Tanzania: Brewer to sell 20pc shares

Dar es Salaam. SABMiller Plc, a manufacturer of beverages, said yesterday that its subsidiary SABMiller Africa BV has agreed to sell its 20 per cent shareholding in Kenya Breweries Ltd or KBL to East African Breweries Ltd (EABL), for cash consideration of $225 million.

The deal is subject to EABL disposing of its 20 per cent shareholding in Tanzania Breweries Ltd by way of a public offer through the Dar-es-Salaam Stock Exchange.Controlled by Britain's Diageo, EABL announced in 2009 its intention of ending a brewing and distribution deal with SABMiller through Tanzania Breweries.

"EABL ... has agreed to purchase all of SABMiller Africa BV's 20 percent shareholding in Kenya Breweries Limited (KBL) for cash consideration of the US dollar equivalent of Ksh19.53 billion, subject to disposal of its 20 percent shareholding in Tanzania Breweries Limited by way of public offer," EABL said in a statement published in newspapers.

"KBL has also agreed to terminate a brewing and distribution agreement with SABMiller International BV and will cease to distribute SABMiller's brands in Kenya after a short transitional period," it said.EABL and SABMiller entered a deal some 10 years ago that allowed SABMiller to sell EABL brands through Tanzania Breweries Ltd TBL.TZ in Tanzania, with EABL reciprocating and brewing and marketing SABMiller products such as Castle Lager in Kenya.

In late 2010, EABL acquired a 51 percent stake in another Tanzanian brewer, Serengeti Breweries Ltd at a cost of $60.4 million. The brewer says the KBL plant has a total brewing capacity of 2,500,000 hectolitres per year.

EABL added that it was still working on a sale process for its 20 percent stake in TBL."Pending further announcements regarding these matters, shareholders of EABL and other investors are advised to exercise caution when dealing with EABL's ordinary shares," it said.Its shares are listed on the Nairobi Stock Exchange, Dar es Salaam Stock Exchange and Uganda Securities Exchange. ($1=86.80 Kenyan shillings).