Castel denies bid talks with SABMiller

City A.M. Reporter
A SENIOR executive at French drinks group Castel yesterday denied reports that it was in talks to sell its African beer operations to global brewer SABMiller.

A Deutsche Bank report on Wednesday said Castel was a natural target for SABMiller’s mergers and acquisitions ambitions, and a more compelling option than acquiring the Foster’s Group beer business in Australia.

The report said Castel’s beer business could transform Africa into a truly significant growth driver for SABMiller if the French group’s controlling family were ever to put it up for sale. Shares in SABMiller, which brews Peroni, Miller Lite and Grolsch beers, rose slightly yesterday.

Castel was founded in 1949 by nine brothers and sisters and is still run by its founding president Pierre Castel, 84, and despite his reduced involvement there has been no indication that the controlling family might sell.

Analysts said a Castel link-up would make strategic sense with SABMiller strong in southern and eastern Africa such as Tanzania, Zimbabwe and Mozambique, and Castel in western Africa nations like Angola, Cameroon and Ivory Coast.

“An acquisition of Castel would be an excellent strategic move for SABMiller, given the high margins and strong per capita beer consumption growth in Africa,” said analyst Simon Hales at broker Evolution Securities.