Mega beer deal requires minister’s nod
A SIGNIFICANT cross-border transaction such as the proposed takeover of SABMiller by larger rival Anheuser-Busch (AB) InBev might require approval from Finance Minister Nhlanhla Nene, the National Treasury said yesterday.
SABMiller had not yet made an application to the Reserve Bank for this approval so it was premature to comment, the Treasury added.
In addition, the Treasury said it was a matter of public record that some conditions were imposed on SAB when it shifted its domicile from South Africa to London.
“Such conditions generally relate to the South African public interest, and relate to the South African holding company operations and assets or any sale of proceeds.”
It said Nene would apply his mind to any such application to ensure compliance with existing conditions and the impact on the economy.
South Africa has supported its companies when seeking to grow from their domestic base.
“South Africa has supported its companies when seeking to grow from their domestic base to the rest of the world, taking into account objective factors like the impact on the economy and the tax issue.”
AB InBev has offered to buy SABMiller for about $106 billion (R1.3 trillion) and has won the SABMiller board support for this offer.
SABMiller’s shares rose for the second day running at the JSE yesterday. The stock closed 1.51 percent up at R817.17, putting the value of SABMiller at R1.32 trillion, after earlier climbing to a record high on the JSE of R819.99.
Economists have said the merger is a potential windfall for the Treasury.
Inflows
About 10 percent of SABMiller shareholders were local investors and fund managers, giving scope for as much as $10bn in inflows from the deal, CEE Market Watch said in a note yesterday. That is nearly 60 percent of South Africa’s current account deficit.
Annabel Bishop, the chief economist at Investec, has said potentially R70bn will flow into the country.
This could provide South Africa with a much-needed windfall to build reserves.
Chris Hart, a global investment strategist on wealth and investment at Standard Bank, said this could be a mini-windfall for the Treasury, but not a game changer.
Cosatu said yesterday that the government, regulators and pension funds should not agree to the takeover of SABMiller over concerns that jobs and tax revenue would be lost.
The labour federation said it supported the stance taken by its affiliate, the Food and Allied Workers Union, which said on Tuesday that it would oppose the merger.
“We will never allow a situation where the South African offices of SABMiller are relocated away from South Africa and the local revenues are spiralled out of the country to the detriment of the entire economy,” said Cosatu.