After buying SABMiller,
AB InBev could see more deals
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[September 12, 2016]
By Martinne Geller
LONDON (Reuters) - Once Anheuser-Busch
InBev seals its 79 billion pound ($104.8 billion) takeover of rival
brewer SABMiller, it could find itself party to other smaller deals,
involving Castel Group, Coca-Cola and Anadolu Efes.
AB InBev, maker of Budweiser and Corona, already forged agreements
to sell SAB's brands in Western Europe and its joint venture stakes
in the United States and China to speed approval for one of the
biggest deals in history. It also plans to offload SAB's assets in
Eastern Europe, worth up to 7 billion euros ($7.9 billion), but has
not agreed a buyer.
Besides those, SAB has a cross-shareholding with France's Castel
Group that, three sources say, includes the first right to buy out
the wine, beer and soft drink maker should it ever seek new owners
outside the billionaire Castel family, helmed by Pierre Castel, who
is nearly 90.
That right would transfer to AB InBev, they say, giving it a path
toward potential full ownership of Castel, which some analysts
estimate is worth more than $30 billion due partly to it being the
second-largest beer and soft drink maker in Africa.
The continent, with its increasingly thirsty middle class, is one of
the main drivers of ABI's takeover - expected to close in October
following a shareholder vote on 28 September.
Castel, which also boasts wine estates in Morocco, Tunisia and
Ethiopia, is "such a jewel in the crown," according to Liberum
analyst Alicia Forry, that AB InBev would likely jump at the chance
to own it.
"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.
It is unclear whether Castel, whose business has been hurt by the
recent economic crisis in Angola, will ever sell out. The company
did not immediately respond to a request for comment.
BEER AND SOFT DRINKS
Aside from beer, which SABMiller has sold in South Africa since
1895, the brewer now owns 57 percent of soft drinks seller Coca-Cola
Bottling Africa. Under an existing change-of-control clause, Coke
will have the right to buy SAB's stake -- estimated to be worth as
much as $4 billion -- once the takeover closes.
Coke declined to comment on its intentions but several analysts,
including Bernstein's Trevor Stirling, believe it will buy the
stake, in part to keep ABI away from its door.
With no more room to grow in beer, chatter among bankers has turned
to whether the mega brewer will eventually move into soft drinks, a
step that could put Coke at the top of its list.
[to top of second column]
Beer flows from a bottle of Stella Artois into a glass in this
picture illustration taken in Sarajevo, Bosnia and Herzegovina
November 5, 2015. REUTERS/Dado Ruvic
"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.
A takeover of Coke - which has a market value of $188 billion - would be of
unprecedented scale, even for the renowned dealmakers at AB InBev. Yet a growing
relationship between AB InBev backers 3G Capital and major Coke shareholder
Warren Buffett have led some fee-hungry bankers to imagine the legendary
investor lending a hand, as he did when 3G Capital bought Heinz in 2013.
One other remaining asset is SABMiller's 24-percent stake in Turkish brewer
Anadolu Efes, which is worth about $930 million, based on its current share
According to the companies' arrangement, Efes is the only possible buyer for the
stake, sources say, if AB InBev decides to sell it. Analysts say Turkey is not a
top priority for AB InBev, but note that it could be interested in Efes's 50.3
percent ownership of Coca-Cola Icecek, which sells Coke drinks in 10 countries
around the Middle East and Central Asia. AB InBev declined to comment on its
future plans and Efes was not immediately available.
($1 = 0.8915 euros)
($1 = 0.7541 pounds)
(Additional reporting by Sophie Sassard in London; Editing by Stephen Powell)
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