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London - The head of SABMiller [JSE:SAB], the brewer that’s being bought by Anheuser-Busch InBev for $107bn, said employees have voiced concerns over potential job cuts in the wake of the industry’s biggest takeover.
AB InBev said on Wednesday that it targets an additional $1.4bn in annual savings at the combined company as it plans restructuring in areas including engineering, production, brewing and distribution.
SABMiller chief executive officer Alan Clark said on Thursday it’s not yet possible to say where job losses might fall at the company, which employs about 69 000 people.
“Some employees have expressed concern about stability,” including matters concerning job security, Clark said on a call with reporters. “It’s a time when people press pause, take some time to reflect and think about their careers, but we don’t have a high number of staff sitting around with not much to do.”
It’s not yet clear which SABMiller managers will stay. AB InBev CEO Carlos Brito said on Wednesday it was too early to comment on whether Clark, a 25-year veteran at SABMiller, would be staying on at the combined company.
READ: The real drivers behind SABMiller takeover
AB InBev’s cost-reduction goal, announced on Wednesday in its formal bid for the 120-year-old brewer, raises the bar as SABMiller last month already doubled its savings target to $1.05bn by 2020. Soon after InBev acquired Anheuser-Busch to form AB InBev in 2008, the company eliminated 1 400 jobs.
Brewers of mass-market beer are trying to cut production and distribution costs as they lose market share to smaller independent brands in Europe and North America. Carlsberg, the world’s fourth-largest brewer, announced on Wednesday that it would eliminate 2 000 jobs.
READ: The AB InBev deal: an SAB investor’s view
SABMiller’s earnings before interest, taxes and amortisation advanced 5% to $2.92bn in the six months through September, the London-based maker of Grolsch and Peroni said. Profit rose by 11% in Africa, and by 5% in Latin America.
SABMiller’s profit margin was 23%, hurt by increased competition in Poland and by currency swings, well shy of AB InBev’s margin of about 39%.
“We remain competitors until the deal has been closed,” Clark said. “We had a good first half, stripping out the effects of adverse exchange rates, with strong growth in Africa and Latin America and better mix across all of our regions.”
The measure excludes the effect of acquisitions and currency shifts, which depressed profit by $497m, the company said.
