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SABMiller Swallows Grolsch; DP World Boosts Offering; Credit Agricole Makes Deposit on 15% of Bankinter; China Railway Steams Toward IPO
- In yet another instance of consolidation in the global brewing industry, SABMiller PLC (SBMRF) announced yesterday (Monday) that it buying Dutch Royal Grolsch NV. SABMiller will pay $1.2 billion (816 million euros) in cash for its competitor. At that price, shares are valued at an 80% premium to the average price of Grolsch shares over the past month. In a joint statement, the companies said Grolsch would back the $70.57 per share offer. SAB Miller marketing director Nick Fell said in a statement "for anybody looking to grow their premium brand business, this is an absolute peach of a brand to own." Grolsch is the second-largest Dutch brewer after Heineken, and boasts approximately 15% of the market in The Netherlands. The acquisition will add the premium specialty brands of Spring Bock and Autumn Bock, as well as the Grolsch brand, which accounts for 90% of the company's sales. SABMiller is the third-largest brewer in he world and already offers brands such as Miller Lite, Castle, Pilsner Urquell and Peroni.
- State-owned Dubai World announced yesterday (Monday) that it would increase the size of the upcoming initial public offering of DP World Ltd., its port operator subsidiary. The offering has been increased 23% to 3.245 billion shares from the original filing for 2.822 billion. The increased demand will allow the company to raise as much as $4.96 billion if the "greenshoe" over-allotment provision of 572.7 million shares is exercised. Proceeds from the offering will be used to repay $3.5 billion of Islamic bonds that DP World's previous owners had issued. DP World currently manages 42 marine freight terminals in 22 countries around the world. The company plans to double its total capacity by 2017, as it expands throughout the United Arab Emirates (UAE) and China. The offering is expected to be priced tomorrow (Wednesday) and at approximately $1 to $1.30 per share. Shares of DP World will be the largest listing on the two-year-old Dubai International Financial Exchange. Deutsche Bank AG (DB) Merrill Lynch & Co Inc. (MER), Shuaa Capital PLC, Dubai Islamic Bank PJSC, and Millennium Finance will underwrite the offering.
- Credit Agricole SA (CRARF), the second largest bank in France, announced that it is buying a 14.99% stake in Bankinter S.A., the fifth largest bank in Spain, for $1.18 billion. Bankinter has 347 retail branches, a $52-billion loan book and deposits totaling $32 billion. Although the investment banking division of Credit Agricole has operations in Spain, this represents its first foray into the retail banking market in the country. The purchase has caused speculation that it will eventually bid for all, or a majority, of Bankinters shares, a claim Credit Agricole denies. "We do not have any intentions at this stage to launch an offer for Bankinter and hope to be able to contribute to the bank in a way that would be commensurate with our shareholding," spokesman Andrew Hazzell said.
- China Railway Group Ltd. has become the latest Chinese company to announce plans to raise capital via an initial public offering (IPO) of its stock in a range from 54 cents to 64 cents per share. In Hong Kong, prices are expected to be 65 cents to 75 cents. Proceeds from the offering will be used to buy equipment and increase capacity for railway construction. China Railways also intends to develop technology for the building of roads and bridges, as well. The company was formed in September when it acquired the assets of China Railway Engineering Corp. About 90% of its revenue [and 61% of profits] comes from infrastructure construction. The offering is considered very timely by many market observers, as one of the Chinese government's major spending plans calls for significant investment in the construction of railroads, highways and waterways, to support the increased level of trade within the country.