Carlsberg Malaysia close to Singapore deal

CARLSBERG Brewery Malaysia Bhd (Carlsberg Malaysia)(2836) said it is close to acquiring Carlsberg Singapore Pte Ltd (CSPL) for RM370 million cash.

It announced yesterday that it had entered into a share purchase agreement (SPA) to purchase all the equity shares in CSPL with Carlsberg Asia Pte Ltd (CAPL), a wholly-owned subsidiary of Carlsberg Breweries A/S (CBAS).

Carlsberg Malaysia said the purchase price in CSPL will be financed by internally generated funds.

A circular to shareholders setting out the details of the proposed acquisition will be sent to the shareholders of Carlsberg Malaysia in due course, it added.
The acquisition is expected to be completed in the fourth quarter of this year and is subject to approval by the shareholders of Carlsberg Malaysia at an extraordinary general meeting to be convened for the proposed acquisition.

In a statement, Carlsberg Malaysia chairman Datuk Lim Say Chong said the proposed acquisition and expansion in the region will benefit Carlsberg Malaysia strategically as "it is a good business fit, the beer market in Singapore is attractive and Carlsberg Singapore is a successful, well run and profitable company".

"In addition, the financial rationale for the proposed acquisition is justifiable as there are significant synergies to be realised, the investment is earnings accretive to Carlsberg Malaysia and its surplus funds will be better utilised," he said.

Under the terms of the SPA, CAPL has agreed to provide a profit guarantee to Carlsberg Malaysia for the aggregate profit after tax of CSPL of S$24 million (RM59 million) for financial years ending December 31 2009 and 2010.

CBAS, as a major shareholder of Carlsberg Malaysia, will also support the latter's proposal to distribute net dividend of between 50 per cent and 70 per cent of its distributable annual profits for financial years ending December 31 2009 to 2013.

Additionally, CBAS will waive its right to terminate the licence to use the Carlsberg trademark for 20 years.