SABMiller in S Africa deal

SABMILLER, the world’s second largest brewer,  yesterday signed a deal to sell black investors 10 per cent of its South African business to comply with post-apartheid rules.

The deal will hand black employees and other stakeholders a $775m (£454m) chunk of the company’s Johnannesburg-based subsidiary, at an estimated cost of $220m  in the biggest empowerment deal in South Africa this year.

By offering shares to roughly 60,000 new shareholders in its distribution network, SABMiller hopes to defend its dominant share of the South African market and encourage legalisation on informal bars.

Chief executive of SABMiller Graham Mackay said: “We have structured this transaction to maximise benefits for all our stakeholders and to deliver genuine broad-based black economic empowerment.”

Mackay said that the deal will not rely on external bank funding and it expects to pay the new shareholders a dividend in the first of the 10-year term of the deal. After 10 years, the shares will be exchanged for shares in the London-listed parent company. Since apartheid ended, companies  must comply with the government’s policy of shifting more ownership to the black majority.