NAIROBI, Kenya, Jun 6 – East African Breweries Limited (EABL) has regained full control of Kenya Breweries (KBL) after buying out SABMiller Africa’s entire 20 percent stake in KBL.
The deal will see EABL’s stake in KBL increase from the current 80 percent to 100 percent, at a cost of Sh19.5 billion.
“EABL today announces that it has agreed to purchase all of SABMiller Africa BV’s 20 percent shareholding in Kenya Breweries Limited for cash consideration of the US dollar equivalent of Sh19,528,062,600,” said the Company Secretary Agnes Murgor in a paid up advertisement in the dailies.
The agreement however is subject to the disposal of EABL’s 20 percent shareholding in Tanzania Breweries Limited (TBL), which will be done through a public offer.
The brewer has been holding talks with the Capital Markets and Securities Authority of Tanzania, the Dar es Salaam Stock Exchange and TBL for a while now to work out a structure of how it would dispose its shares in the Tanzanian unit but the parties have not yet reached a consensus.
“EABL is also continuing to work on a sale process for its 20 percent shareholding in Tanzania Breweries,” said the firm.
The announcement seems to end the long protracted battle between the two giant brewers which kicked off when EABL declared its intention to end a brewing and distribution agreement contract with TBL where SABMiller holds a 52.83 percent stake.
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 with the deal on the rocks, KBL has also agreed to terminate a Brewing and Distribution agreement with SABMiller International which means that it will also cease to distribute the South African brewer’s brands such as Castle Lager in Kenya.
EABL’s interests in Tanzania will however remain intact because the company is a majority shareholder in Tanzania’s second largest beverages firm, brewer and distributor, Serengeti Breweries.
This followed its acquisition of 51 percent of the issued share capital of Serengeti Breweries in October last year in a deal that cost Sh4.8 billion ($60.4million).
While all these issues remain pending, shareholders and other investors have been advised to exercise caution when dealing with EABL’s ordinary shares on the Nairobi Stock Exchange, Dar es Salaam Stock Exchange and Uganda Securities Exchange where its shares are cross listed.
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