SABMiller exit from JSE shifts rankings

Beer giant’s departure opens up top 40 index spot for Implats

FRIDAY marks the end of an era when SABMiller, which was first listed on the JSE in 1897, will be deleted from all JSE indices. It will be delisted on Monday.

These historic developments follow the decision by SABMiller shareholders to accept Anheuser-Busch InBev’s £45-ashare offer.

At a SABMiller shareholders’ meeting on Wednesday morning 95.5% of shareholders who were entitled to vote and did vote voted in favour of the offer.

The decision will not only change the landscape of the South African beer industry, it is also expected to have a considerable effect on trading patterns on the JSE. SABMiller’s R1.3-tril- lion market capitalisation accounts for 8.6% of the JSE’s total and about 5.3% of the R24.3bn in daily trading.

With SABMiller deleted from the FTSE/JSE top 40 index, where it had a weighting of 13%, Impala Platinum, which has a market cap of just R49.6bn, will be able to scrape in with a weighting of just 0.75%. Impala Platinum’s inclusion in the index reflects its relatively high investability weighting of 82%.

Leanne Parsons, director of information services at the JSE, said the top 40 is ranked in terms of a new methodology that requires the component companies to have a certain free float of South African shareholders.

The new methodology combines market cap and investable market cap.

Ahead of the completion of the merger, AB InBev had too few South Africans on its shareholder register and therefore its investable market cap was not large enough to make it into the top 40 index.

The South African register is expected to increase before the end of October when the JSE begins its quarterly review of the index components.

AB InBev, which has a market cap of R2.9-trillion, is in the all share index.

AVI, which has an investability weighting of 93%, will move into the FTSE/JSE industrial 25 index when SABMiller is deleted on Friday.

During trading on Thursday, index trackers will have to offload their SABMiller shares and replace them with other top 40 components such as Naspers and Richemont, which will have higher weightings in the index.

SABMiller shareholders, who will receive their cash between October 11 and 13, can remain invested in the global beer industry by buying into AB InBev.

From October 11, AB InBev will include the SABMiller operations that have not been sold. The combined sales, required in terms of various global competition authorities, are expected to see SABMiller’s revenue cut by about 50%.

The asset sales include SABMiller’s 50% stake in the US’s MillerCoors to Molson Coors. In Europe, it will sell Peroni, Grolsch and Meantime to Japan’s Asahi and in China, it will sell its 49% of CR Snow to China Resource Enterprises.

The European authorities have given AB InBev six months from completion of the merger to sell SABMiller’s remaining Central European operations.

In SA the competition authorities have given a three-month deadline for the sale of SABMiller’s 27% stake in Distell.

AB InBev CEO Carlos Brito said he was pleased with the shareholders’ decision.

SABMiller’s asset sales include MillerCoors and Peroni stakes