Global brewer SABMiller would sell a 10% interest in its South African business, South African Breweries (SAB), to employees, black owned licensed liquor retailers and liquor licence applicants, as well as black owned customers of SAB’s soft drinks division ABI, in a R6-billion black economic-empowerment (BEE) transaction.

The $750-million transaction, which was expected to be implemented in the first half of 2010, was expected to contribute towards SAB’s aim of achieving a level four contributor status in terms of South Africa’s BEE legislation.

It would result in an effective 16% broad-based BEE ownership transaction in terms of the country’s Codes of Good Practice on BEE.

“We were determined to design a transaction that would deliver truly broad-based and tangible benefits, and we believe this transaction will do that from the beginning. This deal is good for South Africa and good for SAB,” SAB MD Norman Adami commented in a statement on Wednesday.

The brewer was confident that the transaction would promote sustainable economic growth and social development in South Africa.

“We have structured this transaction to maximise benefits for all our stakeholders and to deliver genuine broad-based black economic empowerment,” added SABMiller CE Graham Mackay.

Three separate investment entities, namely an employee trust, a retailer entity and the SAB Foundation, would be created to implement the transaction, SABMiller explained.

Each of the entities would subscribe for new separate classes of ordinary shares in the local brewer, with employees expected to hold 40% of the BEE stake, retailers a further 40% and the SAB Foundation the remaining 20%.

Employees and beneficiaries of the SAB Foundation, which would allow the broader South African community to participate in the BEE transaction, would not have to make any cash or other investments in order to participate in the deal.

Participating retailers would, however, be expected to make a “relatively small” cash investment, said the brewer.

“There are three innovative and distinctive features of this transaction. Firstly, the transaction places no reliance on external bank funding, and requires only a relatively small, and hence, affordable cash investment from retail participants,” said Mackay.

He added that participants would also receive a “meaningful dividend stream,” for the ten-year period of the deal.

“Thirdly, the transaction aims to benefit the stakeholders who have made a real contribution to SAB's success as well as the broader South African community through the SAB Foundation,” he added.

Participants would, at the end of the ten-year period, exchange their shareholdings in SAB for shares in SABMiller.

The BEE deal would cost the brewer $220-million or R1,8-billion, based on current assumptions, it said.