South Africa: SABMiller to sell stake in gaming and hotel group Tsogo Sun to obtain cash for beefing up its beer business

SABMiller will sell its $1 billion stake in South Africa's top gaming and hotel group Tsogo Sun, the brewer said on July 7, giving it cash to beef up its African beer business.

The maker of Peroni and Miller Lite beers has been reviewing its 39.6 percent stake in Tsogo Sun as it concentrates on building its beer business in emerging markets, such as Africa, Asia and Latin America.

It has held the stake, now valued at $1.09 billion, since 2002 when it transferred its gaming and hotel assets to Tsogo Sun.

"Gaming and hotels are not core to our operations and we have concluded that the time is right for us to exit our investment through a transaction which is beneficial to shareholders of both SABMiller and Tsogo Sun," SABMiller Chief Executive Alan Clark said in a statement.

The brewer would reinvest the proceeds, including in its African operations, he said.

SABMiller said it would dispose of up to all of its shareholding through a placing of up to 305 million shares to South African and international institutional investors, and a buyback by Tsogo Sun of at least 130 million shares for about $260 million.

09 July, 2014