E-Malt.com News article: 3429

New Zealand: Asia Pacific Breweries Limited (APB) announced on October 10 the completion of its compulsory acquisition of the remaining minority interests in DB Breweries Limited (DB), thereby gaining 100% control of DB's share capital successfully. APB's stake in DB crossed the 90% mark barely a month after it announced its intention, on 26 July 2004, to purchase the remaining shares, comprising 23.09%, or 11,643,598 shares in DB at NZ$9.50 per share, which it did not already own. This represented a 20.25% premium to the last traded price before the offer, which was NZ$7.90. The bid values DB at NZ$479 million. APB will be utilizing internal cash resources to fund the purchase cost of about NZ$111 million.

In pre-bid negotiations, the second largest shareholder in DB - Accident Compensation Corporation (7.99%) and several other investors, namely Challenger Financial Services Group Limited (0.11%), M M Benjamin Family Trust (0.20%), E B Benjamin Family Trust (0.04%) and J West Holdings Limited (1.85%), agreed to sell their entire holdings into the offer. The acceptance by these major shareholders accelerated the acquisition process by significantly increasing APB's relevant interest in DB's capital to 87.1%.

APB proceeded with a compulsory acquisition after the offer closed on 6 September and this led to the subsequent de-listing of DB from the New Zealand Stock Exchange a week later.

Mr Koh Poh Tiong, Chief Executive Officer, APB, said "The successful acquisition of DB marks the beginning of the next stage of our long-term involvement with the company. Over the years, APB has worked closely with the board and management of DB to restructure it into one that is focused on its core competencies i.e. the production and marketing of quality beers. This has led to sizeable value creation for the company and its shareholders. Following the acquisition of the remaining minority shares in DB, we will continue to see well-loved heritage beers, like Tui, Monteith's and DB Draught, remaining a significant part of the New Zealand culture."

Shareholders representing approximately 0.5% of DB's share capital who did not send in their transfer forms by the close of the offer, will shortly receive a claim form from DB in order to receive their consideration. DB will hold the remaining consideration in trust until it is claimed.

Capturing 35% of the market share, DB is one of the two largest brewers in New Zealand. DB's portfolio consists of 16 international and heritage brews, including key brands such as Heineken, Tiger Beer, Tui, Export Gold, DB Draught, Monteith's and Amstel Light.

It owns and operates four breweries - Waitemata Brewery (Otahuhu, Auckland), Tui Brewery (Mangatainoka), Mainland Brewery (Timaru) and Monteith's Brewery (Greymouth) with a total production capacity of 1.87 million hls, and 14 sales offices around the country.

The beer market in New Zealand is estimated to be worth NZ$900 million per year. DB has consistently maintained its ability to generate double-digit percentage growth in revenue despite the divestment of its wine business in 2000, leading to New Zealand being one of the top three best performing markets for APB.


10 October, 2004