E-Malt.com News article: UK & Colombia: SABMiller set to be quizzed over Grupo Bavaria takeover speculation

SABMiller PLC, is likely to be pressed on its intentions towards Colombia's Grupo Empresarial Bavaria when it announces its preliminary results next Thursday, AFX News communicated on May 13.

SABMiller, along with other brewing majors Heineken NV and InBev are all said to be eyeing Grupo Bavaria, which is Colombia's second-largest brewer. Some analysts reckon a bidding war for the Latin American company could push the price up to over 9 bln usd.

SABMiller is believed to have already held talks with Grupo Bavaria and analysts believe that a merger would be "compelling" for the South African brewer. Grupo Bavaria is the last major footprint in Latin America with dominant market positions in Colombia, Peru, Ecuador and Panama.

So far, SABMiller has refused to comment specifically on the Grupo Bavaria situation, although the group has acknowledged that it is "alive to any opportunities" that may occur. Earlier this week, SABMiller snapped up a major stake in Slovakia's Topvar brewery to extend its presence in Eastern Europe.

Apart from the takeover speculation, SABMiller's full-year results will be scrutinised for any signs of a recovery at Miller Lite after sales faltered in the 11-month period to end-February 2005.

The group said domestic sales to retailers of Miller in the period climbed just 0.9 pct, while growth of its flagship Miller Lite brand was slower than anticipated because of the weak US trading environment. Given recent weak trading statements from rival US brewers Anheuser-Busch and Molson Coors, investors will want to see how Miller is faring and whether the three-year turnaround plan is still on track.

Despite the weakness in the US market, stronger trading in Europe and South Africa -- beer volumes here were 5 pct and 4 pct ahead respectively in the 11-month period -- are expected to have offset the downturn and pre-exceptional pretax forecasts for the year to March 2005 are pitched at around 2.0-2.1 bln usd. Stockbrokers Williams de Broe is looking for profits of 2.03 bln usd, compared with the 1.7 bln usd posted last time. Earnings estimates are grouped around the 100-104 cents a share mark, compared with last time's reported figure of 77.6 cents.

Another issue facing SABMiller is the question mark over what Altria Group Inc, the American tobacco and foodstuffs company formerly known as Philip Morris, will do with its 25 pct stake in the company once the lock-up period expires at the end of June this year.

There have been suggestions that Altria may sell down its stake or off-load part of it to a third party.


14 May, 2005