SABMiller buys out SWC in JV

OVERSEAS FIRMS BET ON INDIAN MARKET

In a move that will increase the world's third largest brewer SABMiller plc's stronghold in the fast growing Asian markets, the company today acquired the Shaw Wallace group's 50 per cent stake in the Indian beer joint venture Shaw Wallace Breweries (SWB) for an undisclosed sum.

The acquisition, done through SABMiller's Indian arm, Mysore Breweries Ltd, would enable it to control a 99 per cent stake in the venture.

Before the acquisition, SABMiller controlled a 49 per cent stake with the remaining 1 per cent held by third-party minority investors. SABMiller had invested $132.8 million for its stake in the venture with Shaw Wallace.

The venture, which was formed in 2003, was the second largest beer maker in the country behind United Breweries with sales volumes of 2.4 million hectolitres in 2004-05, representing a growth of 12 per cent over 2003-04.

In the 7 million hectolitre beer market SWB had a share of nearly 34 per cent. On completion of the transaction, the brewing operations had net assets of $37 million.

According to SABMiller officials in London, the acquisition is part of the company's consolidation plans in the Indian beer market.

'Beer consumption in India remains around one litre per person per year as against 20 litres in comparable developing markets.

With the GDP growing over 6 per cent, India has the economic potential to be a leading beer market and SABMiller is well placed to benefit from this growth,' said Andre Parker, managing director (Asia and Africa), SABMiller in a statement from Johannesburg.

SWB's brewing operations comprise 10 breweries which manufacture bestselling brands such as Royal Challenge, Haywards, Castle Lager and Knock Out.

SABMiller has operated in India since 2000 when it bought over Narang Breweries in UP. Subsequently in 2001, it acquired a controlling stake in MBL.

In 2004-05 SABMiller globally had sales of $14.5 billion and it operated in 40 countries. Outside of the US, the company is also one of the largest bottlers for Coca-Cola's products in the world.