E-Malt.com News article: Brazil & Belgium: InBev and AmBev announced merger of Brazilian entities

InBev announced on July 11 the proposed merger between InBev Holding Brasil and AmBev. The merger will lead to financial benefits for shareholders.

AmBev’s Board of Directors called on July 11 an extraordinary shareholders meeting to be held on July 28, 2005. The meeting will decide on the merger into AmBev of InBev Holding Brasil, the 100 % InBev Brazilian subsidiary owning a 55.5% economic stake in AmBev.

The Merger is part of a corporate structure simplification which already resulted in the merger of other Brazilian companies into AmBev and into InBev Holding Brasil.

The Merger will result in financial benefits to AmBev and InBev. The goodwill resulting from the acquisition of AmBev’s shares through (1) the Labatt contribution dated August 27, 2004 and (2) the mandatory tender offer for AmBev common shares dated March 29, 2005 will be, following the Merger, amortized by AmBev up to 10 years, according to the applicable tax legislation. The total goodwill arising from the 2 transactions detailed above, amounts to 8,5 billion BRL [3 billion EUR at an exchange rate of 1 EUR = 2.8 BRL].

According to Brazilian legislation, the goodwill tax benefits resulting from the Merger will be capitalized into AmBev to the advantage of InBev Holding Brasil’s shareholder, InBev – upon the actual obtaining of the tax benefit by AmBev. Nevertheless, all AmBev shareholders will have preemptive rights in the subscription of the capital increase resulting therefrom. InBev and AmBev propose to capitalize 70% of the tax benefits obtained at the end of each fiscal year. The non-capitalized balance of 30% of the tax benefits obtained would, taking into account AmBev’s best interest and whenever possible, be distributed to AmBev’s shareholders as dividend or as interest on equity.

InBev is a publicly traded company (Euronext: INB) based in Leuven, Belgium. The company's origins date back to 1366, and today it is the leading global brewer by volume. InBev's strategy is to strengthen its local platforms by building significant positions in the world's major beer markets through organic growth, world-class efficiency, targeted acquisitions, and by putting consumers first. InBev has a portfolio of more than 200 brands, including Stella Artois®, Brahma®, Beck's®, Skol®-the third-largest selling beer brand in the world-Leffe®, Hoegaarden®, Staropramen® and Bass®. InBev employs some 77,000 people, running operations in over 30 countries across the Americas, Europe and Asia Pacific. In 2004, InBev realized a net turnover of 8.57 billion euro (including four months of AmBev). For further information visit www.inbev.com.


13 July, 2005