World: AB InBev to appoint former Altria Group chief executive Martin Barrington as new chairman

Anheuser-Busch InBev is set to appoint Martin Barrington, the former chief executive of cigarette maker Altria Group, as its new chairman, in a major governance shake-up that will also see 3G Capital’s managing partner Alexandre Behring leave the board, The Financial Times reported on March 19.

Carlos Alberto da Veiga Sicupira, the Brazilian billionaire and one of the founders of 3G Capital, is also set to step down, to be replaced by his daughter Cecilia Sicupira.

According to people familiar with the matter, the changes are intended to telegraph to shareholders that the brewer’s board is determined to reverse a period of steep share price declines. The maker of Budweiser and Stella Artois is struggling to pay down more than $100 bln in debt racked up from acquisitions, and faces slowing demand for beer in its biggest market, the US.

Mr Behring’s departure also shows the board wants to signal its distance from 3G Capital, whose founders were instrumental in turning AB InBev into the world’s largest brewer. 3G is renowned for its debt-fuelled dealmaking and ferocious cost-cutting, but the Brazilian-backed private equity group’s methods have fallen out of favour with investors lately with the implosion of packaged foodmaker Kraft Heinz.

Mr Behring said: “I’ve decided to step down so I can devote more time to my roles as chairman of two publicly listed companies and managing partner at 3G Capital.”

In a statement, AB InBev said the changes would be subject to approval at its annual shareholders’ meeting to be held on April 24.

Mr Barrington has served on the AB InBev board since 2016 as a representative of Marlboro producer Altria, which has owned a 10.2 per cent stake since AB InBev took over SABMiller in 2016. At the time of the deal, AB InBev’s shares sat at roughly €114, but they have slumped to €74.30.

AB InBev will have to change its bylaws to allow Mr Barrington to become chairman since under current rules only an independent director can serve in the role.

He will replace Olivier Goudet, a managing partner at investment company JAB Holdings, who the Financial Times earlier reported was stepping down over concerns that JAB’s activities in beverages overlapped with AB InBev’s forays into non-alcoholic drinks.

AB InBev’s 15-member board only has three independent directors, which is few for a company of its size. The board is under the sway of the powerful Brazilian and Belgian families — the former associated with 3G — who orchestrated a series of deals since the 1990s to create the current company. Together they own roughly 43 per cent of the company’s shares, through a vehicle known as Stichting Anheuser-Busch InBev and other entities acting in concert.

Stéfan Descheemaeker, who is the chief executive of Nomad Foods and represents the Belgian families, will also leave the board. He will be replaced by Sabine Chalmers, who was chief legal officer at AB InBev for over a decade and is now general counsel at the UK telecoms group BT.

Mr Goudet’s seat as an independent director will be filled by Xiaozhi Liu, an automobile industry executive from China.

19 March, 2019