The £1.5bn fee bonanza
Advisers toast £79bn merger of brewing giants but time is called on 5,500 jobs
ADVISERS will land a massive fee bonanza from the £79bn mega merger of two of the world’s biggest brewers – but the tie-up will also lead to around 5,500 job losses.
Budweiser brewer Anheuser-Busch InBev has agreed to buy London-listed SAB Miller in one of the biggest takeover deals of all time.
The merger will bring together brands including Fosters, Stella Artois and Corona in a brewing giant that will make 30pc of the world’s beer – enough to fill 31,320 Olympic-sized swimming pools.
As part of the deal nearly £1.5bn will be paid to advisers, according to documents released yesterday.
AB InBev will pay the lion’s share – about £1.3bn – with £650m going to financiers including Lazard, Barclays and BNP Paribas.
A further £140m will be paid to lawyers including Freshfields Bruckhaus Deringer and Clifford Chance while accountants Deloitte will receive £11m and City PR firm Brunswick will get £15m. AB InBev will also pay £359m in taxes and other expenses, which include stamp duty to HM Revenue and Customs.
SAB Miller will pay £152m, which includes £86m for financial and broking advice to JP Morgan, Morgan Stanley, Goldman Sachs and Mayfair-based Robey Warshaw. Some £58m will be paid in legal advice to lawyers including Linklaters and PR firm Finsbury will take home £6.8m.
The deal is great news for the advisers – many based in London – but the documents also reveal AB InBev plans to cut 3pc of its workforce following the merger.
The job cuts will form part of £1bn of annual savings that AB InBev said it is seeking from the takeover and will be implemented ‘gradually, in phases, over a threeyear period following completion’, a spokesman said. It said the combined group’s headquarters will be in Belgium, and the management office would remain in New York, meaning the SAB Miller UK offices would close.
‘This integration is subject to consultation with the potentially affected SAB Miller employees but is likely to involve the loss of roles at SAB Miller’s headquarters in Woking,’ the spokesman added.
The brewing giants were accused of a ‘disgusting U-turn’ earlier this month after a pledge to protect British jobs was abandoned.
Workers had been told SAB Miller roles in the UK would be protected, including 523 back office staff in Woking and 51 in London. But AB InBev later revealed the new headquarters would be abroad, and that Woking jobs would be moved to Belgium in about six months. AB InBev insisted it ‘did not commit to not make any redundancies’.
At the end of 2015, AB InBev employed more than 150,000 worldwide, while SAB Miller employed another 70,000.
While the firm did not specify the total number of the job cuts yesterday, it has agreed to sell a number of assets from the combined company to win regulatory approval. In March it announced it would sell SAB Miller’s 49pc stake in CR Snow to China Resources Beer. And in April it accepted a £2.1bn offer to buy the beer brands Grolsch and Peroni to Japan- based Asahi Group Holdings.
However, the transfer of jobs overseas is another blow to British business, with yet more brands falling into foreign hands.
Consumers are still smarting after the loss of chocolate brand Cadbury to US giant Kraft in 2010, when Cadbury’s UK factory in Keynsham near Bristol was shut despite previous assurances it would remain open.
The latest deal will see shareholders in SAB Miller vote on the deal next month.
Shares in SAB Miller rose 0.27pc or 12p to 4382p.