AB InBev offers to sell SABMiller’s EU breweries

THE acquisition of Hungary’s Dreher in 1993 is listed as an important milestone in SABMiller’s history.

It “signalled the beginning of this game-changing decade of mergers and acquisitions”, the corporate history on SABMiller’s website says.

The acquisition of Dreher was the historical South African Breweries’ first move outside of its home market.

On Friday, Anheuser-Busch InBev (AB InBev) and SABMiller issued a joint statement, saying Dreher, along with other breweries in the Eastern bloc the group acquired in the early stages of its drive to create a global empire, would be offered for sale.

To gain approval from European Union competition authorities for AB InBev’s proposed £44 per share acquisition of SABMiller, the parties committed themselves to sell all of SABMiller’s central and eastern European businesses.

As well as Dreher, SABMiller will sell Poland’s Kompania Piwowarska, which was created from the acquisitions of Lech Brewery in 1995 and Tyskie Brewery in 1996, the year it expanded into Romania by acquiring Vultural, Ursus, and Pitber breweries.

It is also selling its Czech beers acquired soon after its listing on the London Stock Exchange in 1999.

These breweries acquired by SAB (before it merged with US brewer Miller in 2002) add to its commitment to sell Italy’s Peroni, the Netherlands’ Grolsch and UK’s Meantime. A ¤2.55bn offer from Japan’s Asahi has been accepted for Peroni, Grolsch and Meantime, conditional on the global merger receiving competition authority approval in the many jurisdictions involved, leading to spec- ulation that Asahi may also be a possible buyer for Hungarian, Polish, Romanian and Czech beers. “One major brand included in the latest sale is Pilsner Urquell, and its worldwide rights outside the US. Asahi might be a possible suitor. Within the US, Pilsner Urquell is going to Molson Coors, as further efforts are made to gain competition authority approvals,” Warwick Business School professor John Colley said on Friday.

Preparing for competition authority approval in the US and China has seen the dismantling of the joint ventures SABMiller created over the years.

It has also agreed to divest of its 49% stake in CR Snow to joint-venture partner China Resources Beer, and to dispose of its controlling stake in MillerCoors in the US.

An obvious question raised by Friday’s announcement regarding Dreher is: will the sale of the first international brewery SAB acquired also be the last to pave the way for its acquisition by AB InBev?

“I do not think there is anything else left in the portfolio that is an obvious sale.

“There is no material overlap; certainly nothing in Africa,” Avior Capital Markets equity analyst De Wet Schutte said.

“It remains to be seen what else could be sold. In the worstcase scenario, there may be something in Australia.”

SABMiller acquired Foster’s, Australia’s biggest beer company, for $10.2bn in 2011.

SA Institute of Race Relations chief economist Ian Cruickshanks said: “I can’t see AB InBev volunteering to sell anything they don’t have to sell.

“Africa is the prime target, as it is an immature market, with much scope left for growth”

AB InBev declined to comment on whether it would be putting any more of SABMiller’s brands up for sale.

I do not think there is anything else left in the portfolio that is an obvious sale