SABMiller to divest stake in S African hotel, casino chain Tsogo Sun
07 July 2014
Global brewing giant SABMiller says it will divest its stake in a leading South African hotel chain Tsogo Sun.
The beer and drinks maker and also owner of around 40 per cent of Tsogo Sun, which operates casinos and hotels, now says "gaming and hotels are not core to our operations".
It will place its stake of over 300 million shares, worth some $1 billion (£580 million), on offer in late July.
However, under a special placement Tsogo Sun would be able to buy back around half of the shares for $260 million.
Under the second phase of the sale shares would be offered to institutional investors.
The BBC quoted SABMiller chief executive Alan Clarke as saying the company planned to "reinvest the proceeds in our core growth businesses, including our African operations".
With the sale of about 21 billion litres of lager worldwide, the company is the second-largest beer marker in the world.
After listing on the London Stock Exchange in 1999, it made acquisitions in Europe, Asia, Latin America and US.
The company's brands include Castle Lager, Peroni, China's Snow, and Atlas beer which is popular in South America.
The 1895 established company was originally South African-owned, created during the time of the discovery of gold and mining in the country.
Clark said SABMiller had been a supportive shareholder of Tsogo Sun since 2002, when the company transferred its existing gaming and hotel assets into Tsogo Sun as part of a landmark Black Economic Empowerment transaction, The London Evening Standard reported. He, however, added that gaming and hotels were not core to the company's operations.
He added the proceeds would be reinvested in core growth areas including Africa.
Tsogo Sun owns 13 casino complexes in South Africa, 92 hotels across Africa and the Middle East, in addition to theatres, cinemas and restaurants.