SABMiller in $1.9-billion alliance with Turkish brewer Anadolu Efes
20 Oct 2011
British brewer SABMiller Plc has entered into a strategic $1.9 billion alliance with Turkish brewer Anadolu Efes in order to become Russia's second-biggest beer maker and expand their market in Turkey, the Middle East and the CIS countries.
SABMiller, the world's second-biggest brewer by volume after Anheuser-Busch InBev, will transfer its Russian and Ukrainian businesses worth $1.9 billion to Anadolu Efes for a 24 per cent stake in the enlarged Istanbul-based company.
Although its stake will be reduced to 42.8 per cent, Anadolu Efes will control and run the enlarged company. Under the deal, SABMiller will get three seats on Efes's board and veto rights on the appointment of a chief executive, as well as rights regarding the appointment of head for the Russian and Ukrainian arms.
SABMiller has been given pre-emption rights to acquire further shares in Anadolu Efes should the brewer's controlling families choose to further dilute their stakes.
SABMiller's transfer of $1.9 billion worth of its assets, which last year had sales of $678 million, values the enlarged Turkish brewer at $7.9 billion.
The enlarged Anadolu Efes will become the second-biggest beer maker in Russia, with leading market positions in Kazakhstan, Moldova and Georgia, and a near monopoly 89 per cent market share in the Turkish beer market and 69 per cent share of the carbonated-soft-drinks market through its majority 53.2 per cent stake in Coca-Cola Icecek Sanayi AS, a soft drinks franchise that operates in Pakistan, Central Asia and the Middle East.
The companies will be able to distribute each other's brands in other areas and the transaction will lead to cost benefits of at least $120 million annually.
With a market share of 17.9 per cent in Russia, the enlarged Anadolu Efes will rank behind Carlsberg A/S's Baltika, which holds 38.4 per cent. Currently, Anadolu Efes is Russia's fourth-largest beer company by market share and SABMiller fifth.
