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Chile's largest brewer CCU said on March 17 that Anheuser-Busch Cos. Inc., maker of Budweiser beer, may sell its 20 % stake in the company after failing last year to challenge rival brewer Heineken's entry into the Chilean firm, Reuters revealed. Shares of CCU, which stands for Compania Cervecerias Unidas, fell sharply on the news. "Nothing is resolved yet and for that reason the market interpreted that the sale price would be lower than the current price. It's a bad sign for the stock in the short term," said Francisco Montaner, general manager of Euroamerica brokerage in Santiago.

CCU said it would retain distribution agreements with Anheuser-Busch, but Montaner said this could be a further sign the American brewer is weakening in South America, after Belgium's Interbrew, announced earlier this month that it would consolidate its presence in the region, buying Brazilian giant AmBev. "My interpretation is that Anheuser-Busch came too late to the South American beer market," he said.

Markets have speculated that Anheuser-Busch might withdraw from CCU since it protested last year after Dutch brewer Heineken, the world's third biggest brewer, indirectly bought a controlling stake in the company. In a note to Chile's stock market regulator, CCU said its board of directors had approved an "eventual secondary offer" by Anheuser of its shares but said such a move would not alter CCU's contracts to distribute the Budweiser brand in Argentina and Chile.

Analysts said it was the most explicit sign yet that Anheuser was seriously considering pulling out of CCU. "This doesn't necessarily mean it's going to happen but it increases the possibility of it happening," said Cristian Moreno, research chief at Santander Investment Chile.

CCU is 61.6 % owned by holding company Inversiones y Renta, or IRSA, in which Chile's Quinenco has 50 % and Heineken has 50 % as of early 2003. After Heineken bought into IRSA, Anheuser filed a complaint with Chile's stock market regulator alleging that Heineken should have made a public offer for shares, saying it was unfair that it grabbed such a large stake indirectly via another major shareholder. The authorities ruled against Anheuser.

Moreno said the withdrawal of Anheuser Busch, probably by selling shares in the market, is good news for CCU.
"We see it as positive for the stock in the long term because it resolves the problem of the company's ownership structure but keeps the Budweiser distribution contracts," said Moreno.


18 March, 2004