AB InBev Plans to Sell Grolsch, Peroni Brands
November 29 2015 - 7:40PM
Dow Jones News
Anheuser-Busch InBev NV plans to sell two of SABMiller PLC's
best-known beer brands, as the world's largest brewer seeks to ease
European regulatory concerns over its pending acquisition of its
biggest rival.
AB InBev plans to sell Grolsch and Peroni, both SABMiller brands
that are sold globally, according to a person familiar with the
matter. No deal has been struck and a sale isn't certain, the
person said.
Rights to the Peroni and Grolsch brands in the U.S. will remain
with MillerCoors LLC. As part of its deal to buy SABMiller, AB
InBev agreed to sell SABMiller's 58% stake in the MillerCoors joint
venture to its partner Molson Coors Brewing Co.
Earlier this month, AB InBev agreed to buy SABMiller for about
$108 billion, a deal that will create a brewing behemoth that
dominates about 30% of the world's beer market.
Sanford C. Bernstein analyst Trevor Stirling has noted that, in
Western Europe, AB InBev and SABMiller have potential overlaps in
Italy and the Netherlands, where the pair have combined shares of
30% and 27%, respectively. The companies also have combined share
of more than 20% in the U.K. and Hungary. European regulators
informally use 30% market share as a benchmark when considering
whether a tie-up would give any one company too much sway over the
market.
Peroni and Grolsch are two of SABMiller's four global brands,
the others being Miller Genuine Draft and Pilsner Urquell. The
U.K.'s Sunday Times newspaper first reported on the possible sale
of Peroni and Grolsch.
Analysts at Susquehanna Financial Group LLP had expected AB
InBev to address potential regulatory concerns by selling local
brands, not global ones like Peroni and Grolsch. But selling the
global brands would let the company address those concerns swiftly
and raise additional money to help reduce the $75 billion in debt
it is taking on to finance its takeover of SABMiller.
"Peroni and Grolsch aren't strategic in the bigger scheme of
things," said Pablo Zuanic, an analyst with Susquehanna. "If that's
what it's going to take to appease regulators in European
countries, so be it."
The planned sale also underscores the Belgian brewer's
confidence in its existing portfolio of global brands: Budweiser,
Stella Artois and Corona. Those brands have far more volume than
Peroni and Grolsch. For example, Peroni last year accounted for
only about 1%, or about 2.9 million hectoliters, of SABMiller's
total volume, according to Susquehanna. By comparison, AB InBev
said Budweiser alone produced 44 million hectoliters last year.
AB InBev is far more interested in the geographies and local
brands SABMiller offers than its global brands, according to people
familiar with the acquisition. SABMiller's strong positions in
Africa and Latin American markets like Colombia and Peru offer AB
InBev new markets to sell Budweiser, Stella and Corona. Africa also
gives the company access to the one beer market world-wide that is
expected to grow in the coming years.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com and
Tripp Mickle at Tripp.Mickle@wsj.com
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(END) Dow Jones Newswires
November 29, 2015 19:25 ET (00:25 GMT)
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