| Wed 19 Oct 2011, 8:01 | | SAB - SAB Miller plc - Anadolu Efes and SABMiller strategic alliance |
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SAB
SOSAB
SAB - SAB Miller plc - Anadolu Efes and SABMiller strategic alliance
JSEALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
ANADOLU EFES AND SABMILLER STRATEGIC ALLIANCE
- SABMiller plc, Anadolu Group (Anadolu Endustri Holding A._., Yazycylar
Holding A.?. and Ozilhan Synai Yatyrym A._.), and Anadolu Efes Biracylyk
ve Malt Sanayii A._. ("Anadolu Efes") agree a strategic alliance for
Turkey, Russia, the CIS, Central Asia and the Middle East ("the
Territory")
- SABMiller to transfer its Russian and Ukrainian beer businesses to
Anadolu Efes
- Anadolu Efes to transfer a 24% equity stake to SABMiller by way of a
capital increase
- Anadolu Efes to be the vehicle for both groups` investments in the
Territory
- Following the capital increase, the Anadolu Group will control 42.81% of
Anadolu Efes`s enlarged share capital
- Pursuant to a shareholders` agreement between the Anadolu Group and
SABMiller, the Anadolu Group will maintain control of Anadolu Efes after
completion of the capital increase and business contribution. SABMiller
will have customary minority protection rights
- The combined Russian business will have a strong number 2 position in
value share terms, with a highly attractive brand portfolio and is
expected to yield significant cost synergies of at least US$120m per
year, and provide additional revenue synergy opportunities
- Anadolu Efes and SABMiller to share best practice and Anadolu Efes to
develop SABMiller`s international brands in the Territory
- The transaction is subject to confirmatory due diligence, execution of
legally binding documentation, regulatory approvals and approval by
Anadolu Efes`s shareholders in General Assembly of the increase in
Anadolu Efes`s share capital
SABMiller and Anadolu Efes today announce their intention to form a strategic
alliance in terms of which Anadolu Efes will be the vehicle for both groups`
investments in the Territory and SABMiller will transfer its beer businesses
in Russia and Ukraine to Anadolu Efes. Anadolu Efes will issue 142,105,263 new
Anadolu Efes shares to SABMiller, representing a 24% equity stake post
capitalisation in the enlarged Anadolu Efes.
In recognition of the long-term nature of the partnership, SABMiller and the
Anadolu Group will enter into a shareholders` agreement to ensure that the
Anadolu Group will continue to exercise majority control over Anadolu Efes.
SABMiller will be represented on the Anadolu Efes Board and will have
customary minority investment protection rights. It will also be represented
on the board of the combined business in Russia. In addition, both parties
have agreed to provide appropriate rights of first offer at fair market value
in the event of either party seeking to sell any shares in Anadolu Efes.
SABMiller and Anadolu Efes value SABMiller`s Russian and Ukrainian businesses
at an enterprise value of approximately US$1.9bn.
In exchange for transferring its Russian and Ukrainian businesses to Anadolu
Efes, SABMiller will receive a loan note. Subject to Anadolu Efes
shareholders` approval of a non pre-emptive capital increase, Anadolu Efes
will issue 142,105,263 new Anadolu Efes shares to SABMiller, representing a
24% equity stake, post capitalisation, in Anadolu Efes. The proceeds of the
capital increase will be used to immediately redeem the loan note.
Transaction Rationale
The strategic alliance will result in the enlarged Anadolu Efes strengthening
its leading position across the Territory:
- The number 2 market position, in value terms, in the large Russian beer
market with a valuable portfolio of brands across key market segments,
the footprint to compete on a national basis, and value creation through
significant cost synergies and potential revenue synergies
- A leading market position in Turkey with 89% share of the beer market and
a 69% share of the carbonated soft drinks market via Anadolu Efes`s 50.3%
interest in Coca-Cola Icecek. Turkey is one of the world`s high growth
economies, with a large population of 74 million people and forecast real
(PPP) GDP growth of 5.4% p.a. to 2015 (source EIU)
- Leading market positions in the growth beer markets of Kazakhstan,
Moldova and Georgia
- A high quality portfolio of international and local brands.
Additionally, Anadolu Efes and SABMiller will benefit from the opportunity to
distribute each other`s international brands across their respective platforms
(subject to existing contractual arrangements) and the sharing of best
practice.
The transaction is expected to be EPS enhancing for both Anadolu Efes and
SABMiller in the first full year following completion.
Conclusion
Commenting on the announcement, Tuncay Ozilhan, Chairman of Anadolu Efes and
Anadolu Group, said, "We are delighted to join forces with such a strong
business partner as SABMiller and to enlarge the Anadolu Efes business in
Russia and Ukraine as we believe this will enable us to better capitalize on
the potential growth opportunities in our operating region in line with our
long term growth plans". Mr. Ozilhan also added "In addition to the
significant synergy opportunities available to us as a result of this
partnership, we will command a much stronger position in Russia. Moreover,
this deal will further strengthen our overall presence in our operating region
as a whole and add significant value to both Anadolu Efes and SABMiller
stakeholders."
Graham Mackay, Chief Executive of SABMiller, said, "Both SABMiller and Anadolu
Efes have proved to be successful operators in diverse and challenging
emerging beer markets and this strategic alliance will allow both our groups
to benefit from each other`s expertise, and the combination of our resources.
Anadolu Efes`s leading position in beer and soft drinks in the Turkish market
and an alliance for further growth and acquisitions in the CIS and Middle East
are highly attractive. The prospects for these markets are excellent. They
exhibit positive long term demographic, GDP and beer market growth outlooks.
We have admired the achievements of Anadolu Efes for many years and we are
looking forward to working closely with them in the future."
Approval Process and Timetable
Anadolu Group, Anadolu Efes and SABMiller have entered into exclusive
negotiations and expect to agree definitive legal documentation as soon as
possible and to complete the transaction before year end, subject to obtaining
clearance from the competition authorities in relevant territories and any
other necessary regulatory clearances, and the approval of Anadolu Efes`s
shareholders at a General Meeting.
The Anadolu Group has irrevocably undertaken to vote in favour of the
necessary resolutions in the General Assembly of Anadolu Efes shareholders.
A further announcement will be made in due course.
Enquiries
SABMiller Anadolu Efes
SABMiller Media Relations Anadolu Efes Inv`tor Relations
Nigel Fairbrass / Beth Longcroft Can Caka
Tel: +44 20 7659 0105 / Tel: +44 20 7659 0144
Tel: +90 216 586 80 53
can.caka@Efespilsen.com.tr
SABMiller Investor Relations Anadolu Efes Inv`tor Relations
Gary Leibowitz / Tristan Van Strien Ay?e Dirik
Tel: +44 20 7659 0119 / Tel: +44 20 7659 0136
Tel: +90 216 586 80 02
ayse.dirik@Efespilsen.com.tr
www.sabmiller.com www.anadoluefes.com
Advisers
SABMiller has retained Nomura as sole financial adviser, Hogan Lovells
International LLP and Herguner, Bilgen, Ozeke as legal advisers, and JPMorgan
Cazenove and Morgan Stanley as joint brokers.
Anadolu Efes has retained Rothschild as financial advisers, and DLA Piper UK
LLP and YukselKarkinKucuk Attorney Partnership as legal advisers.
Overview of SABMiller
SABMiller is one of the world`s largest brewers with brewing interests and
distribution agreements across six continents. The group`s wide portfolio
includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller
Genuine Draft and Grolsch, as well as leading local brands such as Aguila,
Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the world`s
largest bottlers of Coca-Cola products.
In the year ended 31 March 2011, the group reported US$5,617 million adjusted
EBITDA and group revenue of US$28,311 million. SABMiller is listed on the
London and Johannesburg Stock Exchanges.
SABMiller Russia and Ukraine
In the year ended 31 March 2011, SABMiller`s Russia and Ukraine subsidiaries
reported beer volumes of 6.9 m`hl, net sales of US$678m and generated US$149m
EBITDA. In Russia, SABMiller currently has 7.2% and 10.2% market share in
volume and value terms respectively and a total annual brewing capacity of 10
m`hl. The brand portfolio of SABMiller in Russia includes local brands such as
Zolotaya Bochka, Tri Bogatyrya and Moya Kaluga, alongside SABMiller`s
international brands including Miller Genuine Draft, Velkopopovicky Kozel and
Pilsner Urquell. In Ukraine, SABMiller currently has a 6.2% market share in
volume terms and a total annual brewing capacity of 1.7 m`hl. The brand
portfolio of SABMiller in Ukraine includes local brands such as Sarmat and
Zhygulivske, as well as Miller Genuine Draft, Zolotaya Bochka, Velkopopovicky
Kozel and Amsterdam Mariner.
Overview of Anadolu Efes
Anadolu Efes, together with its subsidiaries and affiliates produces and
markets beer, malt and soft drinks across a geography including Turkey,
Russia, the CIS countries, South Eastern Europe and the Middle East. Anadolu
Efes is the beverage division of Anadolu Group, one of Turkey`s leading
conglomerates, and is listed on the Istanbul Stock Exchange.
Anadolu Efes has 16 breweries, 7 malteries and 20 Coca-Cola bottling plants in
15 countries, and Anadolu Efes`s operations reach over 600 million consumers
throughout a wide geographical area.
In the year ended 31 December 2010, Anadolu Efes`s total beer sales volume was
24.2m`hl and soft drink sales volume, through its 50.3% owned subsidiary Coca-
Cola Icecek, was 665.4m unit cases. On an IFRS basis Anadolu Efes reported net
sales, EBITDA and profit after tax of TRY4,169m (US$2,781m), TRY1,019m
(US$680m) and TRY504m (US$336m) respectively for the year ended 31 December
2010. The Turkish beer operation contributes some 31% of Anadolu Efes`s net
sales, the international beer operation 35% and the proportionately
consolidated soft drink operation 34%. At an EBITDA level, Turkish beer
operation, international beer operation, and the proportionately consolidated
soft drink operation contribute 49%, 30% and 21% respectively.
The Anadolu Group holds 56.33% of Anadolu Efes`s share capital prior to the
completion of this transaction.
Date: 19/10/2011 08:01:35 Produced by the JSE SENS Department.
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