Comment - SABMiller: You Can't Always Get What You Want
SABMiller's announcement earlier today (9 January) about changes to its African alliance with Castel Group is the next best thing for the UK-based brewer.
In recent years, talk has turned to SABMiller's hopes of buying out Castel's beer division, Les Brasseries & Glacieres Internationales (BGI), from their JV in Africa. Today's move, which sees the firms' Nigerian businesses combine to be managed by SABMiller, with the Angolan businesses set to be handled by Castel, makes one thing perfectly clear: BGI is still not for sale.
Just over a year ago, Castel was moved to announce that it was not in talks to offload BGI to SABMiller. Such a purchase would then have made perfect sense for SABMiller, which considers Africa to be its backyard, due to its South African routes.
Fast forward to March last year, however, and such a transaction began to look even less likely. Speaking at the Consumer Analyst Group Europe's annual conference, SABMiller's CEO, Graham Mackay, noted that, while consolidation in the brewing sector would continue, family-owned companies – like Castel - “want higher prices and it generally makes the transactions less attractive”. Indeed, in October 2010, one analyst described the prospective bid price of US$9.5bn for BGI as "crazy".
"There are very few beer players with an open share register," Mackay observed in March last year.
One such beer player – Foster's – no longer appears on such a list: SABMiller saw to that late last year, when it snapped up the Australian firm.
But, ask yourself this: If BGI was a possible buy at the same time as Foster's was a target, would SABMiller have tended to its backyard rather than head for Sydney?
I think so.
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