World No. 2 brewer SABMiller will issue 10 percent of its South African unit to black investors in a deal worth $750 million in line with the country's affirmative action rules, it said on Wednesday.
By Rebecca Harrison
The London-based brewer of Miller Lite, Peroni and Castle beers said the economic cost of the deal to SABMiller would be about $220 million. It would not require external bank funding and investors would have to inject a small amount of cash.
The deal is expected to become effective in the financial year beginning on 1 April 2010, so will not impact the group's earnings for this financial year.
At the end of the 10-year transaction period, the shares in local unit South African Breweries would be exchanged for SABMiller shares.
Companies in South Africa have to meet quotas on black ownership, employment and procurement as part of a government drive to shift more of the mostly white-controlled economy into the hands of the black majority.
SABMiller said those benefiting from the deal included black-owned liquor retailers and liquor licence applicants, as well as black-owned customers of ABI, its soft drinks division.
(Reporting by Rebecca Harrison; Editing by Marius Bosch)
JOHANNESBURG (Reuters)