SABMiller to buy Dutch brewer Grolsch for £580m

From The Publican

By Hamish Champ , 19-Nov-2007

Related topics: General News, Company & City News, Drinks & Brands News

SABMiller, the London and Johannesburg-listed brewer, is set to buy Dutch brewer Koninklijke Grolsch for €816m (£580m).


In a statement issued today SABMiller said the Grolsch board fully supported its offer.


SABMiller said it saw "significant additional potential" for the Grolsch brand across Africa and Latin America, "where the premium segment is still in its infancy", as well as the more developed markets of Eastern and Central Europe.


One of the top 20 drinks brands in the UK, Grolsch's current UK distributor is Coors. SABMiller said it did not anticipate any change to such arrangements "for the time being".


A spokeswoman for SABMiller said the existing distribution agreement was "a long term one" and that once it had acquired the brand "we will sit down with all our partners and enter into discussions about the future of such arrangements".


SABMiller chief executive Graham Mackay said of the Grolsch bid: "Grolsch will provide SABMiller with a powerful addition to its international brand portfolio.


"Within the SABMiller family Grolsch will continue to build on almost 400 years of brewing heritage, and together we will establish new positions in the most important emerging beer markets around the world."


Ab Pasman, chief executive of Grolsch, said: "In addition to financial considerations it was important for us to give a lot of attention to the interests of our employees, customers and our home region.


"We were doing a good job executing our independent strategy. When we were asked to consider SABMiller's proposal the key question was if greater value could be achieved than through our own existing strategy.


"Since this appeared to be the case we entered into discussions and we believe that SABMiller's intended offer delivers benefits to all of our stakeholders.


"We look forward to continuing to build our position as a premium brand within the new family."


Last year Grolsch reported turnover of €317.6m (£225m), with net profits of €19.2m (£13.6m).


Hamish Champ, City & Business editor, comments: "It is interesting to compare the nature and tone of SABMiller's move for Grolsch, compared with Carlsberg/Heineken's indicative offer for Scottish & Newcastle.


"Yes, the size of the deal is considerably smaller, but the language used by both parties radiates conciliation and an acknowledgement that such a deal is good for both sides, a far cry from the negative 'buzz' surrounding the protagonists in the S&N battle.


"Some might be tempted to point out that SABMiller is willing to stump up a premium of more than 84 per cent to Grolsch's share price, while Carlsberg/Heineken have consistently stated they think their offer, even their raised offer, with its premium of less than half that is a fair and full price.


"The market eagerly anticipates tomorrow's statement from S&N about how it proposes seeing off Carlsberg/Heineken for good. What price some kind of arrangement with another brewer; SABMiller, fr'instance?"

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