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SABMiller deal to please state

Dec 08 2009 10:31

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Johannesburg - SABMiller's empowerment (BBBEE) transaction will enhance its compliance with government's Codes of Good Practice on Broad-Based Black Economic Empowerment, the group said on Tuesday.

The transaction - referred to as Zenzele - or "do it (for) yourself" - would result in 8.45% of its South African subsidiary, South African Breweries Limited, being held by a broad base of black participants.

"Participants will include SAB's employees, black-owned licensed liquor retailers and retail liquor licence applicants, as well as registered black-owned customers of ABI, the soft drinks division of SAB and the broader South African community through a newly established SAB Foundation," the company said in a statement.

SABMiller first announced the empowerment transaction on July 1, 2009.

However, the transaction has increased in value from the initial estimate of R6bn.

The total value of the transaction was now $988m (R7.3bn) based on a rand/dollar exchange rate of 7.39, the group said.

"The transaction size was increased largely in response to the recent rise of about 70% in SABMiller's US dollar share price, and the inclusion of a greater number of participants," SABMiller said.

It said that several factors made the transaction distinctive, including that the deal's benefits were targeted at major interest groups who had played a meaningful role in SAB's long term business success.

In addition no external bank funding was required.

SABMiller said a "meaningful" bi-annual cash dividend would be paid from year one while the transaction was "affordable" and "easily accessible" - employees and the SAB Foundation would make no upfront cash payments while qualifying retailers would make only a small cash investment.

"The group's broad-based black economic empowerment transaction in South Africa further entrenches SABMiller's long standing commitment to the country and its people, while at the same time enhancing the growth and profitability of the company," Graham Mackay, chief executive of SABMiller, said.

- Sapa

 
 
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