Daily Management Review

AB InBev could see more deals After Buying SABMiller


09/12/2016




AB InBev could see more deals After Buying SABMiller
There could be more smaller deals for Anheuser-Busch InBev involving Castel Group, Coca-Cola and Anadolu Efes once it seals its 79 billion pound (a$104.8 billion) takeover of rival brewer SABMiller.
 
To speed approval for one of the biggest deals in history, agreements to sell SAB's brands in Western Europe have already been made by AB InBev. It has also has agreements to sell its joint venture stakes in the United States and China. AB InBev is the maker of Budweiser and Corona brands. SAB's assets in Eastern Europe, worth up to 7 billion euros ($7.9 billion) are also planned to be offloaded by the company but agreement on a buyer is yet to be reached.
 
Including the first right to buy out the wine, beer and soft drink maker should it ever seek new owners outside the billionaire Castel family, SAB has a cross-shareholding with France's Castel Group that, three sources say.
 
Partly due to the fact that it would be the second-largest beer and soft drink maker in Africa, AB InBev could gain path toward potential full ownership of Castel, which some analysts estimate is worth more than $30 billion, helped by the right of the transfer.
 
One of the main drivers of ABI's takeover is Africa, with its increasingly thirsty middle class. The takeover is expected to to close in October following a shareholder vote on 28 September.
 
According to Liberum analyst Alicia Forry, AB InBev would likely jump at the chance to own Castel, which also boasts wine estates in Morocco, Tunisia and Ethiopia, and is "such a jewel in the crown."
  
"It's a very important relationship that we intend to continue to develop and evolve," AB InBev Chief Executive Carlos Brito told analysts last month when asked about Castel.
 
However whether Castle would ever sell out is unclear. The company has been hurt by the recent economic crisis in Angola. The company did not immediately respond to a request for comment.
 
SABMiller now owns 57 percent of soft drinks seller Coca-Cola Bottling Africa, apart from beer, which the brewer has sold in South Africa since 1895. Coke will have the right to buy SAB's stake -- estimated to be worth as much as $4 billion -- once the takeover closes, under an existing change-of-control clause.
 
Several analysts, including Bernstein's Trevor Stirling, believe it will buy the stake, in part to keep ABI away from its door, even though Coke declined to comment on its intentions.
 
Whether the mega brewer will eventually move into soft drinks, a step that could put Coke at the top of its list since there is no more room to grow in beer, is the chatter among bankers.
 
"They know they're potentially next on the menu and the idea of them having a potential hostile acquirer as your key partner in Africa is not something I think will sit well with Coca-Cola," Stirling said, noting also that AB InBev is a large PepsiCo bottler in Latin America.
 
"So even if they weren't a potential acquirer ... that in itself would sit uneasily," he added.
 
(Source:www.reuters.com) 






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