The deal is finally done. Zambia Breweries Plc. announced on 14th December 2018, that the long awaited conclusion of the sale of their interest in non-alcoholic beverages unit was finally done. The company’s completion of the disposal of the ready-to-drink business segment was padded with their disposal of shares in Kalundu Beverages Limited.
We had earlier published the article “Zambrew loses taste for Coca Cola” where we indicated that the first signal of disposal of this “liquid cola asset” was first made by the company in October of 2016 following the take of SABMiller by Anheuser-Busch Inbev (ABInBev the parent of Budweiser beer).
Now in case you missed it, there was an Extra Ordinary Meeting (EGM) back in July 2018. An extraordinary general meeting (EGM), also called a special general meeting or emergency general meeting, is a meeting other than a company’s annual general meeting (AGM) that regularly occurs among a company’s shareholders, executives and any other members. At this particular meeting, shareholders were summed by the board for the purpose of considering and, if deemed fit, passing, with or without modification, a number of resolutions.
One of the resolutions that is quoted in their latest SENS announcement is Ordinary Resolution number 1: “APPROVAL OF THE TRANSACTION IN TERMS OF THE LUSE LISTINGS REQUIREMENTS”. In accordance with the provisions of section 9 of the LuSE Listings Requirements, shareholders had to approve the transaction. According to the notice, for Ordinary Resolution 1 to be passed, votes in favour of the resolution needed to represent more than 50% of the voting rights exercised at the Extraordinary General Meeting in person or by proxy and who are entitled to exercise voting rights in respect of Ordinary Resolution 1.
The reason for Ordinary Resolution 1 was that the Transaction was categorised as a Category 1 transaction for Zambrew in terms section 9 of the LuSE Listings Requirements. Consequently, Shareholders were required to approve the Transaction by way of an ordinary resolution in terms of section 9 of the LuSE Listings Requirements. The effect of Ordinary Resolution 1, if passed, will be to grant the necessary shareholder approval of the transaction in terms of the LuSE Listings Requirements. This is all legal jargon but the effect of this was that permission had to then be sought from the COMESA Competition Commission. This was finally granted by the 4th of December 2018.
According to the SENS Announcement, the Transaction was then implemented on 14 December 2018 and accordingly the Company has now completed the disposal of its business of manufacturing, distributing, marketing and selling non-alcoholic ready-to-drink beverages (excluding the manufacturing, distribution, marketing and sale of Maheu beverages) in Zambia to Strategic Alliance J.V. (an indirect, wholly-owned subsidiary of Coca-Cola Beverages Africa Proprietary Limited, which is, in turn, majority owned by subsidiaries of The Coca-Cola Company).
It may have been a long arduous journey to the closure of this particular deal but this is the nature of complex transaction. Jose Maron, CEO Zambrew, can rest easy now knowing that he enters 2019 with one less non-alcoholic beverage to worry about. No pun intended.