Comparism Between Private and Public Ownership: a Case Study of Nigerian Breweries Plc and Pabod Beweries Ltd.

Topics: Public company, Privately held company, Types of companies Pages: 20 (6082 words) Published: October 12, 2012

There are two types of companies which are generally identified when classifying ownerships. These are known as Private and Public companies.

A private company is a term used to describe a privately held limited partnership that does not report financial information to the public.

It is a business company owned by either non-governmental organizations or by a relatively small number of shareholders. Though less visible than their publicly quoted counterparts, private companies have a major contribution to the economy of countries as was the case in 2008 in the United State of America where 144 private companies contributed about $1.6 trillion and employed about 13 million people according to Forbes. A private ownership can be a corporation, a limited liability company, a partnership or a sole proprietorship as long as the shares are privately held and not traded publicly. Private companies do not trade shares on the public market (sell stock), so they are not required to register with the Securities and Exchange Commission (SEC). They are not required to publicly discuss financial information.

These are public liability companies that offer their securities (stock/shares, bonds, etc.) for sale to the general public, typically through a stock exchange or through market makers operating in over the counter markets. Sometimes government-owned companies are confusingly called public companies. This kind of company is better described as a publicly owned company or government-owned corporation.

For generations, public ownership was unassailable as the right way to promote the best management of a company’s short- term performances and long term health. As a worldwide equity culture blossomed during the second half of the last century, the evidence appeared everywhere: mutually owned companies demutualized, family or employee-owned businesses undertook IPO (Initial Public Offers) and government’s privatized state held enterprises to capture the long-term value created by the capital market approach to governance. Not so today. More than half of all public owned companies say they would cut a project with a positive net present value to hit a short term earnings target. Meanwhile, private firms are raising capital at a record time/pace, acquiring businesses and in many cases creating tremendous value for themselves and their investors.

Nigerian Breweries Plc-
Nigerian Breweries Plc was incorporated in 1946. It is the largest brewing company in Nigeria. It has about eight operational breweries located across the country (Lagos, Aba, Enugu, Kaduna, Ibadan, etc.) It boasts of different high quality brands including star lager beer (launched in 1949); Gulder (1970); Maltina (1976) with varieties; Amstel Malta (1994) and Heineken lager beer(1998). Over time, a lot of brands have emerged from the stables of NB Plc like Fayrous, Climax, Legend Stout, and Golberg lager beer, Malta Gold and Life Continental Lager beer through the acquisition of Life breweries Ltd.

Pabod Breweries Ltd.-
Pabod breweries ltd is a privately owned company that is based in Port Harcourt. It came into existence so many

years ago (1982) as a River State owned company. The company suffered a major setback in 1986 when a government policy the Structural Adjustment programme (SAP) had an adverse effect on the importation of raw materials for the brewery which depended heavily on foreign raw materials. In addition, lack of proper management and corruption resulted in the closure of the brewery. Operations kicked off in 2007 after the state government sold the company to Sab Miller an India based brewery with subsidiary breweries all over the globe; it was rebranded and repackaged together with its product lines, thereby...
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