USA: AB InBev agrees to sell minority stake in can plants

A group of investors led by New York-based private equity firm Apollo Global Management Inc. has agreed to acquire a 49.9% minority stake in Anheuser-Busch InBev’s U.S.-based metal container plants for about $3 billion, the Milwaukee Business Journal reported on December 29.

The buying consortium includes entities advised by Apollo and its subsidiaries and a group of institutional investors, according to a release by Apollo.

The deal is slated to close by Jan. 8. AB InBev officials said separately that once the transaction is completed, it will create additional shareholder value by “optimizing its business at an attractive price” and generate funds to repay debt, in line with the company’s deleveraging commitments.

Burdened with heavy debt since its $108 billion takeover of SABMiller in 2016, the global brewer has made it a priority to raise cash to pay down its debt, selling its Australian unit to Asahi Group for $11.3 billion, cutting its dividends and attempting a $9.8 billion Hong Kong IPO.

The 2016 SABMiller deal resulted in the sale of the domestic brewer MillerCoors to Molson Coors Brewing Co., now Molson Coors Beverage Co. with headquarters in Chicago and many administrative functions in Milwaukee.

AB InBev will continue to control operations at its U.S.-based can plants, officials said, and inked a long-term supply agreement to cover the company’s metal container needs during its relationship with Apollo.

The deal also gives AB InBev the right, but not the obligation, to buy back the minority stake starting on the fifth anniversary of the transaction’s closing, at pre-determined financial terms.

The Apollo group said the transaction presents “a unique opportunity to invest in high-quality assets with long-term, stable cashflows alongside the world’s leading brewer.” Apollo said it is leveraging its expertise across its integrated investment platform to help AB InBev “optimize its assets and unlock shareholder value amid a complex market environment.”

Belgium-based brewer Anheuser-Busch InBev, with a portfolio of over 500 beer brands, has its North American base in St. Louis. The company reported third-quarter profit attributable to equity holders of $1.04 billion on revenue of $12.82 billion, compared with profit of $3 billion on revenue of $13.17 billion in last year’s quarter.

27 December, 2020