US drier for SAB Miller
Shares in dual-listed global brewing company SABMiller fell yesterday despite a relatively strong trading statement from the group.
Despite announcing a performance in line with management expectations, the group warned that trading conditions in America were increasingly difficult. Shares in the Anglo-South African company fell by 14p to 1044p a share early yesterday.
The company said: “Miller’s American domestic sales to retailers were down by 0.3 per cent against the prior year in an environment that has become increasingly price-competitive and subject to higher input costs, both of which have affected profitability
“Sales to retailers growth in the Miller Lite franchise was offset by a net decline of other brands.”
However, the group said that its European operations were performing well with a strong performance in Poland contributing to 5 per cent organic growth in lager sales. Africa and Asia also performed well, with larger sales growing by 13 per cent. Sales were also up in South Africa.
SABMiller also announced that it had completed a deal to buy the controlling stake in Bavaria SA, south America’s second biggest brewer. The deal, which will hand SABMiller 71.8 per cent of Bavaria, is valued at $7.8bn. Announced in July, it will make SABMiller the second biggest brewer in the world after Belgium’s InBev.
The takeover was an easy sell to the shareholders, with 98.09 per cent voting in favour of the tie-up at SABMiller’s extraordinary meeting in July.
Ultimately, SABMiller intends to buy out the remaining minority shareholders in Bavaria.
Chief executive Graham Mackay said: “We are delighted Bavaria is now part of the group. This transaction reaffirms our growth profile within the brewing industry. We look forward to working with our new partners and colleagues.”
