Anheuser-Busch InBev is poised to announce plans to sell a 49 per cent stake in Snow beer, of China, as it seeks to resolve potential regulatory barriers to its £71 billion takeover of SABMiller.
The Budweiser and Stella Artois maker will announce that it has agreed terms on the sale of SABMiller’s stake in CR Snow to China Resources Enterprise, its joint venture partner, for an estimated sum of more than $2 billion.
AB InBev has already announced the disposal of SABMiller’s 58 per cent stake in MillerCoors, its US joint venture, to Molson Coors, for $12 billion, plus the sale of the Peroni, Grolsch and Meantime brands to Asahi, of Japan, for €2.55 billion.
Although the mooted proceeds from the Snow deal of a little more than $2 billion look low, with some analysts valuing the stake at closer to $5 billion, AB InBev has a weak bargaining position given time constraints and China Resources’ right of first refusal.
SABMiller entered China in 1994 through the joint venture with China Resources and since then Snow lager has grown to become the world’s biggest-selling beer, albeit one that is still almost unknown outside China. Its joint venture has a 23 per cent market share.
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For its part, AB InBev has been in China since 1984 and has built a business that has a market share of about 16 per cent and includes brands including Harbin, Sedrin, Double Deer and Jinling.
A resolution of potential regulatory problems in China would leave South Africa as the last significant hurdle for the world’s biggest brewer to overcome as it seeks to compete the takeover of the No 2.
Although the merger would not create a competition problem, the country’s regulatory bodies may delay approval pending negotiations on issues including employment, social and economic welfare and black empowerment.
The wider public interest mandate of South Africa’s three-tier regulatory authority — the competition commission, the competition tribunal and the competition appeal court — could force AB InBev to give assurances on small and medium-sized suppliers and the spread of ownership.
None of the parties involved would comment.