New Miller rumors
Milwaukee brewer may be on block, with SAB possible suitor
Mar 18, 2002 - New reports over the weekend indicate that Philip Morris wants to sell Milwaukee-based Miller Brewing Co., and speculation is that South African Breweries could be the buyer. SAB and Philip Morris refused to speculate on a potential Miller deal, and there were indications other European brewers including Interbrew could be interested in acquiring Miller.
A deal apparently would value Miller at $6 billion.
A merger would expand SAB's interests in more mature markets and away from its focus on developing areas. It brews two-thirds of Africa's beer, is number two in China and a major player in eastern Europe. Euro monitor International reports that beer sales around the world were up 10% last year, with 42% growth in developing eastern European markets.
While SAB has thrived in those markets it would be facing a tougher battle in the United States, where Miller is a distant No. 2 to Anheuser-Busch and losing ground. On the flip side, the new company would be the second largest in the world, behind only A-B, and a merger could allow SAB to greatly boost its earnings in a currency other than the weakening South African rand.
Presumably, SAB would also use the Miller distribution network to boost sales of some of its international brands, such as the Czech-brewed Pilsner Urquell.
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