E-Malt.com News article: 2621

Romania: SABMiller Plc, one of the world's largest brewers, has purchased an 81.1 % stake in Romanian brewer Aurora S.A. at a cost of $16.2 million (R114 million). The expected purchase of additional shares prior to closing will increase SABMiller’s share holding to at least 90%, SABMiller announced on May 10. The acquisition is conditional upon Romanian Competition Council approval and the fulfillment of certain technical requirements. The move is part of the group's aim to stay ahead of other international brewers, including Brau, Interbrew and Carlsberg, who all have a significant presence in the market, the press said.

Aurora has one brewery, located in the city of Brasov in central Romania, and a national market share of 5.2%, which put it in the top five players in the country. The brewery has an annual capacity of 680,000 hectolitres and annual sales of 659,000 hectolitres. The value of the net assets to be acquired is approximately US$16.2 million and the purchase consideration implies a 2003 EBITDA multiple of less than 5.0 times.

Aurora brewery will become SABMiller’s fourth in Romania, joining its other operations in Cluj-Napoca, Buzau, and Timisoara. Aurora’s main brands are Ciucas and a recently launched PET brand Cerbul, both of which have a strong regional presence. The acquisition offers the opportunity to grow these brands via SABMiller’s existing distribution platform. Following the transaction SABMiller will have a market share in Romania of approximately 20%, a strong number two position in the market.

Graham Mackay, Chief Executive of SABMiller, said: “This acquisition complements our existing operations in Romania and strengthens our overall position in central Europe. Aurora brings to SABMiller a strong local brand portfolio, an excellent distribution platform in central Romania, and a quality production site in a region with a rich brewing heritage. The acquisition builds on our strategy of optimising and expanding our positions in developing markets and we anticipate brand, procurement and distribution benefits from integrating Aurora with our existing Romanian operations.”

Since the late 90s beer consumption has enjoyed a steady rise in Romania and is now within sites of consumption levels in Western Europe. Currently around 55 litres of beer is consumed per capita in the country, compared to 65-70 litres per head in the EU.

SABMiller plc is one of the world’s largest brewers, with 2002/03 lager volumes in excess of 115 million hectolitres. It has a brewing presence in over 40 countries across four continents and a portfolio of strong brands and leading market shares in many of the countries in which it has brewing operations. Outside the USA, SABMiller plc is one of the largest bottlers of Coca-Cola products in the world. SABMiller has been operating in Romania since 1996 and currently runs three breweries with a total capacity of 2.1 million hectolitres, employing approximately 1,100 people. SABMiller’s existing operations are located in Cluj-Napoca, Buzau, and Timisoara, the latter acquired in 2001. These operations had combined output of 1.9 million hectolitres in calendar year 2003, representing 15.3% of the market. SABMiller’s brands in Romania include Ursus Premium, Timisoreana Lux, Miller Genuine Draft and Pilsner Urquell. The location of Aurora is in central Romania (330km from Cluj-Napoca, 180km from Buzau and 450km from Timisoara). The Romanian beer market is approximately 12.8 million hectolitres and grew by 12% in 2003.


12 May, 2004