Koninklijke Grolsch NV supports SABMiller plc intended public offer
19 November 2007
KONINKLIJKE GROLSCH N.V. SUPPORTS SABMILLER PLC’S INTENDED PUBLIC OFFER OF €48.25 PER SHARE FOR ALL THE ISSUED SHARES
This is a joint press release by SABMiller plc ("SABMiller") and Koninklijke Grolsch N.V. ("Grolsch") pursuant to the provisions of Section 5 paragraph 1 and section 7 paragraph 4 of the Dutch Decree on Public Takeover Bids (Besluit openbare biedingen Wft). This announcement is not for release, publication or distribution, in whole or in part, in or into the United States, Canada, Australia, Japan or Italy. This announcement and related materials do not constitute an offer for (depository receipts or) shares in Grolsch (the “Shares”), but constitute notice that a conditional agreement has been reached between SABMiller and Grolsch on the terms of a recommended offer to be made by SABMiller.
- SABMiller intends to make an offer of €48.25 per Share for 100% of the outstanding Shares of Grolsch. This Offer represents an 84.3% premium to Grolsch’s average closing share price over the last month and a total consideration of €816 million;
- Grolsch is an iconic Dutch brand whose rich Northern European heritage and premium positioning will complement and further build SABMiller’s existing international brand portfolio;
- SABMiller sees significant additional potential for the Grolsch brand across Africa and Latin America, where the premium segment is still in its infancy, and in the more developed markets of Central and Eastern Europe;
- SABMiller anticipates that production volumes at the modern Enschede brewery will increase following the transaction;
- The Management and Supervisory Boards of Grolsch unanimously support the intended Offer although they did not seek a takeover approach;
- An irrevocable undertaking has been entered into by Stichting NBC on behalf of certain shareholders (the “Committed Shareholders”) and SABMiller to tender the Shares held by the Committed Shareholders, representing some 37% of the outstanding Shares; and
- The acquisition will be marked by the establishment of an employee fund of €8 million.
SABMiller (SAB.L) and Grolsch (GROL) today announced that they have reached conditional agreement regarding the making, by SABMiller, of a fully financed, public cash offer to acquire all the outstanding Shares of Grolsch The offer price of €48.25 per Share of Grolsch (the “Offer”), represents a premium of 84.3% to the average closing price of Grolsch’s Shares over the last month. No further dividends are expected to be declared prior to the completion of this Offer. The Offer values 100% of the issued and outstanding Shares of Grolsch at approximately €816 million.
Grolsch is an iconic Dutch beer brand with almost 400 years of brewing heritage and a strong position in the Netherlands. It is positioned as a true Dutch beer brewed to an original recipe which is now complemented by 21st century production processes and innovative packaging. In addition to Grolsch Premium Pilsner, which accounts for over 90% of its portfolio, Grolsch also has a number of attractive brand variants including Grolsch Premium Weizen, Spring Bock and Autumn Bock as well as the Amsterdam brand.
Grolsch’s provenance, unique taste profile and existing premium positioning will play a highly complementary role in SABMiller’s international brand portfolio and better position SABMiller to grow market share in the fastest growing segment of the global beer market. The SABMiller group has the scale and reach to grow the Grolsch brand internationally via its operations which span more than 60 countries, across six continents. SABMiller’s global footprint provides opportunities to take the Grolsch brand into new geographies, particularly in developing markets where, historically, quality Northern European brands have often established the premium segment. SABMiller sees significant potential across Africa and Latin America, where the premium segment is still in its infancy, and in the more developed markets of Central and Eastern Europe. South Africa represents a key opportunity and with the addition of Grolsch, SABMiller will have a particularly strong portfolio of highly differentiated premium brands in that market. No change to the existing distribution agreements for the brand in the USA, UK, Canada, Australia and certain smaller markets is anticipated at this time.
In 2004 Grolsch completed the construction of a state of the art c. 3.8 million hectolitre brewery. This brewery has sufficient capacity to accommodate significant international growth of the Grolsch brand while also providing an opportunity for SABMiller to brew its own international brands for sale in the Netherlands and for export to key markets.
Grolsch has a proven track record of innovation and operating excellence and this is expected to provide reciprocal opportunities for the sharing of best operating practice between the two companies. By leveraging these opportunities and enhancing the prospects for Grolsch both in its home market, across Europe and around the world, the combination of Grolsch with SABMiller is expected to benefit all of Grolsch’s stakeholders. SABMiller has committed to guarantee the employment terms and pension rights of Grolsch’s employees and will seek to increase production levels at the Enschede brewery.
The Supervisory Board and Management Board of Grolsch unanimously support the intended Offer and, after taking into account the interests of all stakeholders, including Grolsch’s shareholders and employees, will recommend that shareholders accept the Offer when made. The Offer is also fully supported by Committed Shareholders that hold over 37% of the issued and outstanding Shares of Grolsch. The Committed Shareholders have signed an irrevocable undertaking to tender their shares to SABMiller if the intended Offer is made. The irrevocable contains certain customary undertakings and conditions including that the Committed Shareholders will only tender their Shares to a third party offeror at a price of at least 7.5% above the Offer price. SABMiller will have the right to match any bona fide competing offer.
Commenting on the transaction, Graham Mackay, Chief Executive of SABMiller, said: “Grolsch will provide SABMiller with a powerful addition to its international brand portfolio. Within the SABMiller family Grolsch will continue to build on almost 400 years of brewing heritage, and together we will establish new positions in the most important emerging beer markets around the world. Both companies share a passion for the brewing tradition, and we are delighted to be part of this new chapter in Grolsch’s development.”
Commenting on the transaction, Ab Pasman, Chief Executive of Grolsch, said: “In addition to financial considerations it was important for us to give a lot of attention to the interests of our employees, customers and our home region. We were doing a good job executing our independent strategy. When we were asked to consider SABMiller’s proposal the key question was if greater value could be achieved than through our own existing strategy. Since this appeared to be the case we entered into discussions and we believe that SABMiller’s intended Offer delivers benefits to all of our stakeholders. We look forward to continuing to build our position as a premium brand within the new family.”
Following the request of the Supervisory and Management Boards of Grolsch an employee fund worth €8 million will be established to mark the planned acquisition.
SABMiller and Grolsch expect to reach full agreement regarding the final Offering Memorandum shortly. When made, the Offer will be subject to customary conditions, including an acceptance threshold of at least 75% per cent of the outstanding Shares of Grolsch. SABMiller requires permission of the Management and Supervisory Boards of Grolsch in order to declare the public offer unconditional in the situation that less than 66.7% of the outstanding Shares have been tendered, committed and acquired. In the event that the Offer is declared unconditional and less than 95% of the total share capital is acquired, SABMiller intends to utilize available legal measures (for example a legal merger and squeeze out) in order to increase their ownership to 100% of the total share capital. The offer will not be subject to regulatory clearances.
The Offering Memorandum is expected to be published in early January 2008. Following the publication of the Offering Memorandum, Grolsch will convene an extraordinary general meeting of shareholders to inform its shareholders about the Offer and to approve certain customary resolutions that are to be adopted as a condition to the Offer.
The Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten) and the Social-Economic Council (Sociaal Economische Raad), and the relevant anti-trust authorities have been or will be informed. The relevant trade unions will be duly notified. The works council of Grolsch will be requested for advice.
ABN AMRO Bank is acting as financial adviser to SABMiller. Stibbe together with Lovells (London) are acting as legal advisers to SABMiller.
Fortis is acting as financial adviser to Grolsch. De Brauw Blackstone Westbroek is acting as legal adviser to Grolsch.
Overview of SABMiller
SABMiller plc is one of the world’s largest brewers with brewing interests or distribution agreements in over 60 countries across six continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands. Outside the USA, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world. In the year ended 31 March 2007, the group reported $3,154 million adjusted pre-tax profit and revenue of $18,620 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
For more information on SABMiller plc, visit the company's website: www.sabmiller.com.
Overview of Grolsch
Grolsch is a listed company with a rich tradition that goes back to 1615. The focal point of Grolsch’s commercial activities lie in the Netherlands, Grolsch’s historic home market. However, important international markets for Grolsch include the United Kingdom, the United States of America, Canada, France, Australia and New Zealand. Grolsch is focused on targeting the premium segment with the Grolsch brand as its main product.
In the year to 31 December, 2006, Grolsch reported turnover of €317.6 million and net profit of €19.2 million. Total worldwide sales volumes were 3.2 million hectoliters (hls), comprising 1.6 million hls of domestic volumes in the Netherlands, and 1.6 million of international volumes. Grolsch has approximately a 15% market share in the Netherlands, where it operates from one brewery in Enschede. Its main domestic brands include Grolsch Premium Pilsner, which represents approximately 90% of total volumes in the Netherlands. Grolsch achieves approximately 80% of its international sales volumes in the UK, the United States, Canada, France, Australia and New Zealand through a network of alliances.
For more information on Grolsch N.V., visit the company's website: www.grolsch.com.
This announcement is for information only and does not constitute an offer or an invitation to acquire or dispose of any securities or investment advice or an inducement to enter into investment activity. This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire the securities of SABMiller or Grolsch (the "Companies") in any jurisdiction.
The distribution of this announcement may be restricted by law. Persons into whose possession this announcement comes are required by the Companies to inform themselves about and to observe any such restrictions.
This press release includes "forward-looking statements" and language indicating trends, such as "anticipated" and "expected". Although the Companies believe that the assumptions upon which their respective financial information and their respective forward-looking statements are based are reasonable, they can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Companies' projections and expectations are disclosed in Grolsch's annual report for the year ended 31 December 2006 and in other documents which are available on Grolsch's website at www.grolsch.com and in SABMiller's annual report and accounts for the year ended 31 March 2007 and in other documents which are available on SABMiller's website at www.sabmiller.com. These factors include, among others, changes in consumer preferences and product trends; price discounting by major competitors; failure to realize anticipated results from synergy initiatives; failure to obtain regulatory consents or other third party approvals; and increases in costs generally. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Neither SABMiller nor Grolsch undertakes to update forward-looking statements relating to their respective businesses, whether as a result of new information, future events or otherwise. Neither SABMiller nor Grolsch accepts any responsibility for any financial information contained in this press release relating to the business or operations or results or financial condition of the other or their respective groups.
Tel: +44 20 7659 0100
Director of Corporate Affairs
Mob: +44 7850 285471
Senior Vice President, Investor Relations
Mob: +44 7717 428540
Head of Media Relations
Mob: +44 7799 894265
Brunswick Group LLP
Tel: +44 20 7404 5959
Koninklijke Grolsch N.V.
Tel: +31-53-48 33 176
Erna van der Neut-ter Balkt
Head of Corporate Communications
Tel: +31-53-48 33 176
This announcement and a video interview with SABMiller management are available on the SABMiller
plc website at www.sabmiller.com.
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