| Mon 24 May 2004, 9:21 | | SABMILLER PLC LAUNCHES CASH OFFER FOR HARBIN BREWE |
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SABMILLER PLC LAUNCHES CASH OFFER FOR HARBIN BREWERY
JSEALPHA CODE : SAB
ISSUER CODE SOSAB
ISIN CODE GB0004835483
SABMiller Launches Cash Offer for Harbin Brewery
Outstanding Value and Unique Benefits
Hong Kong, 24 May, 2004 -- SABMiller plc, one of the world`s largest brewers,
today launched its offer document, urging Harbin Brewery shareholders to accept
its offer of HK$4.30 per share and making clear SABMiller`s intent to deliver a
positive future for Harbin Brewery under SABMiller majority ownership.
Mr. Graham Mackay, SABMiller`s Chief Executive, commented: `Our offer represents
outstanding and certain value for current Harbin Brewery shareholders and
delivers unique benefits to Harbin Brewery through co-operation with our
existing operations in China. SABMiller will ensure a positive future for
Harbin Brewery`s brands, breweries and employees whilst maintaining its strong
identity and heritage. We will ensure Harbin Brewery`s continued growth as a
powerful force in the Chinese brewing sector and we believe it is in the best
interests of Harbin Brewery and its current shareholders to accept our offer.`
SABMiller`s offer of HK$4.30 per share values Harbin Brewery shares:
* Higher than any closing price of the shares since IPO and prior to the
announcement of the SABMiller offer, and at a 65% premium to the average price
during that period;
* At about 38 times Harbin Brewery`s 2003 earnings; and
* At over four times its 2003 net asset value.
Majority ownership of Harbin Brewery offers a compelling and unique strategic
fit with SABMiller`s existing joint venture operation, China Resources
Breweries, in North East China, where significant geographical overlap already
exists. These opportunities are only available to SABMiller and to no other
potential majority shareholder.
With majority ownership of Harbin Brewery, SABMiller will:
* Develop Harbin Brewery`s strong brands to complement our own in building a
powerful national portfolio of brands in China;
* Improve the quality and efficiency of the distribution system by using our
increased scale;
* Maximise the brewing capacity utilisation of China Resources Breweries and
Harbin Brewery to ensure that product is brewed closer to the customer, ensuring
greater choice and higher quality; and
* Implement the tried and tested international SABMiller performance management
systems.
It is SABMiller`s intention over time to align the Harbin Brewery business with
that of China Resources Breweries. Any changes made to the current structure
will be designed to protect the unique heritage of Harbin Brewery, its brands,
breweries, employees and other interested parties. SABMiller strongly believes
that it can improve the operating environment in North East China without job
losses in either business.
In 10 years of successfully operating in China in close partnership with local
management teams and employees, SABMiller`s operations have delivered
competitive and performance advantages without ever having to close a major
functioning brewery or to undertake major headcount rationalization. SABMiller
fully intends to apply these principles to support the further development of
Harbin Brewery.
`Since 1994, together with China Resources Enterprise, SABMiller has built
China`s second largest brewing group, and this offer for Harbin Brewery is
further evidence of SABMiller`s long-standing commitment to continued success in
China. China Resources Enterprise is fully supportive of SABMiller`s offer for
Harbin Brewery shares,` Mr. Mackay said.
SABMiller believes that an independent Harbin Brewery is unlikely to deliver
more value for shareholders, and that unless Harbin Brewery becomes a member of
the SABMiller Group, it will be denied a combined strategy for dealing with the
competitive pressures which have affected its margins and profit growth in the
past. On an ongoing basis, an independent Harbin Brewery would have fewer
resources to invest in future growth. These factors, taken together with the
price at which the shares in Harbin Brewery traded before the announcement of
SABMiller`s offer, suggest that the shares may fall below SABMiller`s offer
price in the event that this offer is not accepted.
Anglo Chinese and ABN AMRO are the financial advisers to SABMiller for this
offer.
Key Dates
Offer document dispatch 24 May 2004
Closing date 21 June 2004
Payment date 2 July 2004
