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SAB announces the results of the SAB Zenzele Retailer Offer

9 June 2010

9 June 2010

INTRODUCTION

The South African Breweries Limited ("SAB") and SAB Zenzele Holdings Limited ("SAB Zenzele") are pleased to announce the successful closing of the offer of SAB Zenzele shares to qualifying applicants (the "Retailer Offer"). In terms of the Retailer Offer, black-owned licensed liquor retailers and liquor licence applicants, as well as registered black-owned customers of ABI, the soft drinks division of SAB ("Retailers"), were invited in terms of a prospectus (the "Prospectus") to apply for 19,228,250 ordinary shares in SAB Zenzele ("SAB Zenzele shares"). The offer, which closed on 28 April 2010, attracted over 33 000 applications and was 29% oversubscribed. Following the allocation process outlined below, this has resulted in the introduction of a broad base of 29,542 black shareholders in SAB Zenzele, which now owns 3.52% of SAB. This is in addition to the 3.39% of SAB which is owned by The SAB Zenzele Employee Trust for the benefit of 9,416 of SAB's employees and 1.54% of SAB which is owned by The SAB Foundation - established for the benefit of the broader South African community. The shares in SAB were issued to SAB Zenzele, The SAB Zenzele Employee Trust and The SAB Foundation on 9 June 2010.

SAB MD and Chairman Norman Adami says: "We are delighted with the response to the SAB Zenzele transaction. I truly believe that the transaction has delivered on its key goals of creating genuine broad-based empowerment, focusing on retailers, employees and the broader community.

"We now have almost 40 000 new shareholders in SAB in addition to many new beneficiaries through the SAB Foundation. At SAB we have long been committed to supporting the empowerment of South Africans and nothing says this more clearly than our effort with SAB Zenzele."

BASIS OF ALLOCATION

As a result of the oversubscription, as a general principle, SAB Zenzele shares were allocated in a manner that maximises the number of participants in the Retailer Offer and which ensures a broad-based shareholding of SAB Zenzele. 

In accordance with this general principle, where Retailers submitted more than one application, those applicants were only allocated SAB Zenzele shares in respect of their application with the highest subscription value, in full or in part, and were not allocated SAB Zenzele shares in respect of any other applications made.  This general principle was also implemented by following a bottom up allocation approach, in terms of which applications that were received for higher subscription values were scaled-back to the extent required due to the oversubscription.

Unless applications were disqualified for reasons set out in the Prospectus, applications were accepted in full or in part, based on the general principle above. 

In addition, a pool of 523,752 of the 19,228,250 SAB Zenzele shares on offer have been set aside for retail liquor licence applicants who were successful in their application for SAB Zenzele shares and who obtain a valid retail liquor licence within a three year period from the closing of the Retailer Offer, as outlined in the Prospectus. It is intended that such SAB Zenzele shareholders may be allocated one additional SAB Zenzele share for every five currently allocated to them at no additional cost.

RESULTS OF THE SAB ZENZELE RETAILER OFFER

Using the principles detailed above as the basis of allocation, the results of the Retailer Offer are as follows:

- there are 29,542 Retailer shareholders in SAB Zenzele;
- Retailer shareholders hold a minimum of  317 SAB Zenzele shares each which equates to a value of approximately R50,000;
- no Retailer shareholder holds more than 2,133 SAB Zenzele shares which equates to a value of approximately R337,000;
- 97% of the SAB Zenzele shares are held by black individuals, with 3% held by black-controlled groups;
- 40% of the SAB Zenzele shares are held by black women or groups controlled by black women; and
- 63% of the Retailer shareholders hold the minimum number of 317 SAB Zenzele shares.

INCOMPLETE APPLICATIONS

Pursuant to a discretion afforded to SAB in terms of the Prospectus, SAB has decided to provisionally allocate 139,921 SAB Zenzele shares to 238 applicants in circumstances where certain application qualification requirements remains outstanding, but where SAB believes that this will be remedied with relative ease and speed. Should any of these incomplete applications fail to be remedied by 1 October 2010, SAB Zenzele will have the right to repurchase the provisionally allocated SAB Zenzele shares for a consideration equal to the initial subscription value.

REFUNDS

Refunds will be made where:

- SAB Zenzele shares could not be allocated to Retailer applicants in respect of multiple applications, due to the oversubscription;
- partial allocations had to be made due to the oversubscription;
- applicants were disqualified for any of the reasons described in the Prospectus;
- applicants withdrew their applications;
- applicants applied for amounts either above or below those specifically detailed in the tables set out in the Prospectus; and
- applicants, provisionally allocated SAB Zenzele shares on the basis described in the preceding paragraph, have advanced funds in excess of the initial subscription price.

Refunds will commence on or around 17 June 2010 and the funds will be transferred directly into the bank account supplied on each relevant applicant's application form.

Refunds of less than R100 that relate to successful applications will be paid without interest together with the first SAB Zenzele dividend payment, expected in November 2010.

WELCOME PACKS

Welcome packs will be posted to all successful Retailer applicants on or about 17 June 2010 to inform them, amongst other things, of the following:
- the extent to which their applications were accepted (the number of SAB Zenzele shares that have been allotted and issued to them);
- the amount of refunds, if any; and
- important shareholder information.

Separate letters have also been sent to unsuccessful applicants and those applicants who have certain qualification requirements outstanding as described above. All applicants may call the SAB Zenzele call centre at 0861 900 903 with any queries.

For further information, please contact Robyn Chalmers on 082 924 2267, Benedict Maaga on 079 890 7300 or Emma King on 072 010 7704.

SABMiller plc queries can be directed to Nigel Fairbrass on +44779 9894265.

Notes to editors

About SAB

SAB was established in 1895 and has in the region of 9,400 permanent employees, including its soft drinks division, ABI. It owns seven breweries with a brewing capacity of some 31 million hectolitres. Total beer volumes during the financial year ended 31 March 2010 were 25.8 million hectolitres. ABI is the largest producer and distributor of Coca-Cola brands in southern Africa. With five manufacturing plants in South Africa, ABI accounts for approximately 60% of Coca-Cola's sales in South Africa, and total sales volumes of soft drinks in the year ended 31 March 2010 (including sparkling soft drinks, fruit juices and water) were 17 million hectolitres. SAB is a South African subsidiary of SABMiller. For more information, visit the company's website: www.sablimited.co.za.

SAB's history of BBBEE in South Africa

SAB has been actively engaged in the advancement of broad-based black economic empowerment ("BBBEE") initiatives in South Africa since the 1970's.  The group has progressed a number of initiatives in all spheres of BBBEE, including:  ownership, through the creation of Tsogo Sun Holdings in a landmark BBBEE ownership transaction in the hotel and gaming industry; enterprise development, through the establishment of a number of benchmark programmes such as SAB's Owner-Driver programme, the SAB KickStart Awards (funding and mentoring of aspirant businesses), the Taung barley farmers programme, the establishment of joint ventures with black partners to supply certain key raw materials; SAB's Mahlasedi Taverner Training programme; and human resources development, through the implementation of employment equity practices.

In addition, SAB has placed significant focus on procurement equity throughout its value chain.  The company embarked an extensive BBBEE campaign during the 1980s in an effort to place a considerable portion of its business with black suppliers.  Today, in its procurement, outsourcing and contract-awarding activities, SAB favours those companies who have demonstrated a tangible and deliverable commitment to BBBEE principles.

About the SAB Zenzele transaction

The SAB Zenzele BBBEE transaction was first announced on 1 July 2009. It has placed 8.45% of SAB's shares under black ownership and is estimated to be worth R7.3 billion.

The BBBEE transaction is genuinely broad-based, and the participants are SAB employees (through The SAB Zenzele Employee Trust); black-owned licensed liquor retailers and liquor licence applicants, as well as registered black-owned customers of ABI, the soft drinks division of SAB, and a new SAB Foundation. After the ten-year transaction period, SAB Zenzele shares will be exchanged for SABMiller shares in respect of the Retailer Offer and SAB shares will be exchanged for SABMiller shares in respect of The SAB Zenzele Employee Trust and The SAB Foundation. 

Three separate investment entities have been created to implement the transaction:

- The SAB Zenzele Employee Trust now holds 40% of the SAB shares issued under the transaction. Participants include all permanent black employees of SAB, its subsidiaries and of the SABMiller Group who are permanently resident in South Africa as well as white employees who do not normally participate in the existing group share option plan.

- SAB Zenzele, a South African registered public company, now holds 42% of the SAB shares issued under the transaction. Black-owned licensed liquor retailers and liquor licence applicants, as well as registered black-owned customers of ABI were eligible to participate.

- The newly created SAB Foundation now holds 18% of the SAB shares issued under the transaction. It will apply the dividend income received from these shares for the benefit of the wider South African community. The Chairman and Board of Trustees of the Foundation, which focuses on fostering entrepreneurship, include Cyril Ramaphosa, the well-known businessman; William Rowland, Honorary President of both the World Blind Union and of Disabled People of SA; and Polo Radebe, CEO of the Identity Development Fund. SAB trustees are Norman Adami, Vincent Maphai, Corporate Affairs and Transformation Director, and Hepsy Mkhungo, Head of Transformation, CSI and Enterprise Development.

Participants, from inception, have voting and economic rights in SAB, and bi-annual cash dividends are expected to be paid to all participants from year one for the whole of the ten-year transaction period.

This SABMiller subsidiary news release was published in its local market on [09/06/2010].

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