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BRAZIL : Regulator rules in favor of AmBev brewer deal.

Brazil's securities regulator ruled against complaints made by AmBev minority stockholders claiming that a deal with Interbrew would dilute the value of their investments. BY CHARLES PENTY, Bloomberg News

Brazil's securities regulator ruled the acquisition of Cia. de Bebidas das Americas, Brazil's biggest brewer, by Interbrew SA doesn't hurt the interests of minority investors. The preliminary ruling rebuffs a complaint by Previ-Caixa de Previdencia dos Funcionarios do Banco do Brasil, Brazil's biggest pension fund and an AmBev shareholder, which had called for a probe into the transaction with Interbrew announced in March.

The regulator's board still needs to approve it and Previ can appeal, a spokesman for the regulator said in an e-mail.Previ's complaint mirrored criticism from other holders of AmBev's nonvoting shares who said the transaction, which will lead the Brazilian brewer to take over Interbrew's Labatt unit, would dilute the value of their investments.

In an interview in June, Marcelo Trindade, Brazil's newly appointed securities regulator, said investors shouldn't buy shares in companies that don't protect the rights of minority shareholders in takeovers, citing AmBev as an example.

Under the terms of the transaction, the controlling group of shareholders, led by billionaire Jorge Paulo Lemann will net 3.3 billion euros ($4.06 billion) in Interbrew stock.Other holders of voting shares will also be paid 80 percent of the price of the controlling group's shares transferred to Interbrew. Holders of nonvoting stock, like Previ, were denied so-called "tag-along rights" under the transaction and don't qualify for the premium paid for AmBev's voting shares.

AmBev's preferred shares have fallen 19 percent since their peak of 815 reais at the start of March. The shares fell 14.27 reais, or 2.2 percent, in trading in Sao Paulo, at 12:43 New York time. The company's shareholders are due to vote on the incorporation of Labatt on Aug. 27.


21 August, 2004