15 May 2002
15 May 2002
Diageo plc and South African Breweries plc subsidiaries sign agreements
Diageo plc and South African Breweries plc announce that their subsidiaries East
African Breweries Limited (EABL) and South African Breweries International
(SABI) respectively have entered into agreements relating to the operation of
their businesses in Kenya and Tanzania.
In Kenya, South African Breweries International (SABI), part of South African
Breweries plc, has closed its brewing operations at Thika. SABI will, however,
retain its presence in Kenya by taking a 20% shareholding in Kenya Breweries
Ltd, a subsidiary of East African Breweries Limited (EABL). As part of the
transaction EABL will acquire CBK. Brands previously produced and sold by CBK
will be produced and sold under licence by EABL. Diageo owns 50.03% of EABL.
In Tanzania, EABL has closed its Kibo Brewing operation. EABL will retain its
presence in Tanzania by taking a 20% holding in SABI's Tanzania Breweries Ltd.
As part of the transaction TBL will acquire Kibo Breweries Ltd. Brands
previously produced and sold by Kibo Breweries Ltd will be produced and sold
under licence by Tanzania Breweries Ltd.
The agreements are subject to certain conditions precedent including the
approval of the local regulatory authorities. No payment or compensation will be
made between the two companies. Each company is responsible for the closure
arrangements of their own breweries.
Net assets acquired by EABL in this transaction had a value of approximately US
$21.2m as at 30 September 2001 and the net assets acquired by SABI had a value
of approximately US $24.5m as at 30 June 2001.
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