The move is part of the group's aim to stay ahead of other international brewers, including Brau, Interbrew and Carlsberg, who all have a significant presence in the market.
The South African- and UK-owned beer giant said it had taken an 81.1 per cent controlling stake in Aurora, adding that it expected to purchase additional shares prior to the closure of its offer which would bring the total stake to 90 per cent.
The deal would be conditional upon Romanian Competition Council approval and the fulfilment of certain technical requirements.
Aurora has one brewery, located in the city of Brasov in central Romania, and a national market share of 5.2 per cent, which put it in the top five players in the country. The brewery has an annual capacity of 680,000 hectolitres and annual sales of 659,000 hectolitres. The value of the net assets to be acquired is approximately US$16.2 million and the purchase consideration implies a 2003 EBITDA multiple of less than 5.0 times.Aurora brewery will become SABMiller's fourth in Romania, joining its other operations in Cluj-Napoca, Buzau, and Timisoara. Aurora's main brands are Ciucas and a recently launched PET brand called Cerbul, both of which SABMiller claim to have a strong regional presence. The acquisition offers the opportunity to grow these brands via SABMiller's existing distribution platform. Following the transaction SABMiller will have a market share in Romania of approximately 20 per cent, a strong number two position in the market.
Graham Mackay, Chief Executive of SABMiller, said: "This acquisition complements our existing operations in Romania and strengthens our overall position in central Europe. Aurora brings to SABMiller a strong local brand portfolio, an excellent distribution platform in central Romania, and a quality production site in a region with a rich brewing heritage. The acquisition builds on our strategy of optimising and expanding our positions in developing markets and we anticipate brand, procurement and distribution benefits from integrating Aurora with our existing Romanian operations."
Since the late 90s beer consumption has enjoyed a steady rise in Romania and is now within sites of consumption levels in western Europe. Currently around 55 litres of beer is consumed per capita in the country, compared to 65-70 litres per head in the EU.