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SAB
SOSAB
SAB - SABMiller joint venture to acquire Blue Sword minorities
SABMiller Plc
JSEALPHA CODE: SAB
ISSUER CODE SOSAB
ISIN CODE GB0004835483
4 January 2007
SABMiller joint venture to acquire Blue Sword minorities
China Resources Snow Breweries Limited ("CR Snow"), SABMiller`s joint
venture in China with China Resources Enterprise, Limited ("CRE"), has
announced that it has agreed to acquire a 38% equity interest in 14
breweries based in the Sichuan province in South West China (together the
"Sichuan Breweries") for a total cash consideration of US$320 million. The
remaining 62% equity interest in the Sichuan Breweries is already owned by
CR Snow. As part of the transaction, CR Snow will also acquire the rights
to the "Blue Sword" trademarks, as well as acquiring a 100% equity interest
in the Guizhou Waterfall Brewery Limited ("Blue Sword Guizhou") in Guiyang
City, which has installed capacity of 800,000 hectolitres.
The transaction will be effected via the acquisition of a 100% interest in
Blue Sword (Group) Company Limited or "Blue Sword Group", a holding company
located in the Shifang City in the Sichuan province. Prior to completion of
the transaction, various non-brewery related assets held by the Blue Sword
Group will be transferred out of the company. For the year ended 31 December
2005, unaudited net profit attributable to the assets subject to the
acquisition amounted to US$12.4 million, up c. 40% on the previous year.
The Sichuan Breweries joint-venture was formed in October 2001 through a
strategic agreement between CRE Beverage Ltd (now named as China Resources
Snow Breweries Limited) and Blue Sword (Group) Company Limited, creating the
leading brewer in Sichuan. The brewing operations in the region at the time
consisted of 12 plants with a further two breweries subsequently added.
Completion of the transaction is expected to take place in early 2007,
following satisfaction of pre-closing conditions.
Mr. Andre Parker, Managing Director of SABMiller Africa & Asia, said; "This
acquisition further demonstrates CR Snow`s commitment to invest in prominent
local brands which not only complements our national branding strategy, but
strengthens our leading positions throughout regional markets."
Mr. Mark Chen, Managing Director of China Resources Enterprise, Limited
said; "We are very pleased that we can consolidate our brewery interests in
Sichuan. Sichuan is a major profit centre for CR Snow and its contribution
has been rapidly rising on expanding market share. The acquisition will
boost our operational efficiency in the western and south-western regions
and strengthen our brand portfolio, underscoring our confidence for stronger
returns in the coming years."
Sichuan province has a population of over 87 million inhabitants and is an
area where beer demand is already strong. The Sichuan Breweries achieved a
market share of c. 70% in the province last year and are well positioned to
capitalise further on increasing demand with additional capacity production
facilities planned. Distribution channels are also well established with an
extensive sales network that covers neighbouring regions such as Chongqing,
Yunnan, Guizhou, Tibet, Shaanxi and Gansu.
Guizhou is a mountainous province, bordered to the north by Sichuan and with
a relatively small population of 39 million people. Despite low current beer
consumption, there is clear opportunity for future growth, particularly
through improving access to the SNOW brand in the local market. At present,
CR Snow does not have a plant in the region, though production of SNOW at
the Guizhou brewery will commence on completion.
Annual production capacity at the Sichuan Breweries in 2005 was 14 million
hectolitres. Construction of additional capacity is currently underway and
will be completed in mid-2007, which will add a further 1.6 million
hectolitres to total capacity. The annual production capacity at the Guizhou
brewery was 800,000 hectolitres over the same period.
Ends
Notes to editors:
About China Resources Snow Breweries Limited
China Resources Snow Breweries Limited was established in 1993 and became a
joint venture with SABMiller plc in 1994. The company is engaged in the
production, sales and marketing of beer and beverages in China. Its
shareholders are China Resources Enterprise, Limited and SABMiller Asia
Limited, a subsidiary of SABMiller plc. China Resources Enterprise, Limited
has a 51% interest in China Resources Snow Breweries Limited while SABMiller
Asia Limited holds the remaining 49% interest. It operates more than 40
breweries in the Chinese Mainland with a total sales volume of about 39.5
million hectolitres in 2005.
About SABMiller plc
SABMiller plc is one of the world`s largest brewers with brewing interests
or distribution agreements in over 60 countries across five continents. The
group`s brands include premium international beers such as Miller Genuine
Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional
range of market leading local brands. Outside the USA, SABMiller plc is
also one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2006, the group reported US$15,307 million in
revenues and profit before tax of US$2,453 million. SABMiller plc is listed
on the London and Johannesburg stock exchanges.
About China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on the Hong Kong Stock
Exchange and is also traded on SEAQ International of the London Stock
Exchange. It is one of the constituent stocks of the Hang Seng Index in
Hong Kong. The Group focuses on the consumer businesses in both the Chinese
Mainland and Hong Kong, with core activities being retail, beverage, food
processing and distribution, textile and property investment.
This announcement is available on www.sabmiller.com
Enquiries:
SABMiller plc Tel: +44 20 7659 0100
Sue Clark Director of Corporate
Affairs Tel: +44 20 7659 0184
Gary Leibowitz Senior Vice President,
Investor Relations Tel: +44 20 7659 0119
Nigel Fairbrass Head of Media Relations Tel: +44 20 7659 0105
This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire securities of SABMiller plc (the
"Company") or any of its affiliates in any jurisdiction or an inducement to
enter into investment activity.
This document includes "forward-looking statements". These statements may
contain the words "anticipate", "believe", "intend", "estimate", "expect"
and words of similar meaning. All statements other than statements of
historical facts included in this announcement, including, without
limitation, those regarding the Company`s financial position, business
strategy, plans and objectives of management for future operations
(including development plans and objectives relating to the Company`s
products and services) are forward-looking statements. These forward-
looking statements involve known and unknown risks, uncertainties and other
important factors that could cause the actual results, performance or
achievements of the Company to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. These forward-looking statements are based on numerous
assumptions regarding the Company`s present and future business strategies
and the environment in which the Company will operate in the future. These
forward-looking statements speak only as at the date of this announcement.
The Company expressly disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Company`s expectations with regard
thereto or any change in events, conditions or circumstances on which any
such statement is based.
Any information contained in this announcement on the price at which the
Company`s securities have been bought or sold in the past, or on the yield
on such securities, should not be relied upon as a guide to future
performance.
Date: 04/01/2007 09:00:01 Produced by the JSE SENS Department.
