SABMiller in strategic alliance with Anadolu Efes
Business Live - Oct 19th 2011, 10:36
International brewer SABMiller and Anadolu Efes on Wednesday unveiled plans to form a strategic alliance that would create an entity that would hold the number two market position, in value terms, in the Russian beer market.
In terms of the strategic alliance, Anadolu Efes will be the vehicle for both groups' investments in the territory with SABMiller transferring its beer businesses in Russia and Ukraine to Anadolu Efes.
SABMiller said in a statement to the JSE that the two parties have put an enterprise value of $1.9 billion on its Russian and Ukrainian businesses.
Explaining the details, SABMiller said in exchange for the transfer of these businesses it would receive a loan note.
Subject to Anadolu Efes shareholders' approval of a non pre-emptive capital increase, Anadolu Efes would issue 142.1 million new shares to SABMiller, representing a 24% equity stake in the enlarged Anadolu Efes group.
The proceeds of the capital increase would then be used to immediately redeem the loan note.
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.
Besides taking the number two slot in the Russian market, the enlarged Anadolu Efes will have an 89% share of the Turkish beer market and a 69% share of the carbonated soft drinks market via Anadolu Efes's 50.3% interest in Coca-Cola Icecek.
It will also have a leading market position in the beer growth markets of Kazakhstan, Moldova and Georgia.
"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." said SABMiller chief executive Graham Mackay.
"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," Mackay added.
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