SABMiller to Acquire Grolsch

Deal valued at $1.2 billion.

SABMiller plc today announced it has entered into an agreement to acquire the nearly 400-year old Dutch brewer Royal Grolsch NV.

The deal is valued at $1.2 billion.

SABMiller sees opportunities to develop the brand in a number of regions around the globe. From the release:

"SABMiller sees significant potential across Africa and Latin America, where the premium segment is still in its infancy, and in the more developed markets of Central and Eastern Europe. South Africa represents a key opportunity and with the addition of Grolsch, SABMiller will have a particularly strong portfolio of highly differentiated premium brands in that market."

No changes to existing distribution arrangements in Australia, Canada, the United Kingdom or the United States are anticipated at this time. Anheuser-Busch last year acquired distribution rights for Grolsch in the U.S.

In a conference call following the announcement, however, SABMiller Chief Financial Officer Malcolm Wyman said SABMiller "would seek to enter into discussions with [A-B] after the deal is closed."

A-B this morning sent a memo to distributors about the deal. Beer Business Daily characterized the memo as saying it was "business as usual."

Commenting on the transaction, Graham Mackay, Chief Executive of SABMiller, said: “Grolsch will provide SABMiller with a powerful addition to its international brand portfolio. Within the SABMiller family Grolsch will continue to build on almost 400 years of brewing heritage, and together we will establish new positions in the most important emerging beer markets around the world. Both companies share a passion for the brewing tradition, and we are delighted to be part of this new chapter in Grolsch’s development.”

Commenting on the transaction, Ab Pasman, Chief Executive of Grolsch, said: “In addition to financial considerations it was important for us to give a lot of attention to the interests of our employees, customers and our home region. We were doing a good job executing our independent strategy. When we were asked to consider SABMiller’s proposal the key question was if greater value could be achieved than through our own existing strategy. Since this appeared to be the case we entered into discussions and we believe that SABMiller’s intended Offer delivers benefits to all of our stakeholders. We look forward to continuing to build our position as a premium brand within the new family.”

The SABMiller release can be seen at the SABMiller web site here.

Bloomberg’s coverage of the announcement can be seen here.

Beer Business Daily’s coverage (subscription required) can be seen here.