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We bid farewell to one of South Africas greatest companies over the last century, SABMiller. Shareholders voted overwhelmingly in favour of the Anheuser-Busch Inbev offer of £45 per SABMiller share. Making this deal on of the biggest take overs in history.
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Background and history of SABMiller
SAB started out life in 1886 when it started selling beer during the Johannesburg gold rush. During the gold rush loads of brewers popped up to meet demand for quenching miners' thirst. One of these brewers was Charles Glass, founder of Castle Brewery. In 1895 The South African Breweries (SAB) was founded, with its head office being the Castle Brewery. Two years later, SAB became the first industrial company to list on the Johannesburg Stock Exchange.
By 1955 SAB was one of the three biggest breweries in South Africa, alongside Ohlssons and Chandlers. 1955 saw a defining moment in SAB's history, when a change in excise duty saw beer become the most heavily-taxed beverage in South Africa. Despite being a smaller company than Ohlsson’s and Chandlers, SAB seized the opportunity to acquire their two competitors and streamline production and distribution within the sector. The acquisitions mentioned above gave SAB 98% of the beer market in South Africa.
In 1993 SAB acquired Dreher brewery in Hungary signalling the beginning of a game-changing decade of mergers and acquisitions within the sector. In 994 SAB negotiated joint control with China Resources of the second-largest brewery in mainland China– the home today of the world’s largest beer brand, Snow. In 1995 SAB acquires a majority stake in Poland’s Lech Brewery. In 1996 SAB acquired:
In 1999 SAB listes on the London Stock Exchange and acquires:
In 2000 SAB enters Indian market with acquisition of Narang Breweries
In 2001, SAB becomes the first international brewer to enter Central America when it acquires the Honduran brewer CervecerÃa Hondureña and Industrias La Constancia in El Salvador.
In 2002, SAB acquired the Miller Brewing Company, the second largest brewer in the USA. And a name change is affected to SABMiller.
In 2003 SABMiller acquires a majority interest in Italian brewer Birra Peroni S.p.A
In 2006 CR Snow Breweries, SABMiller's joint venture in China, becomes the largest brewer in China by sales volume and by brewing capacity.
In 2008 SABMiller combines Miller Brewing with the US business of Molson Coors, to create the MillerCoors joint venture.
In 2012 SABMiller, Anadolu Group and Anadolu Efes conclude a strategic alliance covering Turkey, Russia, the CIS, Central Asia and the Middle East, with SABMiller's Russian and Ukrainian beer businesses contributed to Anadolu Efes in exchange for a 24% equity stake in the enlarged Anadolu Efes group.
In 2015, SABMiller acquires the London-based Meantime Brewing Company, a pioneer in British modern craft beer.
In 2016 SABMiller shareholders vote to accept an offer from Anheuser-Busch InBev to buy all shares in SABMiller for £45 a share.
By 1955 SAB was one of the three biggest breweries in South Africa, alongside Ohlssons and Chandlers. 1955 saw a defining moment in SAB's history, when a change in excise duty saw beer become the most heavily-taxed beverage in South Africa. Despite being a smaller company than Ohlsson’s and Chandlers, SAB seized the opportunity to acquire their two competitors and streamline production and distribution within the sector. The acquisitions mentioned above gave SAB 98% of the beer market in South Africa.
In 1993 SAB acquired Dreher brewery in Hungary signalling the beginning of a game-changing decade of mergers and acquisitions within the sector. In 994 SAB negotiated joint control with China Resources of the second-largest brewery in mainland China– the home today of the world’s largest beer brand, Snow. In 1995 SAB acquires a majority stake in Poland’s Lech Brewery. In 1996 SAB acquired:
- Browary Tyskie Górny Slask S.A.
- Romanian market with the purchase of the Vultural, Ursus and Pitber breweries.
In 1999 SAB listes on the London Stock Exchange and acquires:
- Controlling interest in Plzeñský Prazdroj in the Czech Republic, owner of leading brands Pilsner Urquell, Gambrinus, Kozel and Radegast.
- Kompania Piwowarska S.A. (in Poland) is formed following the merger of Lech Browary Wielkopolski S.A. and Browary Tyskie Górny Slask S.A.
In 2000 SAB enters Indian market with acquisition of Narang Breweries
In 2001, SAB becomes the first international brewer to enter Central America when it acquires the Honduran brewer CervecerÃa Hondureña and Industrias La Constancia in El Salvador.
In 2002, SAB acquired the Miller Brewing Company, the second largest brewer in the USA. And a name change is affected to SABMiller.
In 2003 SABMiller acquires a majority interest in Italian brewer Birra Peroni S.p.A
In 2006 CR Snow Breweries, SABMiller's joint venture in China, becomes the largest brewer in China by sales volume and by brewing capacity.
In 2008 SABMiller combines Miller Brewing with the US business of Molson Coors, to create the MillerCoors joint venture.
In 2012 SABMiller, Anadolu Group and Anadolu Efes conclude a strategic alliance covering Turkey, Russia, the CIS, Central Asia and the Middle East, with SABMiller's Russian and Ukrainian beer businesses contributed to Anadolu Efes in exchange for a 24% equity stake in the enlarged Anadolu Efes group.
In 2015, SABMiller acquires the London-based Meantime Brewing Company, a pioneer in British modern craft beer.
In 2016 SABMiller shareholders vote to accept an offer from Anheuser-Busch InBev to buy all shares in SABMiller for £45 a share.
Contribution of SABMiller to SA econonmy (according to SABMiller documentation in 2010)
- SAB’s economy-wide contribution to South Africa’s gross domestic product amounted to R66.2 billion in 2009 or 3.1% of the country’s GDP.
- During the 2009/2010 fiscal year, the National Treasury received R10.2 billion in tax revenue directly from SAB in the form of corporate taxes; its employees via personal income tax; and consumers of beverages produced by SAB through, amongst others, VAT and excise duties. This accounted for 1.7% of the South African government’s total tax haul for the year.
- SAB has a workforce of 9 390 and sales revenue of R32 billion. When the economic multiplier effects of SAB’s operations are also taken into consideration, SAB and its value chain sustained more than 355,000 jobs throughout South Africa and added an estimated R28 billion to state coffers in terms of direct and indirect taxes during 2009.
- In addition to the tangible economic benefits arising from the deep employment linkages and economic output stimulated by SAB, the company also invests R60 million per annum in responsible alcohol use campaigns and CSI activities. It also implemented a ground-breaking broad-based black economic empowerment transaction, called Zenzele, worth over R7 billion in 2009.
- An estimated R94.2 billion (or 4.4%) of the country’s gross domestic product (GDP) can be traced back to the liquor industry’s manufacturing operations and capital expenditure.
- The direct impact of the liquor industry and its first round suppliers on tax revenue is estimated at R19.5 billion in 2009, with a hefty 57% derived from taxes on the production and sale of malt beer.
- The liquor industry employed an estimated 21,300 workers during 2009, and supported an additional 66 000 jobs at first round suppliers. Approximately 88% of the employees in the liquor industry and its direct suppliers are from previously disadvantaged backgrounds, and the agriculture, forestry and fishing sector derives the largest direct benefit (in terms of employment opportunities) from the liquor industry’s operations.
Remgro and Distell
Part of the sale of SABMiller to Anheuser-Busch includes SABMiller having to sell their stake in Distell (DST) in order to pass approval from South Africa's ani-trust authorities. Thus SAB will have to let go of their stake in DST. During this week, Remgro (REM) announced that they will have a rights issue to raise roughly R10billion. Will Remgro buy SAB's 27% share in DST? Remgro already owns 31% of DST and if they were to acquire SABMiller's stake they would take control of DST with a 58% shareholding.
Sad and interesting times ahead for the beer and liquor industry in South Africa. Sad that a South African legend will be no more, while others might benefit from the spoils of the take over of SABMiller by Anheuser-Busch.
Sad and interesting times ahead for the beer and liquor industry in South Africa. Sad that a South African legend will be no more, while others might benefit from the spoils of the take over of SABMiller by Anheuser-Busch.