GABORONE (Reuters) – Botswana’s economy contracted 0.8 percent quarter-on-quarter in the three months to September versus a revised zero percent in the second quarter, data from the statistics office showed on Thursday.

On a year-on-year basis, gross domestic product (GDP) growth was at 4.5 percent in Q3 after expanding by 1.3 percent in Q2.

(Writing by Mfuneko Toyana; Editing by Joe Brock)

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By Philip Blenkinsop and Martinne Geller

BRUSSELS/LONDON (Reuters) – Coca-Cola Co has reached a deal to buy Anheuser-Busch InBev’s majority stake in their African bottling venture for $3.15 billion and hold onto it until it finds a new owner, the companies said on Wednesday.

Coke said in October it would exercise a right to buy the stake formerly owned by SABMiller following SAB’s takeover by AB InBev.

Coke has not said why it decided to buy back the stake, but it might be in its best interest to avoid partnering with AB InBev, which has no experience in Africa, and keep the beer giant at arm’s length.

With little room left for AB InBev to grow meaningfully in beer, chatter among bankers has turned to whether the deal-hungry mega brewer will eventually move into soft drinks. That could put Coke at the top of its list, though Coke’s $180 billion market value would be a huge hurdle.

AB InBev is already a large PepsiCo bottler in Latin America, but up until now has had no business in Africa, where distribution can be particularly challenging due to poor infrastructure.

Coke and AB InBev, the world’s largest makers of soft drinks and beer, respectively, said in a joint statement that they had agreed the transfer of AB InBev’s 54.5 percent stake in Coca-Cola Beverages Africa (CCBA), the continent’s largest soft drink bottler, with operations in a dozen markets including South Africa, Kenya, Uganda and Tanzania.

They also announced another deal for Coke to take other African territories not covered by CCBA, such as Zambia, Zimbabwe and Botswana, as well as bottling operations in El Salvador and Honduras. The price for those markets was not disclosed.

Coke said it planned to hold all operations temporarily until they can be refranchised to other partners. That is in keeping with its global business model, which sees it handling marketing and innovation, and selling beverage concentrate to a network of regional and local bottlers who bottle and distribute the drinks.

These bottlers include Coca-Cola European Partners, Coca-Cola Hellenic and Coca-Cola Icecek, all of whom have been pegged by analysts as possible buyers.

“We are continuing negotiations with a number of parties who are highly qualified and interested,” said Coke Chief Executive Muhtar Kent in a statement. “We look forward to refranchising these territories as soon as practical following regulatory approval.”

Coke Icecek, which operates in Turkey, Pakistan and other central Asian countries, said in November that it was working with an investment bank to explore its options.

Africa is an attractive market for packaged food and drink makers, due to the increasing appetite and discretionary budget of its growing middle class.

Coke, which formed CCBA with SABMiller and the South African owners of bottler Coca-Cola Sabco in 2014, had retained the right to buy SABMiller’s stake in the event of a change of control at the brewer.

AB InBev has now raised some $27 billion from divestments of parts of SABMiller’s business, recouping more than a quarter of the 79 billion pounds ($97.7 billion) it paid for the world’s second largest brewer.

The transactions, subject to relevant regulatory and minority approvals, are expected to close by the end of 2017.

Coke was advised on this deal by Rothschild, while AB InBev was advised by Lazard and Deutsche Bank.

($1 = 0.8083 pounds)

(Reporting by Philip Blenkinsop; editing by Alexandra Hudson)

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ABUJA (Reuters) – Nigeria’s central bank will try to eliminate the currency black market, where the naira trades about 40 percent below the official rate against the dollar, Nigeria’s finance minister said on Tuesday.

Africa’s largest economy, dependent on oil exports, is in its first recession in 25 years as low global crude prices take their toll.

The central bank scrapped a 16-month-old peg of 197 naira to the dollar in June, but it continues to trade in the official market, so that the naira remains far stronger against the dollar there than on the parallel market. The government has blamed that black market for damaging the already shaky economy.

The central bank (CBN) “has been directed to do this and CBN has promised to do something by putting a system in place to eliminate the black market because it’s damaging the economy”, Finance Minister Kemi Adeosun told a conference.

A CBN spokesman, Isaac Okorafor, said the central bank was working towards “ensuring that the forex market operates as effectively as we would envisage”.

He said the aim was to “ensure there is no black market” but did not give details of how this would be achieved.

The naira has traded around 305.5 naira to the dollar on the official interbank market since August, while it was quoted at 487 to the dollar on the parallel market on Monday.

(Reporting by Felix Onuah and Alexis Akwagyiram; Writing by Ulf Laessing and Paul Carsten; Editing by Kevin Liffey; Editing by Andrew Heavens)

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LUSAKA (Reuters) – Konkola Copper Mines (KCM), owned by Vedanta Resources, has been ordered by a London court to pay the Zambian government more than $100 million for a claim related to the copper price, a state-owned company involved in the dispute said.

The claim relates to outstanding payments under a 2013 copper price participation settlement agreement between KCM and Zambia Consolidated Copper Mines Investments Holdings (ZCCM-IH), the latter said late on Monday.

In June this year, ZCCM-IH filed the claim with the English High Court to recover over $100 million it said was owed to it from KCM in terms of the 2013 agreement.

“We now advise that ZCCM-IH has been successful in its application for default judgment. KCM has been ordered (on 16 December 2016) to pay all sums owed to ZCCM-IH,” the state company said.

“The total amount to be paid by KCM amounts to approximately $103 million. KCM has also been ordered to reimburse ZCCM-IH 80 percent of the costs it has incurred in pursuing its claim.”

A ZCCM-IH spokeswoman said the company and KCM planned to issue a joint press statement on Tuesday to give further details of the ruling.

(Reporting by Chris Mfula; Editing by Ed Cropley)

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LAGOS (Reuters) – Nigeria sold far fewer bonds than it offered on Wednesday, as investors worried about rising inflation demanded higher yields from a government looking to spend its way out of recession.

Africa’s largest economy raised 69.2 billion naira ($227 mln) in bonds maturing in five, 10 and 20 years’ time, less than the 95 billion naira it had wanted.

Investors were demanding yields of up to 18 percent for the notes, far above the mid-point at which the Debt Management Office (DMO) wanted to issue them, to compensate for inflation which hit more than 11-year high of 18.5 percent on Thursday.

“Many investors are not willing to lock up their funds at present levels,” one trader told Reuters.

Investors worried about rising inflation, with oil receipts and foreign inflows declining, are pushing up Nigerian bond yields, which could increase the cost of servicing local debt for the government, analysts say.

The DMO paid 16.43 percent to auction 41 billion naira, maturing in 2036 debt and fetched 25 billion naira due in 2026 debt at 16.24 percent. It issued 3.2 billion naira of 2021 debt at 15.99 percent. It paid around 15 percent for these notes at its previous auction last month.

On Tuesday, the government found unrecorded debts of 2.2 trillion naira left over from the previous administration, which turned up after an audit aimed at improving transparency.

The government expects the 2017 deficit to widen to 2.36 trillion naira as the government tries to drag the economy out of recession with a budget that foresees record spending. More than half of the deficit will be funded through domestic borrowing.

Total subscription at Wednesday’s auction stood at 102.84 billion naira. Traders said the quest for higher yields masked the levels of liquidity in the banking system.

(Reporting by Oludare Mayowa; Writing by Chijioke Ohuocha; Editing by Angus MacSwan and Hugh Lawson)

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JOHANNESBURG/LONDON (Reuters) – Anheuser-Busch InBev will sell its stake in South Africa’s Distell Group to state-owned pension fund Public Investment Corp, it said on Thursday, as agreed during its takeover of SABMiller.

South Africa’s Competition Commission made the disposal a condition of the $100 billion takeover.

The 26.4 percent stake in Stellenbosch-based Distell, which makes wine, spirits and ciders, is worth roughly 9 billion rand ($645 million) based on its closing price on Wednesday.

Distell’s other large shareholders, Remgro Ltd and Capevin Holdings Ltd, had pre-emptive rights in relation to the stake, but AB InBev said they confirmed they would not exercise them.

Distell shares were flat in Johannesburg at 0800 GMT.

($1 = 13.9629 rand)

(Reporting by Nqobile Dludla and Martinne Geller; editing by Gopakumar Warrier and Jason Neely)

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By Tiisetso Motsoeneng and Nqobile Dludla

JOHANNESBURG (Reuters) – Africa’s biggest grocery retailer Shoprite is in talks with Steinhoff about buying its African assets in an all-share deal that would create a group with $15 billion in annual sales, the pair said on Wednesday.

The deal, whose value was not disclosed, would form a no-frills retailer spanning food, furniture and clothes and underline the determination of tycoon Christo Wiese to put more of his assets under one roof.

Both Shoprite and Steinhoff, the owner of UK’s Poundland and U.S.-based Mattress Firm, count South African retail magnate Wiese as their biggest shareholder.

“This is a big move,” said Ashburton Investment’s fund manager, Wayne McCurrie.

“It will certainly change the retail environment in South Africa because these are two major groups getting together.”

Under the proposed deal, Shoprite would issue shares to Steinhoff in exchange for its assets on the continent that include clothes discount Pepkor and furniture business JD Group.

The transaction would give Steinhoff, which vies for global market share with Sweden’s Ikea, a significant equity interest in Shoprite, a 110 billion rand ($8 billion) company with operations in more than a dozen African countries that include South Africa, Nigeria and Angola.

Wiese told Reuters in September that a full merger of the two companies would be a “natural development”. Shares in Shoprite were little changed at 193.75 rand whileSteinhoff stock in Johannesburg dropped 6.6 percent to 71 rand as of 1109 GMT.

Wiese owns 16 percent of Shoprite and 23 percent of Steinhoff, where he is also a chairman.

($1 = 13.6892 rand)

(Additional reporting by Tanisha Heiberg; Editing by James Macharia/Keith Weir)

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By TJ Strydom

JOHANNESBURG (Reuters) – South Africa’s Sibanye Gold took a major step outside its home market on Friday with a $2.2 billion deal to buy Stillwater Mining, the only U.S. miner of platinum and palladium.

If it goes through, the cash takeover will increase South Africa’s grip over global platinum and palladium supply and underline chief executive Neal Froneman’s determination to branch out of gold mining and South Africa.

However, the price Sibanye is offering to increase its own share of supplies of the precious metals is larger than its market value and the move triggered a sharp fall in its stock.

Sibanye said it would buy Stillwater, which operates in Montana and is the largest primary producer of platinum group metals (PMGs) outside South Africa and Russia, with a loan that it will re-finance with debt plus a rights issue of at least $750 million.

Froneman wants to cut the bullion miner’s dependence on gold and platinum in South Africa, where a volatile currency, labour strikes and strict government rules have weighed on Sibanye’s share price.

The deal, the second-biggest South African outbound M&A transaction so far this year, will make Sibanye the world’s third largest palladium producer and fourth largest platinum group metals miner, Froneman said.

Some analysts highlighted the risks as the platinum market sinks into oversupply.

But while demand from the diesel car sector for platinum, which is used in catalytic converters, is under pressure because of air pollution concerns, palladium used in hybrid petrol cars could see higher consumption and the market is in deficit. [nL8N1DC53O]

Palladium reached its most expensive versus platinum since early 2002 last month as the U.S. election result sparked a surge in cyclical assets.

“It’s a tier one asset in palladium in the United States,” a source close to the deal said. “Normally in the U.S., there would be a 30-40 percent premium. This is around 20 percent.”

Sibanye said it would pay $18.00 per share in cash for Stillwater, a 23 percent premium over Thursday’s closing price, which it was initially financing through a $2.675 billion loan arranged by HSBC and Citigroup.

“These are some of the lowest cost ounces in the world,” said Froneman, referring to Stillwater’s operations.

SHARES UNDER PRESSURE

Sibanye’s shares dropped 18 percent to an 11-month low, but recovered slightly to close 15.3 percent weaker at 24.01 rand, their biggest daily percentage drop on record.

By 1512 GMT, shares in Stillwater had surged 18.5 percent to $17.41, a touch below the offer price.

Froneman said Sibanye’s share price was too low, even though it paid “industry-leading dividends” and this was partly because it was “not as geographically diverse” as some competitors.

Sibanye did not detail any regulatory hurdles, saying only the deal – which is backed by Stillwater’s board – was conditional on the required authorisations.

It said it needed deal approval from its own and Stillwater’s shareholders, although it already has the support of 29 percent of its own investors.

Sibanye was spun off from Gold Fields in 2013. It bought Aquarius Platinum and Anglo American Platinum’s Rustenburg mines last year. [nL8N12612R]

($1 = 13.6755 rand)

(Additional reporting Tiisetso Motsoeneng in Johannesburg, Barbara Lewis and Jan Harvey in London; Editing by James Macharia, Alexander Smith and Mark Potter)

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