Blog: Chris Brook-CarterSABMiller leads Bavarious outcomes

Chris Brook-Carter | 10 March 2005

There has been a lot of noise but little concrete action so far in the battle that is rumoured to be going on between the world’s international brewers to acquire Bavaria.

In all respects Bavaria is likely to be the eventual winner in all of this. Its share price keeps climbing and the company needs a foreign investor if it is to survive in a toughening market.

An HSBC analyst was reported today saying that Bavaria has expanded as far as it can in the region and is highly geared as a consequence of historical acquisition activity.

“It now needs a foreign partner if it is to defend itself against the coming onslaught from AmBev,” the analyst said.

Of all the possible outcomes suggested by the media so far, my money would be on SABMiller coming through as the eventual successful bidder.
Heineken doesn’t like to overpay. InBev boss, John Brock, has already dampened speculation that he is interested and Anheuser-Busch is unlikely to accept anything but a full takeover – limiting its bargaining position with Bavaria’s controlling family the Santa Domingoes.

SABMiller has a history of broking successful takeovers with strong regional brewers, it has an excellent track record of assimilating purchases and its pockets will be deep enough to scrap it out in a bidding war.

In return it would get a brewer with a dominant position in a number of markets it operates in and one of the few brewing jewels left to acquire in a high growth region of the market.


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