SABMiller Set to Acquire Grolsch
No further dividends are expected to be declared prior to the completion of this Offer. The Offer values 100% of the issued and outstanding Shares of Grolsch at approximately €816 million.
19/11/07 SABMiller (SAB.L) and Grolsch (GROL) have announced that they have reached conditional agreement regarding the making, by SABMiller, of a fully financed, public cash offer to acquire all the outstanding Shares of Grolsch The offer price of €48.25 per Share of Grolsch (the “Offer”), represents a premium of 84.3% to the average closing price of Grolsch’s Shares over the last month. No further dividends are expected to be declared prior to the completion of this Offer. The Offer values 100% of the issued and outstanding Shares of Grolsch at approximately €816 million.
Grolsch is an iconic Dutch beer brand with almost 400 years of brewing heritage and a strong position in the Netherlands. It is positioned as a true Dutch beer brewed to an original recipe which is now complemented by 21st century production processes and innovative packaging. In addition to Grolsch Premium Pilsner, which accounts for over 90% of its portfolio, Grolsch also has a number of attractive brand variants including Grolsch Premium Weizen, Spring Bock and Autumn Bock as well as the Amsterdam brand.
Grolsch’s provenance, unique taste profile and existing premium positioning will play a highly complementary role in SABMiller’s international brand portfolio and better position SABMiller to grow market share in the fastest growing segment of the global beer market. The SABMiller group has the scale and reach to grow the Grolsch brand internationally via its operations which span more than 60 countries, across six continents. SABMiller’s global footprint provides opportunities to take the Grolsch brand into new geographies, particularly in developing markets where, historically, quality Northern European brands have often established the premium segment. 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 change to the existing distribution agreements for the brand in the USA, UK, Canada, Australia and certain smaller markets is anticipated at this time.
In 2004 Grolsch completed the construction of a state of the art c. 3.8 million hectolitre brewery. This brewery has sufficient capacity to accommodate significant international growth of the Grolsch brand while also providing an opportunity for SABMiller to brew its own international brands for sale in the Netherlands and for export to key markets.
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.”
Following the request of the Supervisory and Management Boards of Grolsch an employee fund worth €8 million will be established to mark the planned acquisition.
SABMiller and Grolsch expect to reach full agreement regarding the final Offering Memorandum shortly. When made, the Offer will be subject to customary conditions, including an acceptance threshold of at least 75% per cent of the outstanding Shares of Grolsch. SABMiller requires permission of the Management and Supervisory Boards of Grolsch in order to declare the public offer unconditional in the situation that less than 66.7% of the outstanding Shares have been tendered, committed and acquired. In the event that the Offer is declared unconditional and less than 95% of the total share capital is acquired, SABMiller intends to utilize available legal measures (for example a legal merger and squeeze out) in order to increase their ownership to 100% of the total share capital. The offer will not be subject to regulatory clearances.
The Offering Memorandum is expected to be published in early January 2008. Following the publication of the Offering Memorandum, Grolsch will convene an extraordinary general meeting of shareholders to inform its shareholders about the Offer and to approve certain customary resolutions that are to be adopted as a condition to the Offer.
The Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten) and the Social-Economic Council (Sociaal Economische Raad), and the relevant anti-trust authorities have been or will be informed. The relevant trade unions will be duly notified. The works council of Grolsch will be requested for advice.