AB InBev set to cheer up JSE with secondary listing

ANHEUSER-Busch InBev (AB InBev) could become the largest company on the JSE within a few weeks, as the Belgian brewing giant plans to list its own shares on the JSE ahead of its $100bnplus purchase of SABMiller.

But the London Stock Exchange will be the loser once the deal closes, when SABMiller, which moved its primary listing to London from Johannesburg 15 years ago, disappears from the LSE.

Announcing the terms of its longawaited formal offer for SABMiller yesterday, AB InBev said the newly merged group will be listed on Euronext Brussels, with secondary listings in Johannesburg, New York and Mexico.

It will apply to the JSE, “as soon as practically possible”, said AB InBev CE Carlos Brito.

Analysts said the move would help familiarise SA investors with the Belgian-Brazilian brewer and enable them to start buying into the merger ahead of time, smoothing the transition and the foreign exchange flows.

JSE CE Nicky Newton-King said yesterday that if AB InBev approached the JSE, it would be delighted to consider an inward listing. “Were they to meet the requirements, we do have rules in place which allow for companies which come from large and established jurisdictions to have fast-track listings,” she said.

The JSE has done fast-track listings

in as little as three weeks.

Ms Newton-King said investors would appreciate the diversification of investment opportunity such a listing would provide.

Though Mr Brito visited SA recently, he would not be drawn on whether AB InBev had had talks with the government or regulators, saying only that now the deal had the approval of both companies’ boards.

“We can now shift gears and start talking to all relevant stakeholders and SA is a key country in which we will be talking to stakeholders. SA and Africa will play an important role in this combined entity,” he said.

The merged entity’s regional headquarters for Africa will remain in Johannesburg, it will have a local board in SA, and retain the Zenzele black empowerment scheme.

AB InBev was taking a “proactive approach” to regulatory and contractual issues, Mr Brito said. It would sell SABMiller’s interest in Miller Coors in the US, addressing antitrust issues. He said that the deal was expected to yield pretax cost synergies of at least $1.4bn per annum, in addition to the $1.05bn of cost savings already identified by SABMiller.

Investec Asset Management analyst John Thompson said looking at the other transactions AB InBev had done, the group should easily be able to achieve those synergies. “But it is going to hurt, across the globe,” he said.