SA Breweries to list on London Stock Exchange

SOUTH AFRICAN Breweries, which produces the Castle brand of lager in southern Africa, is planning a listing on the London Stock Exchange that could value the Johannesburg-based company at around pounds 3.5bn.

The valuation would qualify the company for automatic inclusion in the FTSE100. The group will start a London roadshow in February, with the listing planned to go ahead in March. The move follows a similar decision by Anglo-American, the mining and financial group, to change its domicile.

The float will provide a test for investment funds' appetite for new issues, which has been shaken by the volatility in global stock markets since the summer. However, the company said it was "cautiously hopeful" that it would receive a positive response from potential investors.

South African Breweries will consist principally of its interests in brewing, Coca-Cola bottling, hotels and gaming. Prior to the float SAB plans to sell its other businesses, which include department stores in Africa as well as a plate-glass business. SAB owns around 65 per cent of Edgars, a clothing and footwear retailer, and 67 per cent of Conshu, which has interests in clothing, footwear and textiles.

SAB has been saying for several months that it would like to divest most of its non-core interests to focus on brewing and other related industries. If they cannot be sold before the float goes ahead, the shares will be distributed to shareholders.

The group said it was seeking a London listing to enable it to gain access to major capital markets.

"We believe this will enable us to compete on the world stage," the company said.

It plans to raise funds to broaden the international scope of its brewing operations. There are no plans to extend the limited distribution of its brands in the UK. It is expected to concentrate instead on central and Eastern Europe, as well as China.

SAB reported group profits of $707m (pounds 428m) last year on sales of $5.8bn (pounds 3.55bn).

SAB was the first industrial company to be listed on the Johannesburg Stock Exchange in 1897.