Nigeria: AB InBev commits to investing more than N123 bln in its Nigerian operations

The world’s largest brewer Anheuser-Busch InBev (AB InBev) has committed to investing more than N123 billion in its Nigerian operations in a major capital injection expected to consolidate its push for the greater share of sub-Saharan African markets, The Nation Newspaper reported on November 18.

The multinational drink and brewing giant based in Leuven, Belgium holds majority equity stake of 75.1 per cent in International Breweries Plc. It has committed to injecting new capital into the company through a rights issue.

International Breweries will raise N164.39 billion through a rights issue of 18.266 billion ordinary shares of 50 kobo each at N9 per share which will be pre-allotted on the basis of 17 new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at the close of business on November 6, 2019. With the rights’ ratio, about 13.72 billion ordinary shares of 50 kobo each will be pre-allotted to AB InBev.

Sources said AB InBev was in support of the rights issue and had committed to participating fully in the new capital raising exercise.

International Breweries has filed for final regulatory approvals for the new capital raising, after shareholders approved the recapitalisation exercise.

The N164.39 billion recapitalisation exercise, one of the largest indirect capital injections in the Nigerian capital market, came on the heels of the consolidation of AB InBev’s Nigerian operations under a single corporate entity.

AB InBev had in 2017 merged its three indirect Nigerian subsidiaries - International Breweries Plc, Intafact Beverages Limited and Pabod Breweries Limited. The merger was done through a scheme of merger with International Breweries subsisting as the post-merger company. The merger was seen as a major strategic move by Anheuser-Busch InBev to upend competition and consolidate its Nigerian base for further expansion into the sub-Saharan Africa (SSA).

With the 2017 business combination, AB InBev’s majority equity stake in International Breweries increased to 75.1 per cent. A total of 5.302 billion ordinary shares were issued for the merger. With the supplementary listing of 5.302 billion ordinary shares, the total issued and fully paid up shares of International Breweries had increased from 3.294 billion to 8.596 billion ordinary shares.

The merger was believed to be a major competitive move by AB InBev to give its operations a major nationwide push to increase its market share. International Breweries is located in Ilesa, Osun State in the South West region. Intafact Beverages’ brewery is based in Onitsha, Anambra State in the South-East region while Pabod Breweries is located in Oginigba, Port Harcourt, Rivers Sate in the South-South region.

Prior to the merger, AB InBev held 72.17 per cent majority equity stake in International Breweries through its subsidiary-Brauhaase International Management GMBH. SABMiller Nigeria Holdings BV - another subsidiary of AB InBev - had held 75 per cent and 82.81 per cent majority equity stakes in Intafact and Pabod respectively. Ministry of Finance of Anambra State had held 10 per cent equity stake in Intafact while Ministry of Finance Incorporated of Rivers State held 14.52 per cent equity stake in Pabod.

After the merger of the three companies-SABMiller Nigeria Holdings BV and Brauhaase International Management GMBH hold 47.4 per cent and 27.7 per cent equity stake respectively in International Breweries, giving the foreign majority core investor controlling equity stake of 75.1 per cent. Ministry of Finance of Anambra State holds 4.7 per cent equity stake while other minority shareholders hold the remaining 20.2 per cent equity stake.

17 November, 2019