South Africa & Canada: SABMiller won't bid on Sleeman

Beer heavyweight SABMiller PLC will not bid for Sleeman Breweries Ltd., according to a source familiar with the matter.

Analysts had pegged the maker of Miller High Life, Peroni and Pilsner Urquell as a strong contender to purchase Sleeman, which last month revealed it was exploring strategic options, including a possible sale of the company.

According to the source, SABMiller is "not looking at [Sleeman]," and "not interested in the business."

With four breweries and a national distribution system, analysts had suggested Sleeman could provide SABMiller with turnkey access to the slowing but profitable Canadian beer market.

Miller Brewing Co., the company's U.S. division, is currently locked in a bitter legal dispute with Molson Coors Brewing Co. over the distribution of the Miller brands in Canada.

Miller alleges Molson is ignoring the promotion of Miller's labels in favour of Coors Light.

If the legal battle were to be resolved, Miller could buy Sleeman and use the Guelph, Ontario-based company's facilities to brew and distribute brands including Miller Lite and Miller Genuine Draft.

But while SABMiller considered bidding for Molson and its 42-per-cent market share before it merged with Adolph Coors in 2005, the source said Sleeman's 7-per-cent market share is too small for the world's second-largest brewer to consider a deal.

Molson Coors, Labatt Brewing Co. Ltd. parent InBev SA and several private equity groups are said to be still interested in Sleeman. The company said it will open a data room within a few weeks.