South African Breweries makes third acquisition in India
7 November 2001
London/Johannesburg, 7 November 2001: South African Breweries plc (SAB), the leading brewer in developing markets, today announces it has acquired, through its subsidiary company, SAB India Limited, a 53% controlling interest in Rochees Breweries Limited (RBL), a company listed on a number of stock exchanges in India, including the Bombay Stock Exchange. The purchase consideration for SAB's interest is US$2 million payable in cash, the equivalent to 97 million rupees, or 10.15 rupees per share.
Under the terms of Securities and Exchange Board of India regulations, a simultaneous public offer will be made to the RBL minority shareholders. The acquisition is subject to a number of conditions precedent, and will be funded from SAB's internal resources.
RBL operates a new brewery situated in Rajasthan, approximately 100 kilometres from New Delhi, with a capacity of 110,000 hectolitres, which is currently being expanded to 170,000 hectolitres. The brewery, which currently brews under licence for United Breweries ("UB"), requires no significant upgrading. SAB India Limited will use the brewery to produce a stable of local and international brands.
Strategically, RBL will afford SAB India Limited access to the important northern Indian beer market of Rajasthan, the fifth largest beer consuming state in India and growing at 8%-10% per annum, as well as to other northern states in the region, including Delhi, which has no breweries of its own.
Graham Mackay, CEO of SAB plc said: "This acquisition continues our strategy of investing in developing markets, adding to SAB's existing operations in India, and extending SAB's presence in the northern states. SAB now has capacity and direct access to markets in four of the five largest beer consuming states in India, which together account for over 70% of the Indian beer market. RBL will provide opportunities for our future expansion in India, whose demographics and low per capita beer consumption provide substantial head-room for growth."
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Notes to editors
- SAB is the world's leading brewer in developing markets, with major brewing and distribution operations in Africa, Central and Eastern Europe, and Asia. It is the world's fifth largest brewer overall by volume with 86 breweries in 22 countries and over 31,000 employees. In the year to March 31 2001, SAB generated US$646 million pretax profit from a turnover of US$4.184 billion. SAB is listed on both the London and the Johannesburg stock exchanges.
- SAB has operated in India since October 2000, when it bought the Narang brewery, located near Lucknow in the state of Uttar Pradesh. The brewery, which has a capacity of approximately 120,000 hectolitres, has recently been modernized and commenced full production in April 2001.
- In June 2001, SAB acquired a controlling interest in Mysore Breweries Limited (MBL), listed on the Bangalore Stock Exchange. MBL operates two breweries, with a combined capacity of 480,000 hectolitres, situated in Southern India at Bangalore and Aurangabad.
- SAB India has set up its Corporate Office in Gurgaon, which is near New Delhi.
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