 per share and /or unlisted shares in Newco, or a combination thereof , as set out in more detail in the Firm Intention Announcement; and o an offer by Heineken to Distell shareholders to acquire the Capevin shares that Distell shareholders will receive pursuant to the Capevin Unbundling, for a cash consideration of R15 per Capevin share. Remgro recognises the long-term strategic benefit of combining the relevant Distell and Heineken businesses and is supportive of the Proposed Transaction. Accordingly, and as ref erred to in the Firm Intention Announcement, Remgro has provided an irrevocable undertaking to vote its Distell shares in favour of the Scheme. Remgro intends to elect to receive Newco shares for its Distell shares in terms of the Scheme consideration and is accordingly expected to be a significant shareholder in Newco. Remgro does not intend to accept the cash offer to be made by Heineken for the Capevin shares that it will receive pursuant to the Capevin Unbundling. It is therefore expected that Remgro will have a controlling shareholding in Capevin which mirrors its current controlling shareholding in Distell. 3. Value of the net assets and profits attributable to the net assets As at 30 June 2021 (Distell’s last audited results, which were prepared in terms of International Financial Reporting Standards – “IFRS”), the net asset value of Distell (excluding non-controlling interests) amounted to R13.1 billion. The earnings and headline earnings of Distell and its operations, for the year ended 30 June 2021, were prof its of R1.9 billion and R1.7 billion, respectively. As at 30 June 2021 (Remgro’s last reported IFRS results), the market value and accounting net asset value of Remgro’s holding in Distell amounted to R11.7 billion (representing 11.6% of Remgro’s intrinsic net asset value) and R7.6 billion (representing 8.6% of Remgro’s net asset value), respectively. The earnings and headline earnings of Remgro, for the year ended 30 June 2021, attributable to Distell and its operations were prof its of R616 million and R538 million, respectively. In terms of IFRS, Remgro accounts for its 31.7% economic interest in Distell (representing 31.3% of Distell’s listed issued ordinary shares) as a subsidiary, due to the fact that Remgro also holds 124.2 million unlisted, voting only B-shares in Distell, resulting in a voting interest of 56.4%. On implementation of the Proposed Transaction, Remgro's economic interest in Distell is expected to be replaced by economic interests in Newco and Capevin, in line with Remgro's intention, as disclosed in paragraph 2 above, to accept shares in Newco as consideration for its Distell shares and not to accept the cash offer for its Capevin shares. 4. Conditions precedent to the Proposed Transaction The implementation of the Proposed Transaction is subject to various conditions precedent set out in detail in the Firm Intention Announcement and which include: • the approval by Distell shareholders of the Scheme and the Capevin Unbundling; • the approval by shareholders of NBL of those components of the Proposed Transaction which require their approval; and • the approval of all other relevant authorities, including the South African Reserve Bank and the competition authorities in various jurisdictions . Stellenbosch 15 November 2021 Sponsor Rand Merchant Bank (A division of FirstRand Bank Limited) Financial Advisor HSBC Bank plc Legal Advisor Cliffe Dekker Hofmeyr Inc. Date: 15-11-2021 08:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.