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AB InBev to dominate top jobs after SABMiller deal

Aug 04 2016 11:06
with Bloomberg

London - Anheuser Busch (AB) InBev [JSE:ANB] managers will take all but one of 19 key positions following the brewer's R1.45trn-plus takeover of rival SABMiller [JSE:SAB], according to details of the transaction announced on Thursday.

The deal, sweetened last week to help make up for a drop in the British currency, has been approved by both companies' boards but still needs to be voted on by shareholders, some of whom oppose the deal.

AB InBev is known for its cost-cutting and centralised control, which some analysts have said may be tough to impose on all corners of SAB's business, with its joint ventures and equity stakes in markets such as Turkey and Africa.

READ: Business Unity chief Mabuza gets top spot in SABMiller merger

AB InBev, the maker of Budweiser and Stella Artois, said the new company - which has yet to be named - would continue to be based in its home town of Leuven, Belgium, while its operations would be managed from New York.

SAB's offices in Woking, outside of London, will be kept open for a transitional period, but its central London headquarters will be wound down. The bulk of SAB's European businesses are being sold as part of the deal.

"It looks as if all the SAB group and regional HQs will be eventually phased out," said Bernstein Research analysts.

The new company will be run by teams of "functional chiefs" and "zone presidents", both reporting to AB InBev Chief Executive Carlos Brito. All but one of those 19 positions will be held by current AB InBev executives.

There was no mention of roles for SABMiller's CEO Alan Clark or finance chief Domenic De Lorenzo in the new company.

Of SAB's 576 corporate roles in the UK, 523 are in Woking and 51 in London.

AB InBev said SAB's general counsel John Davidson, human resources director Johann Nel and managing director for Africa Mark Bowman, had agreed to stay for a transition period of at least six months to help with "integration, talent retention and stakeholder management".

The new company will be organised into nine geographical zones, with existing SABMiller hubs in Miami, Hong Kong and Beijing phased out within a few months after deal closes, which is expected in October.

AB InBev has agreed to sell SAB's western European brands Peroni, Grolsch and Meantime, to Japan's Asahi. It has also pledged to sell SAB's Eastern European business, which includes the Pilsner Urquell brand, though a buyer has not been agreed.

SAB's joint ventures in the United States and China will be taken over by their respective partners when the deal goes through.

The main leadership team includes SABMiller’s South Africa managing director Mauricio Levya, who will run the Middle Americas region. Mark Bowman, SABMiller’s long-time African chief, will remain for a transitional period of at least six months, the company said.

The deal will give AB InBev its first foothold in Africa, a fast-growing region for beer sales that accounted for 31% of SABMiller’s revenue last year. Given the continent’s importance to the deal, the departure of Bowman is a surprise, Javier Gonzalez Lastra, an analyst at Berenberg, told Bloomberg.

"The most prominent name there is Bowman; people probably expected him to stay," the analyst said by phone. "It’s difficult to speculate on the reasons from the outside. If he has aspirations to become CEO of another company and be more visible, maybe ABI is not the right place."

Existing SABMiller business hubs in Miami, Hong Kong and Beijing will be shuttered within a few months of the deal’s completion, AB InBev said.

Jabu Mabuza, chairperson of South African phone company Telkom SA and a former CEO of the Tsogo Sun hotel and casino business, which SABMiller once held a stake in, will chair the brewer’s new Africa board along with Brito, it also said.

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ab inbev  |  sabmiller  |  acquisitions  |  industrial
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