South Africa: SABMiller to exit JSE shift rankings on September 30
September 30 marks the end of an era when SABMiller, which was first listed on the JSE in 1897, will be deleted from all JSE indices. It will be de-listed on October 3. These historic developments follow the decision by SABMiller shareholders to accept Anheuser-Busch InBev’s £45-a-share offer. At a SABMiller shareholders’ meeting on September 28, 95,5 percent of shareholders who were entitled to vote and did vote voted in favour of the offer. The decision will not only change the landscape of the South African beer industry, it is also expected to have a considerable effect on trading patterns on the JSE, The Herald reported.
SABMiller’s R1,3 trillion market capitalisation accounts for 8,6 percent of the JSE’s total and about 5,3 percent of the R24,3 billion in daily trading.
With SABMiller deleted from the FTSE/JSE top 40 index, where it had a weighting of 13 percent, Impala Platinum, which has a market cap of just R49,6 billion, will be able to scrape in with a weighting of just 0,75 percent. Impala Platinum’s inclusion in the index reflects its relatively high investability weighting of 82 percent.
Leanne Parsons, director of information services at the JSE, said the top 40 is ranked in terms of a new methodology, which requires the component companies to have a certain free float of South African shareholders.
The new methodology combines market cap and investable market cap.
Ahead of the completion of the merger, AB InBev had too few South Africans on its shareholder register and therefore its investable market cap was not large enough to make it into the top 40 index.
The South African register is expected to increase before the end of October when the JSE begins its quarterly review of the index components.
AB InBev, which has a market cap of R2.9 trillion, is in the all share index.
AVI, which has an investability weighting of 93 percent, will move into the FTSE/JSE industrial 25 index when SABMiller is deleted on September 30.
During trading on September 29, index trackers had to offload their SABMiller shares and replace them with other top 40 components such as Naspers and Richemont, which have higher weightings in the index.
SABMiller shareholders, who will receive their cash between October 11 and 13, can remain invested in the global beer industry by buying into AB InBev.
From October 11, AB InBev will include the SABMiller operations that have not been sold. The combined sales, required in terms of various global competition authorities, are expected to see SABMiller’s revenue cut by about 50 percent.
The asset sales include SABMiller’s 50 percent stake in the US’ MillerCoors to Molson Coors. In Europe it will sell Peroni, Grolsch and Meantime to Japan’s Asahi and in China it will sell its 49 percent of CR Snow to China Resource Enterprises.
The European authorities have given AB InBev six months from completion of the merger to sell SABMiller’s remaining Central European operations.
In SA the competition authorities have given a three-month deadline for the sale of SABMiller’s 27 percent stake in Distell.
AB InBev CEO Carlos Brito said he was pleased with the shareholders’ decision.
30 September, 2016
