Tanzania: Diageo buyout in Serengeti Breweries to increase country’s beer competition

Diageo Plc’s plan to acquire a stake in Serengeti Breweries Ltd., Tanzania’s second-biggest beer maker, will increase competition and production in the East African nation, Bloomberg cited Serengeti’s chairman.

The proposed acquisition of Serengeti by Diageo’s Kenyan unit, East African Breweries Ltd., “is all about supporting Tanzanian industry and consumers,” Mark Bomani, Serengeti’s chairman, said in a statement published in the Nairobi-based East African weekly newspaper today.

SABMiller and Diageo’s East African Breweries co-own Tanzania Breweries. On July 27, EABL said it wanted to end a the brewing and distribution contract with SABMiller and that it had reached a conditional agreement to buy Serengeti, a local rival of Tanzania Breweries.

On Aug. 18, SABMiller Plc won a U.K. court ruling that prevented East African Breweries from acquiring Serengeti for two years. The court said the purchase would violate the terms of SABMiller and Diageo’s partnership in the African nation.

SABMiller and Diageo’s shareholder agreement contains non- compete clauses, which were upheld by the ruling. Diageo said the ruling maintains the status quo and that arbitration will determine the case’s resolution, spokeswoman Natasha Vromen said on Aug. 18.

SABMiller made an unsuccessful takeover bid for the company, Serengeti said in a newspaper advertisement on Sept. 3. SABMiller declined to comment on possible discussions.

11 September, 2009