(Corrects spelling of "brewer" in first paragraph, also removes
ungrammatical clause in first paragraph)
* Castel denies talks on beer deal with SABMiller
* SABMiller shares up 0.3 pct at 19.98 pounds
* Deutsche Bank report highlights benefits of deal
(Rewrites adding Castel denial, background, shares)
By David Jones and Lionel Laurent
LONDON/PARIS, Oct 7 French drinks group Castel
denied on Thursday that it was in talks to sell its African beer
business to SABMiller SAB.L, the world's second-biggest
The Paris-based group was quick to pour cold water on a
report in The Times that it was in talks about a deal worth over
6 billion pounds ($9.56 billion) with SABMiller linking their
African beer operations. The Times report followed a broker's
note highlighting a possible deal.
"It's wrong ... You are mixing it up with a study by
Deutsche Bank. There are no negotiations, nothing," Guy de
Clercq, director of BGI Castel, the beer and soft drinks
subsidiary of the privately owned drinks group, told Reuters in
The Deutsche Bank report on Wednesday said Castel was a
natural target for SABMiller's mergers and acquisitions
ambitions, and a more compelling option than acquiring the
Foster's Group FGL.AX beer business in Australia.
The report, dated Oct. 6, said Castel's beer business could
transform Africa into a truly significant growth driver for
SABMiller if the French group's controlling family were ever to
put it up for sale.
Shares in SABMiller, which brews Peroni, Miller Lite and
Grolsch beers, rose 0.3 percent to 19.98 pounds by 0953 GMT in a
flat London stock market.
Graphic on global brewers comparison. click on
Breakingviews column on [ID:nLDE6960PY]
Castel was founded in 1949 by nine brothers and sisters and
is still run by its founding president Pierre Castel, 84, and
despite his reduced involvement there has been no indication
that the controlling family might sell.
Analysts said a Castel link-up would make strategic sense
with SABMiller strong in southern and eastern Africa such as
Tanzania, Zimbabwe and Mozambique, and Castel in western Africa
nations like Angola, Cameroon and Ivory Coast.
"An acquisition of Castel would be an excellent strategic
move for SABMiller, given the high margins and strong per capita
beer consumption growth in Africa. SABMiller would eclipse
Heineken and Diageo (DGE.L) in Africa," said analyst Simon Hales
at broker Evolution Securities.
SABMiller has long been seen as an eventual acquirer of
Castel when Pierre Castel relinquishes control. Indeed,
SABMiller has the right of first refusal if the business is
sold, Hales added.
The two reached a strategic alliance in 2001 whereby
SABMiller took a 20 percent stake in the French group's beer and
soft drinks operations in Africa and Castel acquired a 38
percent stake of SABMiller's African subsidiary.
The global brewing industry has seen a number of big deals
in recent years. Belgium's InBev acquired St. Louis-based
Anheuser-Busch in 2008, creating the world's biggest brewer AB
InBev (ABI.BR) with brands including Stella Artois, Beck's and
The world number three brewer Heineken (HEIN.AS) bought the
beer business of Mexico's FEMSA earlier this year in a $5.7
billion deal to give the Dutch brewer access to high growth beer
As recently as August, there was market talk that SABMiller
was looking at the beer operations of Australian group Foster's,
which is valued at more than $10 billion as Foster's moves to
split its beer and wine operation early next year.
(Reporting by Karolina Tagaris and David Jones; Additional
reporting by Victoria Howley; Editing by David Cowell, Mike