EABL majority shareholder in Serengeti

October 26, 2010
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, NAIROBI, Kenya, Oct 26 – East African Breweries Limited (EABL) is now a majority shareholder in Tanzania’s second largest brewer and distributor, Serengeti Breweries.

This follows the acquisition of 51 percent of the issued share capital of Serengeti Breweries in a deal worth Sh4.8billion ($60.4million).

“SBL will form an integral part of EABL\’s regional footprint providing additional capacity to Kenya and Uganda,” announced the Company Secretary Agnes Murgor in a paid up advertisement.

The combined EABL and SBL portfolio will account for approximately 28 percent of the Tanzanian branded beer sector.

Plans to buy a stake in the Serengeti Brewery, raised a storm from South African Breweries Miller (SABMiller) that sought to stop the deal following EABL’s announcement of its intention to end a brewing and distribution agreement contract with Tanzania Breweries Limited.

The South African giant cited a breach of contract signed between the two parties in 2002 which saw SABMiller agree to sell 20 percent of TBL to EABL in exchange of a similar stake in Kenya Breweries. The deal also meant that TBL would manufacture and sell EABL brands in Tanzania.

But while the Serengeti deal which is strategic to EABL’s operations in Tanzania has been concluded, the row regarding the disposal of the 20 percent shareholding still persists.

Mrs Murgor confirmed that the company has been holding talks with the Capital Markets and Securities Authority of Tanzania, the Dar es Salaam Stock Exchange and TBL over the matter but had not reached an amicable solution.

“These discussions are at a preliminary stage and until a structure for the disposal has been agreed and a further announcement regarding this matter is made, shareholders of EABL and other investors are advised to exercise caution when dealing in the firm’s ordinary shares on the Nairobi Stock Exchange, the Dar es Salaam Stock Exchange and the Uganda Securities Exchange,” the company cautioned.
 

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