South African Breweries has confirmed it is holding talks with US brewer Miller following reports that the two were negotiating a $5bn deal that would catapult SAB into second place in the global brewing industry. SAB said discussions were taking place with a number of third parties. However, talks were at "a preliminary stage and no conclusions have been reached". Gerrard analyst David Liston said: "Currently, 50% of SAB's turnover is generated in South Africa, leaving it too exposed to the rand. "With Miller, this would go down to less than a third, which will help SAB's rating. "By increasing in size, SAB will also be able to play a more active part in consolidation in the global beer industry." However, some analysts said SAB's balance sheet would be very highly geared after a deal of this size, which could limit its options for a couple of years. Likewise, there was scepticism in the City about SAB's ability to halt declining sales of Miller in the US market, where it struggles to compete with market leader Budweiser. {{NEWS }}