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AB InBev offers SAB managers severance packages amid changes

Jan 23 2017 14:26
Matthew le Cordeur

Cape Town – Anheuser-Busch (AB) InBev has offered managers at South African Breweries (SAB) a voluntary severance offer programme, as the global beer conglomerate begins merging operations between the two massive firms.

“We can confirm that a VSO (voluntary severance offer) programme for certain management-level employees based in South Africa has been embarked upon,” Robyn Chalmers, head of media and communications at SAB, told Fin24 on Monday.

Chalmers dispelled media reports that over 1 000 managerial roles would be affected.

“It is important to note that no employee will be forcibly retrenched as a result of the merger,” she said. “It is too early in the process to say how many people may opt for the voluntary offer.

“It is thus incorrect to say that 1 000 managerial roles will be reduced, as has previously been reported,” she said.

Chalmers said the voluntary severance offer programme arrangements are in keeping with the conditions AB InBev agreed to with the South African Competition Tribunal.

These include that there will be no forced retrenchments in perpetuity in relation to the merger with SABMiller; employment numbers must be maintained for five years; and there may be no voluntary separation arrangements for employees at the bargaining unit level during the five year period.

The severance programme, which is entirely voluntary, has been made available only to certain employees at management level and above, and not to those who are at bargaining unit level, Chalmers said.

“Africa, including South Africa, will play a big role in the future of the combined company,” said Chalmers. “We are introducing some changes to processes, ways of working and the structure of the business and roles.

“We understand that during this period of change some employees may wish to voluntarily exit our business, which is why we have introduced a VSO (voluntary severance offer).”

What AB InBev promised

On April 14, AB InBev agreed to create a R1bn fund that will support the South African beer industry and protect jobs in the country to smooth approval for its proposed, Reuters explained in 2016.

“We recognise South African Breweries' important contribution to the country's economy and society and look forward to building on this through the commitments we have made on jobs and employment, localisation of inputs and production, support for small suppliers and the promotion of black economic empowerment,” AB InBev CEO Carlos Brito said when they got tribunal approval.

In 2015, AB InBev agreed to buy SABMiller for £68bn (about R1.4trn at the time of the agreement and now worth R1.14trn according to currency exchange rates).

The deal was officially passed in September 2016 after months of antitrust clearance around the world, which saw SABMiller offload many of its international brands, like Miller.

AB InBev plans to cut about 3% of its enlarged workforce in the three years after its takeover of SABMiller as it seeks to maximise savings from the combination of the world’s largest brewers, Bloomberg reported in 2016.

The reductions will be implemented gradually and in phases, the companies said; about 5 500 positions are likely to be eliminated, a person with direct knowledge of the matter told Bloomberg.

“AB InBev, the world’s largest brewer, said the estimate for job cuts doesn’t include areas such as sales, where it hasn’t made advanced plans for integration due to regulatory restrictions,” Bloomberg reported.

“The company said SABMiller’s head office will be integrated into its headquarters in Leuven, Belgium, and management office in New York.”


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ab inbev  |  sab  |  sabmiller  |  beer
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