Philip Morris Sells Miller Brewing: South African Breweries will buy Miller Brewing in a $3.6 billion stock deal that will make it the world’s second-largest brewer. The new company will be called SABMiller PLC and will compete in the U.S. market with Anheuser-Busch, the world’s largest brewer, SAB announced Thursday. Miller spokesman Michael Brophy said the acquisition would not lead to any job cuts at Miller’s seven U.S. breweries. SAB is the world’s fourth-largest brewer by volume, after Anheuser-Busch, Belgium’s Interbrew and Heineken of the Netherlands, according to British beverage consultancy Canadean. Miller ranks sixth. The deal is expected to close as early as July, pending shareholder and regulatory approval, South African Breweries said. SAB has agreed to buy a 64% stake in Miller for $3.6 billion in stock and assume $2 billion in Miller debt. Miller’s parent company, Philip Morris, would initially keep 36%. The Miller deal marks a major step in SAB’s strategy of expanding largely through acquisitions to become a top player in the consolidating global beer business. SABMiller would be headquartered in London, with Miller’s Milwaukee headquarters acting as a subsidiary, said Brophy. Philip Morris has wanted to sell its beer business because Miller has lost market share over the past decade, analysts said. Camilleri told industry analysts last fall that the tobacco and food giant’s beer business has continued to face challenges. Profits have dropped as sales declined and advertising costs increased for Miller’s strongest brands, such as Miller Lite and Miller Genuine Draft. For SAB, the deal would provide a major base in the United States and reduce its dependency on earnings made in the rand, the weak South African currency. Miller was founded in 1855 in Milwaukee, a city renowned for its breweries.(USA Today), no idea how this effects the sponsorship of the #2 Penske Racing Ford and driver Rusty Wallace(5-30-2002)
