UK: SABMiller decided not to bid for S&N

Global brewer SABMiller said it had decided against a bid for rival Scottish & Newcastle, whose shares had climbed earlier on market talk of a rival takeover, Reuters reported February 21.

SABMiller said in a statement that in line with its normal practice of evaluating all strategic opportunities "it undertook a preliminary evaluation of the Scottish & Newcastle Plc Group but decided not to take further action".

S&N has already agreed a takeover from Carlsberg and Heineken.

Earlier, market talk of a rival bid at 850 pence a S&N share, worth 8.3 billion pounds, caused the Edinburgh-based brewer's shares to rise to a high of 811-1/2 pence before closing up 2.5 percent at 807-1/2.

A spokesman for S&N declined to comment.

Analysts had said there would be difficulties for a bid by SABMiller on competition grounds, while SABMiller would not get full control of Russia-based Baltic Beverages Holding (BBH) which is 50-50 owned by S&N and Carlsberg.

Last month, Carlsberg and Heineken agreed a joint 800p cash breakup bid for S&N valuing the brewer of Foster's and Kronenbourg at 7.8 billion pounds.

Analysts had said a SABMiller bid could raise competition problems in India and Russia, and also upset SABMiller's relations with Molson Coors, where the two are intending to set up a joint venture in the United States.

S&N and Molson Coors are major competitors in the British beer market.

"I doubt if SABMiller could get the cost savings that Carlsberg and Heineken can, while SABMiller would want full control of the Russian business," said one analyst.

SABMiller shares closed 4.3 percent lower at 10.82 pounds.

22 February, 2008