RNS Number : 3325H
18 February 2010


18 February 2010 


SABMiller announces hotels and gaming merger in South Africa

SABMiller plc announces that it has agreed to merge Tsogo Sun, its South African hotels and gaming associate, with Gold Reef Resorts Limited, a Johannesburg Stock Exchange listed business with premier gaming assets in five of South Africa's provinces, through an all-share merger.  

The transaction will be effected through the acquisition by Gold Reef of the entire issued share capital of Tsogo Sun in exchange for the issue of new shares in Gold Reef.  SABMiller will exchange its 49% interest in Tsogo Sun for a 39.7% interest in the enlarged Gold Reef/Tsogo Sun business, which will continue to be listed on the JSE with an expected market capitalisation of approximately ZAR 21 billion (USD 2.7 billion).   

The merger will create not only a premier gaming and hotels company in South Africa but a business of significant scale ranking amongst the largest listed gaming groups in the EMEA area (Europe, Middle East and Africa). The enlarged business will have an improved ability to attract new talent and resources and to capture opportunities that present themselves in the local and international gaming and hotel sectors, both in terms of organic growth and acquisition. It is estimated that the enlarged group will be the 36th largest company on the JSE, and the largest hotel and gaming company amongst its listed EMEA peers by market capitalisation as at Friday 29 January 2010.

SABMiller will benefit from the diversification of the enlarged group's earnings, geographies and market segments through exposure to a more diversified portfolio of assets and income streams. The enlarged group will be well positioned to benefit from improving economic conditions and increasing consumer spending across various regions in South Africa, and from improved access to additional sources of capital, including a greater presence and profile in the equity markets, and the South African bank loan and debt capital markets.  A strengthened balance sheet with low debt levels and high cash generation, along with the benefits of diversification, will also facilitate further growth.

Commenting on the transaction, Graham Mackay, Chief Executive of SABMiller said:

"In 2002, we facilitated a landmark Black Economic Empowerment transaction by transferring our existing gaming and hotel assets into Tsogo Sun.  We have been very satisfied with the development of our partnership with Tsogo Investments since then, and we are very pleased today to see it enter a new phase with this value accretive transaction, which has our full support."


Completion of the merger is subject to customary conditions precedent, including the passing of all requisite resolutions to approve the merger by the shareholders of Gold Reef and by the shareholders of Hosken Consolidated Investments Limited (the indirect owner of 51% of Tsogo Sun); the South African Securities Regulation Panel dispensing with the obligation on SABMiller and Hosken to make a mandatory offer for Gold Reef under the South African Securities Regulation Code on Takeovers and Mergers; the approval of the JSE for the listing of the new Gold Reef shares; consents from Tsogo Sun's and Gold Reef's lending banks; and all applicable regulatory and statutory approvals having been obtained from, amongst others, the South African competition authorities and relevant South African gambling boards. 


Notes to editors:

About SABMiller plc

SABMiller is one of the world's largest brewers with brewing interests and distribution agreements across six continents. The group's wide portfolio of brands includes premium international beers such as Grolsch, Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as market-leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the largest bottlers of Coca-Cola products in the world.

In the year ended 31 March 2009, the group reported US$3,405 million in adjusted pre-tax profit and group revenue of US$25,302 million. SABMiller is listed on the London and Johannesburg stock exchanges.

About Tsogo Sun

Tsogo Sun is a hotel, gaming and entertainment company with operations throughout Africa, the Middle East and the Seychelles. Tsogo Sun has interests in the following gaming resorts in South Africa (with Tsogo Sun's percentage ownership indicated in brackets):

·              Montecasino, Gauteng                                                        (100.00%)

·              Suncoast Casino and Entertainment World, KwaZulu-Natal      (73.50%)

·              The Ridge Casino, Mpumalanga                                            (100.00%)

·              Emnotweni Casino, Mpumalanga                                           (100.00%)

·              Hemmingways Casino, Eastern Cape                                      (80.00%)

·              Caledon Casino, Western Cape                                             (100.00%)

·              Century Casino Newcastle, KwaZulu-Natal                             (100.00%)

Tsogo Sun also owns the Southern Sun hotels group, which is one of the largest hotel groups in South Africa and is also one of the largest timeshare operators in South Africa.  By the end of 2010, the Tsogo Sun Group expects to operate 90 hotels with 14,438 rooms in 9 countries across Africa and the Middle East.  Southern Sun is the only South African hotel group to operate across the deluxe to budget segments of the hotel market with brands including Southern Sun, Garden Court, Sun Square and Stayeasy.

For the six months ended 30 September 2009, Tsogo Sun generated revenue of R2.9 billion and earnings before interest, tax, depreciation, amortisation and rentals (EBITDAR) of R1.1 billion.

In addition to the gaming assets described above, Tsogo Sun owns 24.9% of Gold Reef, and controls 34.9% of the voting interest in Gold Reef pursuant to a voting pool agreement entered into with certain Black Economic Empowerment ("BEE") Gold Reef shareholders.

About Gold Reef

Gold Reef is a JSE-listed gaming and entertainment with interests in the following resorts around South Africa (with Gold Reef's percentage ownership indicated in brackets):

·              Gold Reef City Casino and Theme Park, Gauteng       (100.00%)

·              Silverstar Casino, Gauteng                                        (100.00%)

·              Golden Horse Casino, KwaZulu-Natal                         (100.00%)

·              Mykonos Casino, Western Cape                                  (70.36%)

·              Garden Route Casino, Western Cape                           (85.00%)

·              Goldfields Casino, Free State                                     (100.00%)

·              Queens Casino, Eastern Cape                                     (25.10%)

Gold Reef generated R1.1 billion in revenue and R0.4 billion in earnings before interest, tax, depreciation, amortisation and rentals ("EBITDAR") for the six months ended 30 June 2009. 

Gold Reef is listed on the securities exchange operated by JSE Limited ("JSE") with a market capitalisation (excluding treasury shares) of R5.3 billion as at Friday, 29 January 2010.

This announcement is available on the company website: www.sabmiller.com

High resolution images are available for the media to view and download free of charge from the News and Media section of www.sabmiller.com or www.newscast.co.uk


SABMiller plc

Tel: +44 20 7659 0100

Sue Clark

Director of Corporate Affairs

Tel: +44 20 7659 0184

Gary Leibowitz

Senior Vice President, Investor Relations

Tel: +44 20 7659 0174

Nigel Fairbrass

Head of Media Relations

Tel: +44 7799 894265

This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of SABMiller plc (the "Company") or any of its affiliates in any jurisdiction or an inducement to enter into investment activity.

This announcement includes "forward-looking statements".  These statements may contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning.  All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements.  These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.  These forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future.  These forward-looking statements speak only as at the date of this announcement.  The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Any information contained in this announcement on the price at which the Company's securities have been bought or sold in the past, or on the yield on such securities, should not be relied upon as a guide to future performance.

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