Belgian brewer Interbrew said on Wednesday it had carried out an initial study of its rival South African Breweries but added that the parties had not discussed a possible Interbrew takeover.
An Interbrew statement said the company had conducted a “preliminary analysis” that it described as a routine practice to assess global brewing groups.
It added that the study might or might not lead to a bid for SAB.
But for the moment, it continued, “there has been no contact with SAB regarding such a transaction.”
The representative was reacting to a report in the Financial Times newspaper that Interbrew had drafted an offer for SAB worth 6,4-billion euros ($5,7-billion).
The newspaper said it had seen documents prepared by advisors that “indicate that an approach could be announced on December 3, with the offer closing on January 7.”
The representative comments reinforced those made earlier in the day by Interbrew chairman Hugo Powell, who denied company was in an advanced stage in any move to acquire SAB, although he added that an analysis of SAB and other brewers had been made.
South African Breweries also said it had received no takeover offers from any rival brewer.
“We have been made no offers,” SAB representative Nick Chaloner told South African public radio.
“First of all I would like to say this story about Interbrew is pure speculation,” he told SABC radio from London.
“I think SAB has a very clear strategy — which has been working very favourably for the company for the last few years — moving into the high growth developing markets around the world.
“We are intent on pursuing our own strategy, we know where we’re going and we have a very clear vision.”
He said SAB had been successful in such lucrative markets as China, eastern-Europe and the rest of Africa.
The Financial Times quoted documents as saying: “Provided that the strategic logic was clearly spelt out, we believe that the market reaction to such a deal on a merger basis would be positive.”
SAB is listed on the London stock exchange with a capitalization of 3,4-billion pounds, which suggested that “a bidder would have to offer more than four billion pounds,” the report said.
In the documents, SAB is referred to by the code name “Zulu,” while Interbrew was given the name “Ice,” according to the FT.
Interbrew, in common with other leading brewers, notably in Europe, has been active in identifying takeover targets in a highly fragmented world brewing market in recent years, but ran into competition difficulties in acquiring Bass breweries in Britain.
A bid for SAB by Interbrew, which makes Stella Artois beer, would block a global tie-up dubbed “Scar” between SAB, the British group Scottish and Newcastle, and Miller Brewing, part of the US conglomerate Philip Morris, the report said.
Interbrew would also benefit from SAB’s experience in emerging markets, particularly in China, which has huge potential.
The Belgian group is the second-biggest brewer in the world in terms of sales volume, alongside Heineken depending on the method of calculation, and markets its brands in over 110 countries. It posted a turnover of 5,6-billion euros in 2000.
The fragmented global market is dominated by Anheuser-Busch of the United States.
Interbrew acquired German brewer Beck’s in early August, after buying the British group Bass a year earlier.
Britain’s Competition Commission blocked the Bass deal in January on grounds it would reduce competition and damage consumers’ interests because it would leave Interbrew with around one third of the British beer market.
But a High Court overruled the government’s objection to the takeover on May 25, saying it was unfair to block the transaction on grounds of “public interests”.
Interbrew’s purchase of Beck’s was approved by the European Commission on October 26. – AFP