AB InBev to give restricted share owners up to three board seats - CEO
AB InBev [EBR:ABI] and SabMiller [LON:SAB] will give owners of restricted shares the possibility of electing up to three directors to the board once their combination is completed, AB InBev CEO Carlos Brito said during the conference call following the deal announcement.
As the board will comprise of up to 15 members, AB InBev will be entitled to appoint up to nine members with the remaining three being independent, Brito explained.
Today, 11 November, AB InBev reached an agreement to acquire SABMiller for approximately GBP 71bn. The Belgian brewer’s offer comprises a partial share alternative accounting for approximately 41.6% of the total consideration. SABMiller largest shareholders Altria and BEVCO have submitted irrevocable undertakings to vote in favour of the offer and accept to be paid in shares.
The new company will not be listed in London, the CEO confirmed. Its primary listing will be in Brussels and secondary listings are envisioned in Johannesburg and Mexico City, while American Depositary Shares will be listed on the NYSE.
On the South African listing, Brito said it could occur even before the deal completion and certainly “as soon as reasonably practicable”. The new company will retain its regional headquarters in Johannesburg to be in a position to leverage on Africa’s growth opportunities, he said. The top manager did not give a clear indication on whether SABMiller’s London headquarters will be maintained in its current form.
AB InBev and SABMiller see potential to add revenue and cash flow synergies on top of the USD 1.4bn cost synergies arising from their combination, Brito noted.
During the conference call, Brito explained that of the expected USD 1.4bn of cost synergies, 20% should come from procurement and engineering savings, 25% from breweries and distribution efficiency gains, 20% from best practice sharing and 35% from corporate headquarters and overlapping regional headquarters.
Brito noted that this amount will add to the USD 1.050bn cost saving target announced by SABMiller on 9 October 2015, while the revenues and cash flow synergies potential will be clearer going forward.
The two companies are mostly complimentary and committed to take a proactive approach on regulatory issues where they may occur, Brito said, mentioning China and South Africa as examples.
The CEO stressed that today’s announcement on SABMiller’s sale of its 58% stake in Molson Coors (NYSE:TAP) provides an indication on the companies’ level of commitment on this front, in light of anticipated antitrust concerns in US. He declined to say whether the decision to sell the asset came on the back of discussions with US authorities.