UK/US: SAB unveils $5.6 billion acquisition of Miller
South African Breweries (SAB) is to buy Miller Brewing from owner Philip Morris to create the world's second largest beer group behind Anheuser Busch, for US$5.6 billion.
The new concern will be called SABMiller and will have lager volume sin excess of 120m hectoliters, while for the 12 months to 31 March 2002 pro forma adjusted EBITDA for the combined entity is US$1.5 billion.
The deal is expected to close in July, pending regulatory approval, said Miller parent company Philip Morris Cos.
"SABMiller will immediately become the world's second-largest brewer, with arguably the best geographic footprint among all global brewers," Philip Morris chief executive Louis Camilleri said in a statement.
London-based South African Breweries, SAB is paying US$3.6 billion in shares to Miller's owner, Philip Morris, and taking on Miller debt of US$2 billion. The deal will give US Marlboro cigarette and Kraft food group Philip Morris a 36% economic interest in SABMiller.
The group will be headquartered in London but will continue operating Miller's seven US breweries.
Graham Mackay, SAB CEO, said: "This transaction represents a new chapter in our development, taking SABMiller to the number tow position globally, and positioning us to be a major participant in the ongoing consolidation of the global beer industry. The transaction will provide access for SAB to a significant position in the US market, which enjoys the brewing industry's largest profit pool. Furthermore it will enhance SAB's international brand portfolio."
The deal will be earnings enhancing in year one, pre-goodwill amortisation and before synergies, and is expected to deliver annual cost synergies of US$50m by the end of year three, SAB said.
But some analysts have signaled that they believe SAB may have overpaid, with many expecting it to pay only US$5 billion. However Stuart Price beverage analyst with WestLB Panmure said: "The bears will point out that SAB has seeming over-paid for an under-performing US business. However, these same bears have criticized SAB for its focus on emerging markets - they cannot have it both ways. Miller reduces the EBIT exposure to South Africa from 51% to 33%; it also gives SAB a similar country risk profile to Carlsberg and Interbrew.
The global roll-out of InBev's Brazilian beer, Brahma, adds a third premium brand to the global brewer's international portfolio but some observers have suggested it's an unnecessary step which threat...
China Resources Snow Breweries Limited (CR Snow) has entered into an agreement with the Fuyang City government to acquire the assets of the Fuyang City Snowland Brewery Company in Anhui province for U...
Anheuser-Busch has increased its economic interest in China's Tsingtao to 27% upon its conversion of all the remaining convertible bonds in Tsingtao....
Equity analyst Legg Mason has downgraded its rating of the US brewer Anheuser-Busch from "hold" to "sell" after the company issued a statement saying it expected sales below previous estimates....
Following its recent re-launch in the UK, SABMiller has introduced its Italian lager brand Peroni Nastro Azzurro to the Romanian market....
The US brewer Anheuser-Busch Cos has reported first quarter 2005 domestic beer volumes below previous expectations....
Appletiser has announced a sales volumes increase of about 14% for South Africa in 2004, crediting this mainly to the new look packaging introduced last year....
Carlsberg cannot compete with some of the larger global brewers when it comes to earnings, according to the Danish company's CEO....
- Focus - Edrington's FY Performance by Brand
- Pernod relies on Indian whiskey to crack Africa
- Hail Marie Brizard: But, For How Long?
- Analysis - Storm clouds lift over Diageo Towers
- 5 reasons why Constellation's Meiomi buy works
- Comment - Diageo CFO to North America? Do the Math
- Diageo CFO Mahlan to head up N America
- Diageo sells "non-core" Gleneagles
- Former Bacardi exec takes De Kuyper CEO role
- Diageo lining up Gleneagles sale - report
- Global liqueurs insights - market forecasts, product innovation and consumer trends research
- Edrington Group in Spirits (World)
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- The IWSR Company Profile 2014 – Remy Cointreau
- Global Tequila insights - market forecasts, product innovation and consumer trends research