Foreign brewer to buy Miller Brewing Co. for $5.6 billion, parent company says

MILWAUKEE (AP) _ South African Breweries PLC has agreed to buy Miller Brewing Co. for $5.6 billion to become the world's second-largest brewer, Miller's parent company announced Thursday. <br><br>The

Thursday, May 30th 2002, 12:00 am

By: News On 6

MILWAUKEE (AP) _ South African Breweries PLC has agreed to buy Miller Brewing Co. for $5.6 billion to become the world's second-largest brewer, Miller's parent company announced Thursday.

The new company will be called SABMiller PLC and will compete in the U.S. market with Anheuser-Busch Cos., the world's largest brewer.

The deal is expected to close in July, pending regulatory approval, said Miller parent company Philip Morris Cos.

``SABMiller will immediately become the world's second-largest brewer, with arguably the best geographic footprint among all global brewers,'' Philip Morris chief executive Louis Camilleri said in a statement.

London-based South African Breweries, brewer of Pilsner Urquell beer, will buy a 64 percent stake in Miller for $2 billion in assumed debt and $3.6 billion in stock. Philip Morris will initially keep a 36 percent stake in Miller, the company said.

SABMiller will be headquartered in London but will continue operating Miller's seven U.S. breweries, the Milwaukee Journal Sentinel reported Thursday.

``For Miller, for the most part, it's going to be business as usual,'' Miller president and chief executive John Bowlin told the newspaper.

South African Breweries is the world's fourth-largest brewer by volume, after St. Louis-based Anheuser-Busch, Belgium's Interbrew and Heineken NV of the Netherlands, according to data from 2000 compiled by British beverage consultancy Canadean. Miller ranks sixth in the world.

Philip Morris has wanted to sell its beer business because Miller Brewing has started losing market share over the past decade, analysts say.

The deal provides SAB a major operations center in the United States and reduces the company's dependency on earnings made in the rand, the weak South African currency.