Johannesburg - JSE-listed Anheuser-Busch (AB) InBev planned to cut about 3 percent of its enlarged workforce in the three years after its takeover of rival brewer SABMiller, AB InBev said in documents relating to the merger on Friday.
The move is unlikely to affect jobs in South Africa because of public commitments AB InBev made in order to gain the deal’s approval.
In terms of the agreement entered into between the South African government and AB InBev in April, the company promised a moratorium on job losses as a result of the transaction. That agreement has since found its way into an order of the Competition Tribunal on the deal.
But AB InBev said on Friday that it might still implement changes to the reporting lines and roles and work undertaken by certain employees in South Africa. “The details of any such changes are not yet known and would be subject to appropriate consultation.”
In a prospectus published on Friday, AB InBev said avoiding unnecessary costs was a core competency within its culture. The company, which prides itself on strict financial discipline, said it wanted to maintain long-term cost increases at below inflation.
The company’s tight-fisted reputation has already caught the attention of the Food and Allied Workers Union (Fawu), which has members at SAB, SABMiller’s South African subsidiary.
“We know that they are notorious for their cost-cutting culture. So we suspect that... their stance to maintain costs at below inflation will put pressure on wage increases,” Fawu general secretary Katishi Masemola said on Friday.
Masemola said the next round of wage negotiations between Fawu and SAB would commence around April next year.
Divestitures
AB InBev, the owner of brands such as Budweiser, Corona and Stella Artois, employs about 150 000 people and SABMiller, the world’s second-largest brewer has about 70 000 employees.
However, not all of these employees will be transferred to the merged entity because the two companies have had to divest some of their businesses in order to appease competition authorities to get the deal approved in various jurisdictions. These included divestitures in the US, China and South Africa.
AB InBev is the world’s largest brewer by volume and one of the world’s top five consumer products companies by revenue.
Meanwhile, SABMiller chairman Jan du Plessis recently asked the company’s shareholders to vote in favour of the transaction at SABMiller’s general meeting on September 28.
AB InBev’s cash offer of £45 (about R847) a share represents a premium of about 49 percent to SABMiller’s closing share price of £30.15 on September 15, the last business day before the commencement of the offer period. Du Plessis said the cash offer was fair and reasonable.
In a letter to shareholders, Du Plessis expressed regret at the looming job losses as a result of the merger.
“The SABMiller directors note that AB InBev’s integration planning is not yet complete and regret that the impact on certain employees and office locations of the SABMiller Group remains uncertain.
“However, it is clear that job losses in the combined group will be required and that AB InBev intends to implement the rationalisation, relocation or closure of a number of SABMiller’s global and regional offices,” he said.
AB InBev shares dropped 0.82 percent on the JSE on Friday to close at R1 790.54.
BUSINESS REPORT