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16.07.2004 Business & Finance

Guinness, GBL merger will serve the interest of Ghana

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Speculation and discussion have emerged concerning the combination of two brewery giants in the country, Guinness Ghana Ltd (GGL) and Ghana Brewery Ltd (GBL), of which a few points need clarification.

Why the transaction and what are the benefits?

Both companies are independently strong, GGL's brands, Malta and Stout, are leading brands in their respective categories, and GBL's Star brand is the leading lager in the country.

Both companies have invested heavily in personnel, brewing facilities and product development. They also have successfully restructured their businesses over the last few years.

It is because both companies are in the positions of such strength that bringing them together at this time is right. It is based on combined synergies - pulling together an unrivalled portfolio of brands, technical expertise, cutting edge production processes, and top quality teams.

By bringing these synergies together, the companies can make the best out of the economies of scale. The gold mining industry has led the way here in Ghana, with the recent merger between Ghana's former Ashanti Goldfields and AngloGold of South Africa. Such mergers reduce costs whilst they increase profit margins.

Ghana has great prospects. The country boasts of one of the best performing stock markets in the world.

Opportunities abound and other alcoholic beverage producers like Kasapreko, Paramount, GIHOC, and Macharons are growing from strength to strength. SAB Miller, through its local subsidiary, Accra Brewery Limited, continues to be a worthy competitor of both GGL and GBL.

Our liberal trade policies have permitted the importation of foreign beer brands such as Tiger, Fosters, Klausthaler and ready and other drink brands such as Bacardi Breezer, Bavaria Apple Twister, Power Malt and Holsten Malt.

The combination of GGL and GBL will create a leading market player in Ghana and more importantly, Ghana would have a real global player in the sub-region. The new company would be known as Guinness Ghana Breweries Limited ( GGBL ).

Ghana is part of the global economy and this transaction results in a business of international stature. This will help stimulate the business climate and further investments in the country.

Through the transaction, GGBL will continue to attain high levels of growth and performance, thus enabling it to build on its contribution to the Ghanaian economy, community and environment.

Since the announcement of the transaction, and in reviewing the offer document, it had been clear that the required processes have been adhered to.

The rules and regulations prescribed by the Bank of Ghana, the Securities Exchange Commission (SEC ) and the Ghana Stock Exchange (GSE) relating to the transaction have been complied with by both companies. Consequently, approval has been given for this deal to continue.

It is expected that the combined businesses will be of immense benefit to the consumer because it will offer all the popular brands of GGL and GBL within the same portfolio.

By bringing together the expertise of both companies, the winning teams, the innovations, the brewing capacity and the distribution network, GGBL will offer the most popular brands, made to quality specification, at competitive prices for a long time to come.

This can only be good for consumers, who enjoy the portfolio of brands that this company will offer, for people who invest in this company and above all, for the country

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