AB InBev to Explore Sale of SABMiller’s European Premium Brands

3 Dec 2015 | Author: | No comments yet »

AB InBev Plans Sale Of Peroni, Grolsch.

Anheuser-Busch InBev (ABI.BR) is looking to sell SABMiller’s (SAB.L) Grolsch and Peroni brands in what it said was a bid to address potential EU antitrust concerns over its planned acquisition of the world’s second largest brewer. Anheuser-Busch has renewed its sponsorship of the National Basketball Association for four years and sweetened the deal with enhanced packaging and marketing rights. The sale of the brands and their related businesses in Italy, the Netherlands and Britain would be conditional on AB InBev acquiring SABMiller in a cash and share offer currently worth some 72 billion pounds. “Like the previously announced disposal of the (U.S.) Miller business to Molson Coors, these steps reflect AB InBev’s pro-active approach to addressing potential regulatory concerns,” AB InBev, the world’s largest brewer, said in a statement.

As part of its deal to buy SABMiller, AB InBev agreed to sell SABMiller’s 58% stake in the MillerCoors joint venture to its partner Molson Coors Brewing. Bernstein analyst Trevor Stirling has noted that, in Western Europe, AB InBev and SABMiller have potential overlaps in Italy and the Netherlands, where the pair have combined shares of 30% and 27%, respectively. European regulators informally use 30% market share as a benchmark when considering whether a tie-up would give any one company too much sway over the market. But selling the global brands would let the company address those concerns swiftly and raise additional money to help reduce the $75 billion in debt it is taking on to finance its takeover of SABMiller. “Peroni and Grolsch aren’t strategic in the bigger scheme of things,” said Pablo Zuanic, an analyst with Susquehanna. “If that’s what it’s going to take to appease regulators in European countries, so be it.” AB InBev is far more interested in the geographies and local brands SABMiller offers than its global brands, according to people familiar with the acquisition. SABMiller’s strong positions in Africa and Latin American markets like Colombia and Peru offer AB InBev new markets to sell Budweiser, Stella and Corona.

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