Colombia: No sale of Bavaria is imminent, but a deal may be reached by the end of 2005
An investment fund owned by the chairman of Colombian brewer Bavaria said on Thursday, June 23, that no sale of the company was imminent, but that a deal may be reached by the end of 2005, according to Reuters. Analysts have estimated that Bavaria is worth around $6.8 billion, including some $1.7 billion in debt, Reuters said
"A date has not been set for any transaction and no offer has materialized," said Energetic and Financial Investment (EFI) in a letter to the president of the company. EFI is owned by Julio Mario Santo Domingo, chairman of Bavaria's board. "We hope that before the end of the year we will complete an operation in relation to our investment," the EFI letter, posted on the Website of Colombia's Stock Market Superintendency, said.
Bavaria, which has the dominant market share for beer in Colombia, Ecuador, Peru and Panama, has attracted interest from a host of international brewers because it represents the last major opportunity to gain large-scale access to Latin America.
Citing local newspaper stories recounting talk of an impending deal, regulators at the Superintendency sent a letter earlier this week to Santo Domingo asking him for information about any of the brewer's ongoing negotiations
EFI, which owns 1.76 % of Bavaria, acts as a spokesman for Santo Domingo, who, through other investments, controls about 70 percent of Bavaria.
The Colombian regulators asked Santo Domingo about recent market-moving rumors that London-based brewer SABMiller plans to buy the company.
Since Bavaria went on the auction block in January, its shares have nearly doubled to 48,000 pesos.
SABMiller is edging toward clinching a deal to buy Colombia's biggest brewer for $7 billion, including debt, and hopes to wrap it up next month, sources close to the situation told Reuters on Monday.
SABMiller and Dutch beer maker Heineken NV are leading the race for South America's second-largest brewer, but SABMiller is expected to offer better terms.
Both European brewers have been asked to renew their interest in Bavaria and put forward firm proposals to acquire the Bogota-based company before the end of this month. That could accelerate the long-running deal process, the sources said.
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