The Nation Newspaper

Tag: SABmiller

  • Coca-Cola to invest $90m in Kenya to broaden product range

    Coca-Cola to invest $90m in Kenya to broaden product range

    Soft drinks maker, Coca-Cola, says it plans to invest up to $90 million in Kenya over three years through 2018 to increase its product range in the region.

    In a statement on Tuesday in Nairobi, the company said the wider range of soft drinks in the country would begin in 2018 but did not give details of the range of products

    Coca-Cola, which is the leader in the Kenyan soda market with brands like Coke and Fanta, said it had invested a total of $17 billion in Africa since 2014.

    According to the company, the amount doubles what was invested in the continent a decade before.

    The group, however, faces growing competition in Kenya from other soft drinks producers like SABmiller and PepsiCo.

    NAN

  • SABMiller sales hurt by economic volatility in Africa

    Brewer SABMiller, to be bought by Anheuser-Busch InBev, has reported lower quarterly revenue, hurt by tough conditions in some African markets.

    The maker of beers, such as Castle Lager, Peroni and Grolsch, said the group net revenue fell four percent in its first quarter, ended June 30, with volume flat.

    Excluding the impact of acquisitions, disposals and currency fluctuations, revenue rose two percent as gains in Europe, South Africa and Latin America offset more challenging conditions in other African markets, where volume was hurt by economic volatility and tough conditions.

    In its trading statement on Thursday, which comes ahead of its annual general meeting, (AGM) SABMiller did not mention its pending $107 billion takeover by Anheuser-Busch InBev, which received approval by the United States.

    The takeover of the London-listed brewer has come under scrutiny in recent weeks as a drop in the British currency has reduced the relative attractiveness of the all-cash offer aimed at most SAB shareholders.

    Two activist hedge funds, TCI and Elliott Advisors, have taken small stakes in the brewer, raising the possibility that shareholders may push to try to get improved terms.

  • SABMiller declares new savings goal in defence against AB InBev

    Brewer SABMiller Plc at the weekend announced an expanded cost-cutting plan, stepping up its defence against an unsolicited $100 billion takeover offer from bigger rival Anheuser-Busch InBev (ABI.BR).

    The 30-page presentation posted on the website of the world’s second-largest brewer was seen as an attempt to prise a higher price out of AB InBev two days after it rejected its proposed main cash offer of 42.15 pounds a share.

    “SAB’s move now puts the ball firmly back into AB InBev’s court,” analysts at Barclays said.

    On a day the heads of both companies were meeting with SAB shareholders, SAB said it now expects to reach annualized cost savings of at least $1.05 billion by 2020. The prior target for its savings program, announced in May 2014, was $500 million by 2018.

    “They want a higher price and they’re arguing for it,” said Berenberg analyst Javier Gonzalez Lastra. “It doesn’t change much. I think most people think ABI could realise synergies of $2 billion or more,” he said.

    Later on Friday two major institutional shareholders issued statements supporting SABMiller’s stance. Poland’s Kulczyk Investments, which has a 3 per cent stake in SABMiller, said AB InBev’s proposal “does not reflect SABM’s standalone growth potential.”

    Aberdeen Asset Management (ADN.L), which has a 1.8 per cent stake, said the offer “significantly undervalues” SABMiller.

    “AB InBev’s bid for SABMiller is welcome, as it draws attention to the company’s undervaluation, but the bid is opportunistic and Aberdeen will not support the current offer,” said Devan Kaloo, head of global emerging markets, equities. AB InBev need to rethink their numbers.”

    AB InBev is renowned for its ruthless cost-cutting, austere culture and industry-leading profit margin, which stood at 39.4 percent last year. In its presentation SAB stressed that its top 20 markets already had a margin of 38 per cent in aggregate, though its overall margin last year was 29.5 per cent.

    Industry sources have said that if SAB were swallowed by AB InBev, it was likely it would have to adopt a more centralized operating structure.

    SAB, whose brands include Peroni, Grolsch and Pilsner Urquell, said on Friday it was already moving in that direction, with about 70 percent of its additional savings coming from procurement and the rest from manufacturing and distribution.

    “We are continuing to remove duplication across markets, bringing specialist expertise in areas like procurement under one roof, and standardizing common processes,” said Chief Executive Alan Clark in a statement.

    “It results in our markets being freed up to concentrate on what they do best – growing revenue with local consumers and customers.”

    SAB’s response came after Carlos Brito, his counterpart at AB InBev, made repeated calls on SABMiller shareholders to get Clark and his co-directors to start “proper discussions” with AB InBev.

    “Notwithstanding our good-faith efforts, the board of SABMiller has refused to meaningfully engage with us,” Brito said on Thursday.

    Brito met with investors in New York on Friday, after meetings in London on Thursday. Clark was also meeting shareholders on Friday.

    SAB said AB InBev’s latest offer had “very substantially undervalued” the company.

  • AB InBev, SABMiller in $257b merger talks

    The world’s two biggest brewers have started “friendly” merger talks, sources told the Times. SABMiller, the maker of Peroni and Grolsch, is said to be playing hardball with AB InBev over price, but is not unreceptive to a deal.

    Earlier this month, AB InBev, brewer of Budweiser, Stella Artois and more than 200 other brands, approached SABMiller about a takeover that would form a colossus producing a third of the world’s beer.

    A merged group would have a market value of around $275 billion, and would combine AB InBev’s dominance of Latin America with SABMiller’s of Africa, both fast-growing markets, as well as their breweries in Asia.

  • SABMiller to sell Tsogo Sun stake

    SABMiller owns a number of beer brands, including Peroni Global brewing giant SABMiller has announced plans to sell its stake in a leading African hotel chain.

    The beer and drinks maker owns nearly 40 per cent of Tsogo Sun, which also operates casinos, but now says: “Gaming and hotels are not core to our operations.”

    It means its stake of more than 300 million shares, worth some $1bn (£580m), will be on offer in late July.

    However, a special placement has been made for Tsogo Sun to buy back nearly half of these shares for $260million.

    The second phase of the sale will see shares offered to institutional investors.

    SABMiller Chief Executive Alan Clarke said the company planned to “reinvest the proceeds in our core growth businesses, including our African operations”.

    The company is the second-largest beer maker in the world, selling about 21 billion litres of lager worldwide.

    In 1999 it listed on the London Stock Exchange, and since then has made acquisitions in Europe, Asia, Latin America and US.

    Its brands include Castle Lager, Peroni, China’s Snow, and Atlas beer which is popular in South America.

    Established in 1895, it was originally a South African-owned company, created during the time of the discovery of gold and mining in the country.

    It now sells drinks to consumers in 75 countries worldwide and has more than 200 brands.

    Tsogo Sun owns more than 90 hotels, plus casinos and restaurants in emerging African markets such as Nigeria, Zambia, and Kenya, and also Abu Dhabi in the Middle East.

    According to chief executive Marcel von Aulock, SAB Miller’s exit will have “a positive impact on Tsogo Sun’s earnings per share and black economic empowerment shareholding”.

  • SABMiller to sell $1.09b stake in Tsogo Sun

    ABMiller Plc (SAB) said it will sell a $1.09 billion stake in South African hotel and casino operator Tsogo Sun Holdings Ltd. (TSH) as the world’s second-biggest brewer looks to bolster beverage operations in Africa.

    Following a review of its 39.6 per cent holding in the Johannesburg-based company, SABMiller will divest the stake in a two-stage transaction involving a sale to institutional investors and a buyback of shares by Tsogo Sun, the maker of Peroni and Castle Lite said today in a statement.

    The beverage maker generates almost one-third of its earnings from the African continent, and South Africa is the second-biggest provider of the company’s revenue after Latin America. It struggled to grow in South Africa last year amid rising inflation and increased competition from Heineken NV and Diageo Plc (DGE), while expansion across Africa has been hampered by tough economic conditions in South Sudan and Zimbabwe.

    In addition to protecting market share in South Africa, “there remains a lot of whitespace opportunity for them in Africa as well,” Philip Gorham, an analyst at Morningstar, said in an e-mail. “Kenya is an opportunity. Their presence is quite patchy, and they could look to plug some geographic gaps.”

  • Obi woos Spanish investors

    Obi woos Spanish investors

    Governor Peter Obi of Anambra State yesterday urged Spanish investors to invest in Nigeria.

    He spoke in Madrid, Spain, at the Nimad 2013, a business and investment forum and trade exhibition, organised by the Nigerian Embassy.

    Obi said although Spain had pockets of businesses in Nigeria, it was yet to invest big.

    He said Nigeria had vast business opportunities.

    Citing some companies as an example of establishments, which have done well in Nigeria and Anambra State in particular, Governor Obi encouraged other companies to invest in the state, saying return on investment in the country was impressive.

    Governor Obi said: “Africa is a virgin for investment, while other parts of the world have reached their menopause. Most international companies, which built their facilities in Nigeria, make more money because the place is yet to be explored.’’

    “In Anambra State, for example, which has become the number one investment destination in Nigeria, SABmiller, the second largest brewer in the world, built a facility, which was inaugurated last year. But a visit to their website will show and it is written that the facility in Anambra has recorded the fastest growth among their facilities all over the world in their over 100 years of operations.”

    On security, the governor said the perception about Nigeria was bad and not a reality. He said people blew the matter out of proportion, adding that Nigeria is safer than most countries, especially in South America, which are enjoying robust business activities.

    Obi said those in the country were expanding and enjoined new ones to come and experience vast opportunities.

    Justifying the call to invest in Nigeria, he said the President Goodluck Jonathan administration was committed to the transformation agenda and did not joke with things that would build a better country.

    The high point of the event was the award presented to Governor Obi by the Nigerian Ambassador to Spain, Mrs. Bianca Odumegwu-Ojukwu, for transforming Anambra State through what she called “massive and sustained infrastructural provision and development of all sectors in the state.”

    Commenting on the forum, which was attended by Nigerian and Spanish businessmen, Sir Emma Bishop Okonkwo, the Chairman of Ekulo Group of Companies, said: “A forum like this will expand businesses between Nigerians and their international business partners.