South African Breweries (SAB), a subsidiary of the $4.1 billion South African Breweries Plc, today announced its third acquisition in the last 13 months, picking up 53 per cent controlling interest in the Rajasthan-based Rochees Breweries for around Rs 9.7 crore.
SAB will also make a simultaneous public offer to Rochees' minority shareholders in line with the Securities and Exchange Board of India's takeover regulations.
The acquisition, to be funded from SAB's internal accruals, will allow SAB to access the North Indian beer market including Delhi.
Rochees has an annual capacity of 1,10,000 hectolitres, or around 1.5 million cases, taking SAB's total capacity in India to 6 million cases. Rajasthan is the fifth largest beer consuming state in India, and growing at around 8-10 per cent annually.
Graham Mackay, chief executive officer of SAB plc, said: "This acquisition continues our strategy of investing in fast growing markets, adding to SAB's existing operations in India." He said: "SAB has now direct access to capacity as well as to markets in four of the six largest beer consuming states in India that account for over 70 per cent of the country's beer market."
Richard Rushton, managing director of SAB India, said: "The investment approach focuses on building a national presence. Acquisition of production capacity in key markets, upgrading and modernising breweries and also building indigenous brands will be cornerstone of SAB India's growth strategy."
SAB began its India operations with the acquisition of Narang Breweries in Uttar Pradesh, in October last year. Earlier this year, it acquired the Bangalore-based Mysore Breweries, which owned the Knock Out brand of beer. Consequently, it also acquired Mysore Breweries' subsidiary Pals Distillers in Aurangabad at a total cost of Rs 108 crore.
SAB has plans to invest $100 million by 2006 to increase its capacity in India. SAB is one of the companies in the running for a 26 per cent stake in Vijay Mallya's UB group's brewery business.
