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SABMiller Acquires 2 Brands

July 04, 2006|From Bloomberg News

SABMiller, the brewer whose brands include Miller and Pilsner Urquell, agreed to buy alcoholic-beverage brands Sparks and Steel Reserve from San Francisco-based McKenzie River Corp. for $215 million.

The acquisition includes the related trademarks of the brands, the London-based company said Monday. SABMiller and McKenzie River have also entered a product development partnership.

SABMiller is adding fast-growing premium brews to fuel sales growth as U.S. drinkers switch to wine and spirits from traditional beers.

Beer accounts for about 55% of alcohol consumption in the U.S. compared with 60% a decade ago, according to data supplied by Beer Marketer's Insights.

"SABMiller is investing into a market they believe to be a strong growth market over the next five years," said Ben Maitland, an analyst at WestLB Equity Markets in London.

Sparks is a citrus-flavored premium malt beverage with added caffeine, taurine, guarana and ginseng, SABMiller said. Steel Reserve is a "high-gravity lager" that is brewed for a minimum of 28 days, according to the statement.

McKenzie River, a beverage marketing firm founded in 1987, introduced the Steel Reserve brand in 1997 and the Sparks brand in 2002.

Sparks and Steel Reserve are already brewed by SABMiller under a contract brewing agreement and are distributed by Miller wholesalers in the U.S.

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