Brewer to list shares on JSE as ‘domestic’ stock

BRUSSELS: Anheuser-Busch InBev, the world’s largest brewer, said it would list its shares on the Johannesburg Stock Exchange as a “domestic” stock, removing a potential hurdle in its planned $100 billion-plus (R1.5 trillion-plus) takeover of SABMiller.

AB InBev said in a statement yesterday it intended to list there next month, with a “domestic” classification, allowing South African residents to invest in the stock without reference to their foreign portfolio allowances. SABMiller already has a secondary listing on the JSE.

South Africa’s Public Investment Corporation is SABMiller’s fourth-largest shareholder, with a 3.42 percent stake. It and other investors, such as Allan Gray, could have faced problems retaining an interest in a future AB InBev/SABMiller combination if acquirer AB InBev was classified as a foreign stock.

AB InBev has been clear from the outset that it would consider retaining a listing in South Africa, recognising SABMiller’s origins 120 years ago selling Castle Lager in goldprospecting fields around Joburg.

The Belgium-based brewer’s reputation as a cost slasher has alarmed local unions in a country with a 25 percent unemployment rate and where the government has a track record of delaying deals while imposing strict conditions to prevent job losses.

South African authorities have said they are watching the merger for signs of possible tax erosion, while tripartite alliance partner Cosatu has previously said it opposed the deal.

AB InBev has not talked about the implications for jobs of its planned merger, but analysts say it would be unlikely to axe heavily in Africa, given that the merger is securing it access to the continent.

Post-merger job cuts tend to occur where businesses overlap. – Reuters