Home
Menu
Top industry news
Brewery news
Malt news
Barley news
Hops news
More news
All news
Search news archive
Publish your news
News calendar
News by countries


#
E-Malt.com News article: UK: SABMiller is going to continue to see major transactions taking place

SABMiller PLC Chief Financial Officer Malcolm Wyman announced on June 9 there will be further consolidation in the global beer industry despite recent large mergers. Malcolm Wyman said: "We're going to continue to see major transactions taking place; consolidation is underway," according to Dow Jones Newswires. SABMiller ranks as the world's third largest brewer by volume, after Anheuser-Busch Cos. of the United States and Belgium-based InBev.

Wyman wouldn't mention which companies look attractive as possible acquisition targets, but said as one of the major global brewers, SABMiller can look at all major opportunities that arise. It was the product of a major sector consolidation itself, when South African Breweries bought Miller Brewing of the United States in 2002.

There has been speculation that SABMiller is interested in buying Colombia's Grupo Empresarial Bavaria, but Wyman wouldn't comment on specific deals. Analysts have suggested a price range of $7.5 billion (euro6.1 billion) to $9 billion (euro7.3 billion), although there are fears the potential benefits are limited. It is also thought Heineken NV is interested in the Colombian brewer.

There have been several huge deals in the beer industry of late. Interest in Bavaria comes just months after Belgian brewer Interbrew sealed a complex $11 billion (EUR 9 billion) cash-and-stock deal to take control of Latin America's biggest brewer, Brazil's Companhia de Bebidas das Americas, or AmBev. Now known as Inbev, the merged company is the world's biggest brewer by volume and the dominant player in Latin America's fast-growing beer market.

Bavaria, with its dominant market share in Colombia, Panama, Ecuador and Peru, is Inbev's only serious rival in South America and the last easy entry point for global brewers anxious to offset tough conditions in mature home markets in the U.S. and Europe.

SABMiller said at the time of its full-year results it's been under pressure from the rise of the so-called "cocktail culture" in the United States. Wyman said although spirits have had a good run there, it "looks as though the extent of the trend seems to be slowing down."

"There's a lot more activity in the beer segment now, with new brands being promoted in bars across the country," he said. SAB's acquisition of Miller has made U.S. beer companies like Anheuser-Busch improve their game, as SABMiller has upped competitive pressure by investing in Miller's brands, he added.

The U.S. beer industry is set for intensified competition over the summer. Anheuser-Busch recently said it intends to "do whatever is necessary" to gain market share there. But Wyman said there is unlikely to be a price war in the U.S. market. Anheuser-Busch has been competing aggressively on price and has said it will use price as a weapon, but SABMiller is still managing to expand the Miller Lite brand, Wyman said. SABMiller will match Anheuser-Busch's prices but won't drop below them, he added.


11 June, 2005

   
| Mail your friend | Printer friendly |
Copyright © E-Malt s.a., 2001-2008