Brewer to seek London listing

SOUTH AFRICAN BREWERIES, the country's second-biggest company by market value, may soon join mining giants Anglo-American and Billiton in the financial and administrative exodus from Johannesburg for a primary stock exchange listing in London.

In the wake of Anglo's dramatic announcement on Thursday, SAB managing director Graham Mackay confirmed in an interview that the company is considering such a move and would probably announce a decision before the end of the year.

The brewer believes that shifting the primary listing to London would make it easier to raise money to finance its planned expansion into eastern Europe and China. It could also reduce capital costs. South African prime lending rates have risen more than 30 per cent since 1 January.

"I don't think SAB needs any more convincing to move. As a FT-SE 100 stock, they will have better access to institutional investor funds and this will supposedly remove their emerging market tag," said Wynand Van Zyl, an analyst with BOE Securities.

The maker of such beers as Castle, Ohlssons, and Castle Milk stout, SAB dominates South Africa's brewing sector with about 98 per cent of the market.

It is the world's fifth largest brewer by volume, trailing America's Anheuser-Busch, Heineken, the Miller Brewing unit of Philip Morris and Belgium's Interbrew.

If SAB, which has a market capitalisation of about R35.23bn (pounds 3.7bn), moves its primary listing, it would be the third large loss for the Johannesburg Stock Exchange.

On Thursday, Anglo announced that it was moving to London and forming a new UK-based company called Anglo American plc. Last year, when Gencor, spun off its Billiton plc unit, its chose London instead of Johannesburg for the company's initial public offering, making Billiton the UK's second largest mining company after Rio Tinto.

SAB shares have fallen by almost 45 per cent since April. The company has been hurt by concern about investments in emerging market securities and falling beverage consumption as economic growth slows worldwide. Copyright: IOS & Bloomberg