3 ms·

Maybe you are a beer or appletiser drinker ;) (SAB Miller has a market cap double that of Ford, if I'm not mistaken)

by pcc 18y ago

petercooper 18y ago
Tellingly, though, they're now based in London! But, yes, South Africa can provide some counterexamples.
- pcc 18y ago
  I would be interested to know what precisely the word "tellingly" means in this context ;) This actually has to do with access to capital markets. It is a common pattern for these companies to decide to list on LSE or NYSE, since it allows them broader access to more capital. (Consider for example that Telkom, SA's goverment telco, is itself listed on the NYSE for this same reason). To some companies, LSE is attractive because London is the "closest stop" from Johannesburg, travel-wise (and an easy timezone diff). In SABMiller's case, they are cross-listed in London and Johannesburg. This makes sense when you talk to stockbrokers in the USA (or Canada) that tell you they will execute a trade on the JSE @ $250 minimum commission -- but that they must advise against it because the markets are so volatile (which to me seems an exageration).
  - petercooper 18y ago
    You have essentially stated the facts I could use to support my somewhat cynical "tellingly." Africa is not going to be an economic world power until it has the ability to trade within itself to the extent that, say, Europe was 50 years ago. That a successful South African country has chosen to base itself (not just list) in Europe seems like a statement on Africa's commercial climate to me. In any case, I am willing to defer to those more knowledgeable about African economics in this thread :)
    - pcc 18y ago
      That's why I ask the question -- it seems this is the easy conclusion people jump to (ie to construe this type of a move as "abandoning Africa") -- while in fact it is a strategy designed to benefit both African operations as well as international expansion. After the fall of apartheid, SAB could expand very rapidly in overseas markets. However, its ability to grow internationally was limited by foreign exchange controls that restricted its use of cash from its South African brewing operations to fund overseas expansion. Thus it wanted to acquire access to the global share market to further its growth in the international business. The strategy on LSE listing incidentally is mentioned on their site: (http://www.sabmiller.com/sabmiller.com/en_gb/Our+business/Our+history/1900+1999.htm http://www.sabmiller.com/sabmiller.com/en_gb/Our+business/Ou...) "..the strategy is to develop and expand its international beer and other beverage operations and to invest in the rapidly-growing gaming industry in South Africa." For an African company seeking to expand internationally (ie Europe, USA etc), I do not see what relevance trading within Africa really has -- surely any company setting up shop everywhere, wants to facilitate investors coming in from everywhere. And it is true that investors anywhere in the world can invest via LSE, NYSE etc much more easily than they can into the Johannesburg JSE, or Thailand, or whatever. This does not make SAB a British company, nor does it make Telkom an American company, just because they are set up to access capital markets via the UK/USA. This is not really markedly different to (say) a USA multinational deciding to base itself out of the Cayman Islands for tax purposes. (Surely this would not be deemed "abandoning the USA"). If SAB had ceased its operations in Africa, different matter -- that would have been a statement on the commercial climate. But they certainly have not done this. But hey, the initial question was related to whether Africa could produce a large (possibly multinational) company -- and SAB is clearly an example not just of this, but of being able and willing to apply whatever strategy is required to get the desired result (even if you choose to construe this as "abandoning Africa"). From this viewpoint, it seems almost irrelevant whether one considers SAB to be a British or an African company in the present time. Since Naspers has been mentioned elsewhere, it is perhaps worth using them as an example of an African company which has achieved international expansion while remaining firmly listed only on the JSE. And just to make this reply even longer ;), a further example of what has come out of Africa: Naspers pay TV ops (via MIH) developed and deployed to Africa digital satellite TV (DVB) way before digital was available to Europe. (And made significant contrib to DVB standard itself). Although digital satellite in the USA slightly predatd this, Naspers / MIH technology had HD and MPEG2 deployed before even the USA -- and they deployed it to Africa first. (Though this seems a trivial example in the greater scheme of things, it should illustrate the contrast between the economic argument -- and the ability to pull off something of this magnitude). This is just one example where I have on occasion overheard Europeans complain how South Africa often seemed to get cool technologies before they did. But there are countless others of various sizes -- e.g. Dimension Data ($1.4bn market cap, also listed on LSE but based in Jhb), Omnipless which had firm grip on Inmarsat terminal antenna market & sold to a UK concern, etc etc.

Maybe you are a beer or appletiser drinker ;) (SAB Miller has a market cap double that of Ford, if I'm not mistaken)

by pcc 18y ago

Maybe you are a beer or appletiser drinker ;) (SAB Miller has a market cap double that of Ford, if I'm not mistaken)

petercooper 18y ago

Tellingly, though, they're now based in London! But, yes, South Africa can provide some counterexamples.

pcc 18y ago
I would be interested to know what precisely the word "tellingly" means in this context ;) This actually has to do with access to capital markets. It is a common pattern for these companies to decide to list on LSE or NYSE, since it allows them broader access to more capital. (Consider for example that Telkom, SA's goverment telco, is itself listed on the NYSE for this same reason). To some companies, LSE is attractive because London is the "closest stop" from Johannesburg, travel-wise (and an easy timezone diff). In SABMiller's case, they are cross-listed in London and Johannesburg. This makes sense when you talk to stockbrokers in the USA (or Canada) that tell you they will execute a trade on the JSE @ $250 minimum commission -- but that they must advise against it because the markets are so volatile (which to me seems an exageration).
- petercooper 18y ago
  You have essentially stated the facts I could use to support my somewhat cynical "tellingly." Africa is not going to be an economic world power until it has the ability to trade within itself to the extent that, say, Europe was 50 years ago. That a successful South African country has chosen to base itself (not just list) in Europe seems like a statement on Africa's commercial climate to me. In any case, I am willing to defer to those more knowledgeable about African economics in this thread :)
  - pcc 18y ago
    That's why I ask the question -- it seems this is the easy conclusion people jump to (ie to construe this type of a move as "abandoning Africa") -- while in fact it is a strategy designed to benefit both African operations as well as international expansion. After the fall of apartheid, SAB could expand very rapidly in overseas markets. However, its ability to grow internationally was limited by foreign exchange controls that restricted its use of cash from its South African brewing operations to fund overseas expansion. Thus it wanted to acquire access to the global share market to further its growth in the international business. The strategy on LSE listing incidentally is mentioned on their site: (http://www.sabmiller.com/sabmiller.com/en_gb/Our+business/Our+history/1900+1999.htm http://www.sabmiller.com/sabmiller.com/en_gb/Our+business/Ou...) "..the strategy is to develop and expand its international beer and other beverage operations and to invest in the rapidly-growing gaming industry in South Africa." For an African company seeking to expand internationally (ie Europe, USA etc), I do not see what relevance trading within Africa really has -- surely any company setting up shop everywhere, wants to facilitate investors coming in from everywhere. And it is true that investors anywhere in the world can invest via LSE, NYSE etc much more easily than they can into the Johannesburg JSE, or Thailand, or whatever. This does not make SAB a British company, nor does it make Telkom an American company, just because they are set up to access capital markets via the UK/USA. This is not really markedly different to (say) a USA multinational deciding to base itself out of the Cayman Islands for tax purposes. (Surely this would not be deemed "abandoning the USA"). If SAB had ceased its operations in Africa, different matter -- that would have been a statement on the commercial climate. But they certainly have not done this. But hey, the initial question was related to whether Africa could produce a large (possibly multinational) company -- and SAB is clearly an example not just of this, but of being able and willing to apply whatever strategy is required to get the desired result (even if you choose to construe this as "abandoning Africa"). From this viewpoint, it seems almost irrelevant whether one considers SAB to be a British or an African company in the present time. Since Naspers has been mentioned elsewhere, it is perhaps worth using them as an example of an African company which has achieved international expansion while remaining firmly listed only on the JSE. And just to make this reply even longer ;), a further example of what has come out of Africa: Naspers pay TV ops (via MIH) developed and deployed to Africa digital satellite TV (DVB) way before digital was available to Europe. (And made significant contrib to DVB standard itself). Although digital satellite in the USA slightly predatd this, Naspers / MIH technology had HD and MPEG2 deployed before even the USA -- and they deployed it to Africa first. (Though this seems a trivial example in the greater scheme of things, it should illustrate the contrast between the economic argument -- and the ability to pull off something of this magnitude). This is just one example where I have on occasion overheard Europeans complain how South Africa often seemed to get cool technologies before they did. But there are countless others of various sizes -- e.g. Dimension Data ($1.4bn market cap, also listed on LSE but based in Jhb), Omnipless which had firm grip on Inmarsat terminal antenna market & sold to a UK concern, etc etc.