Diageo plc and South African Breweries plc subsidiaries sign agreements in East Africa
15 May 2002
Diageo plc and South African Breweries plc today announced that their respective subsidiaries, East African Breweries Limited (EABL) and South African Breweries International (Africa) BV (SABI), have entered into agreements relating to the operation of their businesses in Kenya and Tanzania.
In Kenya, SABI has closed its brewing operations at Thika. SABI will retain its presence in Kenya by taking a 20% shareholding in Kenya Breweries Limited (KBL), a subsidiary of EABL. As part of the transaction, EABL will acquire Castle Brewing Kenya Limited (CBK), a subsidiary of SABI. Brands previously produced and sold by CBK will be produced and sold under licence by EABL.
In Tanzania, EABL has closed its Kibo Brewing operation. EABL will retain its presence in Tanzania by taking a 20% shareholding in SABI's Tanzania Breweries Limited (TBL). At the same time, TBL will acquire Kibo Breweries Limited (Kibo), a subsidiary of EABL. Brands previously produced and sold by Kibo will be produced and sold under licence by TBL.
The transaction is subject to certain conditions precedent, including the approval of the local regulatory authorities. No cash payment or compensation will be made between SABI and EABL. Each company is responsible for the closure arrangements of their own breweries.
The impact on SABI of the transaction is earnings and value enhancing.
Net assets acquired by EABL in this transaction had a value of approximately US $21.2m and the net assets acquired by SABI had a value of approximately US $24.5m.
For further information:
Anna Miller Salzman, Head of Investor Relations, SAB plc
Tel: + 44 (0) 207 659 0106
Mob: + 44 (0) 7973 837 070
Ciaran Baker, Head of Corporate Communications, SAB plc
Tel: + 44 (0) 207 659 0120
Mob: + 44 (0) 7979 954 493
Mitch Ramsay, Communications Manager SABI Africa & Asia
Tel: + 27 (0) 11 407 1822
Mob: +27 (0) 83 631 0308
Notes to Editors:
1. In Kenya, where KBL has a 90 percent market share, CBK has a 10 percent market share. Following today's agreement EABL will produce, market and sell the following SAB brands: Castle Lager, Redd's Premium Cold, Trophy Lager and Ranger Special Lager.
2. In Tanzania, TBL has about an 85 percent market share and EABL a 13 percent market share. After today's agreement TBL will produce, market and sell the following EABL and Guinness UDV brands under licence: Tusker, Pilsner and Pilsner Ice, Guinness FES, Guinness Malta and Kibo Gold.