S AFRICA: SABMiller lines up merger of Tsogo Sun entertainment unit
SABMiller merges entertainment unit
SABMiller is set to merge its South African hotels and gaming associate, Tsogo Sun, with Gold Reef Resorts in the country.
The brewer confirmed yesterday (18 February) that Gold Reef will acquire Tsogo Sun, which SABMiller holds a 49% stake in, in return for a 39.7% holding in the new entity, which will go to SABMiller. Hosken Consolidated Investments is the indirect owner of the remaining 51%.
The transaction will benefit SABMiller through the “diversification of the enlarged group's earnings, geographies and market segments through exposure to a more diversified portfolio of assets and income streams”, the company said.
“In 2002, we facilitated a landmark Black Economic Empowerment transaction by transferring our existing gaming and hotel assets into Tsogo Sun,” said Graham Mackay, SABMiller's chief executive.
“We have been very satisfied with the development of our partnership with Tsogo Investments since then, and we are very pleased today to see it enter a new phase with this value accretive transaction, which has our full support.”
Tsogo Sun has operations in Africa, the Middle East and the Seychelles. It also owns the Southern Sun hotels group in South Africa. In addition, the firm owns 24.9% of Gold Reef, and controls 34.9% of the voting interest in Gold Reef pursuant to a voting pool agreement entered into with certain Black Economic Empowerment Gold Reef shareholders.
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