Johannesburg | Friday
BEER giant South African Breweries on Thursday announced its entry into the Central American market, buying the sole brewer in Honduras and forming a new company in El Salvador.
SAB said it has bought a 97% interest in Cerveceria Hondurena S.A. (CHSA), sole brewer and largest soft drinks bottler in Honduras.
It said it had bought CHSA from the Dole Food Company for a cash consideration of $537-million on a debt free basis, the South African news agency Sapa reported.
SAB will contribute an equity of $507-million and debt of $30-million in its interest in CHSA.
It also announced the formation of BevCo in El Salvador, which it will operate with a prominent local family consortium that has wide-ranging commercial interests in South America.
The consortium, through a separate holding company CAB, controls ESBB the sole brewer and largest soft drinks bottler and water business in El Salvador.
CAB will contribute between 80 and 100% of ESBB to form BevCo.
SAB chief executive Graham Mackay said on Thursday the acquisition was “consistent with our stated strategy of investing in growth markets.”
“BevCo will give us the leading position in the growing beer and soft drinks markets of El Salvador and Honduras and we believe we can achieve significant revenue growth and substantial cost savings while working closely with our strong local partner.
“The acquisition is expected to be earnings enhancing in its first financial year,” he added.
The London-listed SAB is the fifth largest brewer in the world and operates 85 breweries in 22 countries, with a global beverage volume of 86-million hectolitres.
According to company figures, it has had a shareholder return of 10,7% since listing in March 1999 and more than $330-million in net capital expenditure in 2001.
On Wednesday Belgian brewing giant Interbrew said it had carried out an initial study of rival SAB but added that the routine assessment might or might not lead to a bid for the company.
Interbrew was reacting to a report in the Financial Times newspaper that it had drafted an offer for SAB worth 6,4-billion euros ($5,7-billion dollars).
SAB dismissed the report as “pure speculation”. -AFP