Johannesburg - Anheuser-Busch (AB) InBev said this week that it wanted to tap into the growing beer market in Africa. The Belgian brewer published the terms of its acquisition of London-listed SABMiller on Tuesday.
In the document, AB InBev said: “Africa, as a continent, has hugely attractive markets with increasing GDP (gross domestic product), a growing middle class and expanding economic opportunities. Africa is also growing in importance in the context of the global beer industry.
“It is expected that the African continent will represent approximately 8.1 percent of global beer industry by volumes by 2025, up from approximately 6.5 percent in 2014, with beer volumes in Africa being expected to grow at nearly three times the rate of global beer volumes between 2014 and 2025.”
AB InBev said it did not have any significant operations in Africa, “and believes the continent will play a vital role in the future of the combined group, building upon the strong history and success of SABMiller in the region dating back to the 19th century”.
The $104 billion (R1.5 trillion) merger between AB InBev and SABMiller looks to be on the home straight and the merged entity is set for a JSE listing on October 11, according to AB InBev.
AB InBev also announced a time table for the implementation of the merger on Tuesday. According to the timelines, the deal will be completed on October 10. AB InBev has gone to great lengths to ensure the deal goes through and has obtained approvals for the deal in 23 jurisdictions, including South Africa, the US, China and EU.
Tuesday’s announcement came days after the SABMiller board formally accepted AB InBev’s all-cash offer of £45 (R831) a share and a partial share alternative, which is available for 41 percent of the SABMiller shares. AB InBev had to increase its previous offer of £44 a share after the value of sterling weakened in the wake of the UK’s vote to leave the EU.
AB InBev, which has had a secondary listing on the JSE since January, said on Tuesday that it had a primary listing in Brussels.
SABMiller chairman Jan du Plessis said last week that the board backed the deal although the £45 a share offer was on the “lower end” of the acceptable range. AB InBev and SAB Miller shareholder meetings are scheduled for September 28.
Vestact portfolio manager Bright Khumalo said on Tuesday that the deal was set to go through.
“What could possibly stop it? They have gone through the regulatory hurdles and, moreover, the SABMiller board has recommended the deal to shareholders.”
Satisfied
The deal has satisfied all pre-conditions to the merger when China’s Ministry of Commerce conditionally approved the transaction last week.
In order to get the approval in China, AB InBev agreed to sell SABMiller’s 49 percent stake in China Resources Snow Breweries (CR Snow) to China Resources Beer, which owns 51 percent of CR Snow.
Eyebrows were raised when the SABMiller paused integration work with AB InBev while the SABMiller board considered AB InBev’s revised offer.
AB InBev said the dates could change and would depend on the date on which the UK Court sanctions the UK scheme.
AB InBev shares declined 0.93 percent on the JSE on Tuesday, closing at R803.96.
BUSINESS REPORT