AB InBev to sell Central, Eastern European brewing assets to win EU antitrust approval

29 Apr 2016


Anheuser-Busch InBev has offered to sell the Central and Eastern European brewing assets of SABMiller, before the European regulator takes a call on whether to approve its $104 billion proposed acquisition of its London-based rival.

AB InBev today said that it would sell SABMiller's assets in the Czech Republic, Hungary, Poland, Romania and Slovakia, including the rights to Pilsner Urquell outside the US.

Analysts have valued SAB's eastern European assets between $5 billion and $7 billion, based on multiples of earnings or price per volume.

AB InBev, which owns Stella Artois, Budweiser and Corona, has already struck a deal to sell SABMiller's 58-per cent stake in MillerCoors to Molson Coors for $12 billion in order to allay competition concerns in the US.

Earlier this month, AB InBev agreed to sell Peroni, Grolsch and Meantime European beer brands to Asahi Group Holdings Ltd for $2.9 billion, clearing another hurdle in the European brewer's efforts to win regulatory approval.

The purchase by Asahi, which covers the premium brands and their related businesses in Italy, the Netherlands, the UK and internationally, is conditional on the SABMiller deal going through.

In China, SABMiller is selling its 49-per cent stake in CR Snow to joint-venture partner China Resources Beer, and last week, it agreed to protect South African jobs and create a $69-million fund to support the local beer industry to help seal approval from the South African Competition Commission.

Analysts are surprised that AB InBev is selling the Eastern European brewing assets of SABMiller since it has historically been weak in Eastern Europe.

SABMiller is the third-largest brewer in Eastern Europe, with a 14 per cent market share, while AB InBev holds a mere 8 per cent.

The European Commission has said that it will make a decision on 24 May. It could either approve the acquisition or take it forward to phase-two review, but it appears that AB InBev plans to obtain approval in the first phase itself as the second phase could be time consuming.

In October 2015, AB InBev offered to buy SABMiller for £44 ($68) per share in order to become the world's biggest beer company with about 30 per cent share of the global beer market.

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