Source: Reuters
27/07/2009
Dar es Salaam, July 26 - Brewing giant SABMiller said on Sunday that Kenya's East African Breweries Limited's plan to end a deal with Tanzania Breweries Limited and take a stake in a competitor was a breach of contract.
SABMiller owns a 52.83 percent stake in Tanzania Breweries Limited and EABL holds 20 percent.
The Kenyan company said on Saturday it wanted to cancel a pact with TBL and take a stake in Serengeti Breweries Limited, Tanzania's second-largest brewer.
SABMiller said that was a breach of contract.
"TBL considers that EABL's actions represent a fundamental breach of their undertakings to TBL and SABMiller, having negotiated a competitive deal while remaining as a shareholder of TBL and a member of TBL's board," SABMiller said.
"In the light of this, TBL and SABMiller are seeking an injunction against EABL's actions and proposed transactions via a court application in the UK courts, pending the commencement of arbitration proceedings if the parties cannot resolve their differences amicably," it said in a statement.
SABMiller said EABL and TBL had had a seven-year relationship in which TBL had boosted the Kenyan brewer's brand sales at a 12.7 percent compound rate. The company said it would continue with its contractual obligations to EABL as usual.
"In light of pending legal proceedings, we do not wish to comment further," SABMiller said.
EABL, majority owned by Diageo, did not say in its Saturday statement whether it planned to offload its shareholding in TBL nor why it wanted to end the contract.
TBL has a beer production capacity of just over 3.4 million hectolitres versus sales of about 3.25 million hectolitres per year. It has plants in Dar es Salaam, Mwanza and Arusha.
27/07/2009
Dar es Salaam, July 26 - Brewing giant SABMiller said on Sunday that Kenya's East African Breweries Limited's plan to end a deal with Tanzania Breweries Limited and take a stake in a competitor was a breach of contract.
SABMiller owns a 52.83 percent stake in Tanzania Breweries Limited and EABL holds 20 percent.
The Kenyan company said on Saturday it wanted to cancel a pact with TBL and take a stake in Serengeti Breweries Limited, Tanzania's second-largest brewer.
SABMiller said that was a breach of contract.
"TBL considers that EABL's actions represent a fundamental breach of their undertakings to TBL and SABMiller, having negotiated a competitive deal while remaining as a shareholder of TBL and a member of TBL's board," SABMiller said.
"In the light of this, TBL and SABMiller are seeking an injunction against EABL's actions and proposed transactions via a court application in the UK courts, pending the commencement of arbitration proceedings if the parties cannot resolve their differences amicably," it said in a statement.
SABMiller said EABL and TBL had had a seven-year relationship in which TBL had boosted the Kenyan brewer's brand sales at a 12.7 percent compound rate. The company said it would continue with its contractual obligations to EABL as usual.
"In light of pending legal proceedings, we do not wish to comment further," SABMiller said.
EABL, majority owned by Diageo, did not say in its Saturday statement whether it planned to offload its shareholding in TBL nor why it wanted to end the contract.
TBL has a beer production capacity of just over 3.4 million hectolitres versus sales of about 3.25 million hectolitres per year. It has plants in Dar es Salaam, Mwanza and Arusha.
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