UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________________________
FORM 8-K
_____________________________________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 11, 2015
________________________________________________________________________________________________________________
ALTRIA GROUP, INC.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________________________________________
|
| | | | |
Virginia | | 1-08940 | | 13-3260245 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
|
| | |
6601 West Broad Street, Richmond, Virginia | | 23230 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (804) 274-2200
(Former name or former address, if changed since last report.)
___________________________________________________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
| |
¨
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
| |
¨
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
| |
¨
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
| |
¨
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01. Regulation FD Disclosure.
On November 11, 2015, Altria Group, Inc. issued a press release in connection with the firm offer by Anheuser-Busch InBev SA/NV to effect a business combination with SABMiller plc in a cash and stock transaction valued at approximately $107 billion. A copy of the press release is attached as Exhibit 99.1 and incorporated by reference in this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 7.01 of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
Item 8.01. Other Events.
On November 11, 2015, Anheuser-Busch InBev SA/NV (“AB InBev”) announced its firm offer to effect a business combination with SABMiller plc (“SABMiller”) in a cash and stock transaction valued at approximately $107 billion. Under the terms of the transaction, SABMiller shareholders will receive 44 British pounds in cash for each SABMiller share, with a partial share alternative (“PSA”) available for approximately 41% of the SABMiller shares.
Under the terms of the PSA, SABMiller shareholders may elect to receive for each SABMiller share held (i) 0.483969 restricted shares (the “Restricted Shares”) in a newly formed Belgian company (“NewCo”) that will own the combined SABMiller and AB InBev business plus (ii) 3.7788 British pounds in cash. On November 10, 2015, the Board of Directors of Altria Group, Inc. (“Altria”) authorized Altria to provide an irrevocable undertaking to vote Altria’s shares of SABMiller in favor of the proposed transaction and to elect the PSA (the “Irrevocable Undertaking”). Altria delivered the Irrevocable Undertaking on November 11, 2015.
If the transaction is completed, NewCo will acquire SABMiller and, following the closing of that acquisition, AB InBev will merge into NewCo. Altria expects to exchange its approximate 27% economic and voting interest in SABMiller for an interest that will be converted into Restricted Shares representing an approximate 10.5% economic and voting interest in NewCo plus approximately $2.5 billion in cash (subject to proration as further described below).
The Restricted Shares of NewCo will:
| |
• | be unlisted and not admitted to trading on any stock exchange; |
| |
• | be subject to a five-year lock-up from closing (subject to limited exceptions); |
| |
• | be convertible into ordinary shares of NewCo on a one-for-one basis after the end of this five-year lock-up period; |
| |
• | rank equally with ordinary shares of NewCo with regards to dividends and voting rights; and |
| |
• | have director nomination rights with respect to NewCo. |
With the exception of the cash consideration Altria expects to receive in the transaction, Altria expects that the transaction will result in a deferral of United States corporate income tax for Altria. Altria and
AB InBev have entered into a tax matters agreement providing for certain covenants, representations and warranties and indemnification obligations of AB InBev and NewCo in connection with the tax treatment of the transaction and the provision of information necessary to assist Altria in connection with its United States federal income tax reporting (the “Tax Matters Agreement”).
Based on the anticipated structure of the transaction, Altria expects to account for its investment in NewCo under the equity method of accounting. Altria and AB InBev have entered into an information rights agreement pursuant to which, following completion of the transaction, NewCo will provide Altria with certain financial information necessary to assist Altria in connection with its financial reporting, financial controls and financial planning (the “Information Rights Agreement”).
Upon closing of the transaction, Altria estimates that it will record a one-time pre-tax accounting gain of approximately $12 billion, or $8 billion after-tax. This estimate is based on the AB InBev share price and British pound to United States dollar exchange rate as of November 10, 2015, and the book value of Altria’s investment in SABMiller at September 30, 2015. The actual gain recorded at closing may vary significantly from this estimate based on changes to these factors and any proration of Restricted Shares as discussed further below.
If the transaction is completed, Altria expects to receive Restricted Shares under the PSA representing approximately 10.5% economic and voting interest in NewCo; however, the number of shares that Altria receives and its corresponding percentage ownership of NewCo at closing are subject to proration because the PSA limits the maximum number of shares that may be issued under the offer to 326 million NewCo Restricted Shares. To the extent that elections for the PSA exceed this maximum number and cannot be satisfied in full, the equity portion of all PSA elections will be adjusted downwards on a pro rata basis. It is possible that significant proration could (i) reduce Altria’s projected percentage ownership of NewCo; (ii) increase the amount of cash that Altria receives; (iii) increase the amount of the pre-tax gain recorded by Altria; (iv) impose additional tax liabilities on Altria; and (v) impact Altria’s ability to account for its investment in NewCo under the equity method of accounting.
The transaction is subject to certain closing conditions, including without limitation shareholder approvals of both SABMiller and AB InBev, and receiving the required regulatory approvals.
On November 11, 2015 Altria entered into a derivative financial instrument to hedge Altria’s exposure to the British pound in conjunction with the cash consideration that Altria expects to receive under the PSA. This derivative financial instrument does not qualify for hedge accounting; therefore changes in the fair value of this instrument will be recorded as a reported pre-tax gain or loss on Altria’s consolidated statement of earnings in the periods the changes occur.
The foregoing descriptions of the Irrevocable Undertaking, the Tax Matters Agreement and the Information Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Irrevocable Undertaking, the Tax Matters Agreement and the Information Rights Agreement, copies of which are attached as Exhibit 99.2, Exhibit 99.3 and Exhibit 99.4, respectively, and incorporated by reference in this Current Report on Form 8-K.
Forward-Looking and Cautionary Statements
This Current Report on Form 8-K contains forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this Current Report on Form 8-K are
described in Altria’s publicly filed reports, including its Annual Report on Form 10-K for the year ended December 31, 2014 and its Quarterly Report on Form 10-Q for the period ended September 30, 2015. In addition, the factors related to AB InBev’s proposed transaction to effect a business combination with SABMiller include the following: the risk that one or more conditions to closing the proposed transaction may not be satisfied; the risk that a shareholder or regulatory approval required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; AB InBev’s inability to achieve the contemplated synergies and value creation from the proposed transaction; the fact that Altria’s election to receive transaction consideration in the form of equity is subject to proration, which may result in a reduced percentage ownership of the combined company, additional tax liabilities and/or changes in Altria’s accounting treatment of the investment; the fact that the equity securities to be received by Altria as transaction consideration will be subject to restrictions on transfer lasting five years from completion of the proposed transaction; the risk that AB InBev’s share price, which affects the value of Altria’s transaction consideration, will fluctuate based on a variety of factors which are beyond Altria’s control; the fact that the strengthening of the U.S. dollar against the British pound would adversely affect Altria’s cash consideration as the British pound would translate into fewer U.S. dollars; and the risk that the tax treatment of Altria’s transaction consideration is not guaranteed and that the tax treatment of the dividends Altria receives from NewCo may not be as favorable as dividends from SABMiller.
| |
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
|
| | |
| 99.1 | Altria Group, Inc. Press Release, dated November 11, 2015 (furnished under Item 7.01) |
| 99.2 | Deed of Irrevocable Undertaking, dated November 11, 2015, between Altria Group, Inc. and Anheuser-Busch InBev SA/NV |
| 99.3 | Tax Matters Agreement, dated November 11, 2015, between Altria Group, Inc. and Anheuser-Busch InBev SA/NV |
| 99.4 | Information Rights Agreement, dated November 11, 2015, between Altria Group, Inc. and Anheuser-Busch InBev SA/NV |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| | | |
| ALTRIA GROUP, INC. |
| | | |
| By: | | /s/ W. HILDEBRANDT SURGNER, JR. |
| Name: | | W. Hildebrandt Surgner, Jr. |
| Title: | | Corporate Secretary and |
| | | Senior Assistant General Counsel |
DATE: November 12, 2015
EXHIBIT INDEX
|
| | |
Exhibit No. | | Description |
| | |
99.1 | | Altria Group, Inc. Press Release, dated November 11, 2015 (furnished under Item 7.01) |
| | |
99.2 | | Deed of Irrevocable Undertaking, dated November 11, 2015, between Altria Group, Inc. and Anheuser-Busch InBev SA/NV
|
| | |
99.3 | | Tax Matters Agreement, dated November 11, 2015, between Altria Group, Inc. and Anheuser-Busch InBev SA/NV
|
| | |
99.4 | | Information Rights Agreement, dated November 11, 2015, between Altria Group, Inc. and Anheuser-Busch InBev SA/NV
|
Exhibit 99.1
Altria Group Supports Anheuser-Busch InBev’s Proposed Business Combination with SABMiller
RICHMOND, Va. (November 11, 2015) - Altria Group, Inc. (Altria) is pleased that Anheuser-Busch InBev SA/NV (AB InBev) today announced its firm offer to effect a business combination with SABMiller plc (SABMiller) to create the largest beer company in the world in a cash and stock transaction valued at approximately $107 billion.
“Altria fully supports this transaction, and we strongly believe that the deal is in the best interest of our shareholders,” said Marty Barrington, Altria’s Chairman, Chief Executive Officer and President. “Upon closing, Altria will continue to participate in the global brewing profit pool as a large and significant shareholder in what will be the industry’s largest company. We continue to work constructively with the parties toward closing, and we look forward to working with the AB InBev management team at the new, combined company.”
At closing, Altria expects to receive an approximately 10.5% stake in the new, combined company and approximately $2.5 billion in cash, subject to proration. In addition, the announced transaction is expected to provide Altria with two seats on the new company’s board of directors, continue the use of equity accounting for the beer asset’s contribution to Altria’s earnings, and maintain a strong asset on the balance sheet. Finally, the transaction structure provides Altria with tax efficiency.
Additional details of the transaction are attached on Exhibit A.
Altria’s Profile
Altria currently owns approximately 27% percent of SABMiller’s ordinary shares outstanding and has been a SABMiller shareholder since 2002. Altria’s wholly-owned subsidiaries include Philip Morris USA Inc., U.S. Smokeless Tobacco Company LLC, John
Middleton Co., Nu Mark LLC, Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and Philip Morris Capital Corporation.
The brand portfolios of Altria’s tobacco operating companies include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, MarkTen® and Green Smoke®. Ste. Michelle produces and markets premium wines sold under various labels, including Chateau Ste. Michelle®, Columbia Crest®, 14 Hands® and Stag’s Leap Wine Cellars™, and it imports and markets Antinori®, Champagne Nicolas Feuillatte™, Torres® and Villa Maria Estate™ products in the United States. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission. More information about Altria is available at altria.com and on the Altria Investor app.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this press release are described in Altria’s publicly filed reports, including its Annual Report on Form 10-K for the year ended December 31, 2014 and its Quarterly Report on Form 10-Q for the period ended September 30, 2015.
In addition, the factors related to AB InBev’s proposed transaction to effect a business combination with SABMiller include the following: the risk that one or more conditions to closing the proposed transaction may not be satisfied; the risk that a shareholder or regulatory approval required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; AB InBev’s inability to achieve the contemplated synergies and value creation from the proposed transaction; the fact that Altria’s election to receive transaction consideration in the form of equity is subject to proration, which may result in a reduced percentage ownership of the combined company, additional tax liabilities and/or changes in our accounting treatment of the investment; the fact that the equity securities to be received by Altria as transaction consideration will be subject to restrictions on transfer lasting five years from completion of the proposed transaction; the risk that AB InBev’s share price, which affects the value of Altria’s transaction consideration, will fluctuate based on a variety of factors which are
beyond Altria’s control; the fact that the strengthening of the U.S. dollar against the British pound would adversely affect Altria’s cash consideration as the British pound would translate into fewer U.S. dollars; the risk that the tax treatment of Altria’s transaction consideration is not guaranteed; and that the tax treatment of the dividends Altria receives from the new company may not be as favorable as dividends from SABMiller.
Source: Altria Group, Inc.
|
| | | |
Altria Client Services | | Altria Client Services | |
Investor Relations | | Media Relations | |
804-484-8222 | | 804-484-8897 | |
Exhibit A
This Exhibit A provides additional details regarding the Anheuser-Busch InBev SA/NV (AB InBev) firm offer to effect a business combination with SABMiller plc (SABMiller) and the anticipated implications for Altria Group, Inc. (Altria). The transaction is subject to certain closing conditions, including shareholder approvals of both SABMiller and AB InBev and receiving the required regulatory approvals. Dollar amounts Altria will receive are estimated at this time and are subject to change. Additional risks and uncertainties are identified under the heading “Forward-Looking and Cautionary Statements” in the press release to which this Exhibit is attached.
Financial Terms of the Offer
SABMiller shareholders will receive 44 GBP in cash for each SABMiller share, with a partial share alternative (PSA) available for approximately 41% of the SABMiller shares.
Under the terms of the PSA, SABMiller shareholders may elect to receive for each SABMiller share held (i) 0.483969 restricted shares (the Restricted Shares) in a newly formed Belgian company (NewCo) that will own the combined SABMiller-AB InBev business plus (ii) 3.7788 GBP in cash. The Restricted Shares of NewCo will be unlisted and subject to certain restrictions, including a five-year lock-up.
NewCo will acquire SABMiller and, following the closing of that acquisition, AB InBev will merge into NewCo.
Position of Support
On November 10, 2015 Altria’s Board of Directors authorized Altria to provide an irrevocable undertaking to vote in favor of the proposed transaction and to elect the PSA. Altria delivered its irrevocable undertaking on November 11, 2015.
Financial Implications
Altria expects to exchange its approximately 27% economic and voting interest in SABMiller for an interest that will be converted into Restricted Shares representing an approximately 10.5%
economic and voting interest in NewCo plus approximately $2.5 billion in cash, subject to proration.
Tax Treatment and Accounting Gain
Except for the cash consideration, Altria expects that the transaction will result in a deferral of United States corporate income tax.
Upon closing of the transaction, Altria estimates that it will record a one-time pre-tax accounting gain of approximately $12 billion, or $8 billion after-tax. This estimate is based on the AB InBev share price and GBP to USD exchange rate as of November 10, 2015, and the book value of Altria’s investment in SABMiller at September 30, 2015. The actual gain recorded at closing may vary significantly from this estimate based on changes to these factors and any proration of Restricted Shares.
Proration
The number of shares that Altria receives and its corresponding percentage ownership of NewCo at closing are subject to proration because the PSA limits the maximum number of shares that may be issued under the offer to 326 million NewCo Restricted Shares. To the extent that elections for the PSA exceed this maximum number and cannot be satisfied in full, the equity portion of all PSA elections will be adjusted downwards on a pro rata basis. It is possible that significant proration could (i) reduce Altria’s projected percentage ownership of NewCo; (ii) increase the amount of cash that Altria receives; (iii) increase the amount of the pre-tax gain recorded by Altria; (iv) impose additional tax liabilities on Altria; and (v) impact Altria’s ability to account for its investment in NewCo under the equity method of accounting.
Advisors
Credit Suisse and Perella Weinberg Partners are the financial advisors and Wachtell, Lipton, Rosen & Katz, Macfarlanes and McDermott Will & Emery are providing legal counsel to Altria for the deal.
Exhibit 99.2
EXECUTION VERSION
ALTRIA IRREVOCABLE UNDERTAKING (the Undertaking)
To: Anheuser-Busch InBev SA/NV (AB InBev)
11 November 2015
Dear Sirs,
Business Combination involving SABMiller plc (SABMiller)
We understand that AB InBev intends to effect a business combination with SABMiller by way of a three stage process involving (i) the UK Scheme; (ii) the Belgian Offer; and (iii) the Belgian Merger, further details of which are contained or referred to in paragraphs 10, 11, 12 and 14 of, and Appendix 6 to, the Press Announcement (as defined in paragraph 18) and Schedule 3 of the Co-operation Agreement. This Undertaking sets out the terms and conditions on which we will vote in favour of the UK Scheme and take certain other steps in connection with the implementation of the Transaction.
Capitalised terms not defined herein shall have the meaning given to them in the Press Announcement. References to paragraphs shall be to paragraphs in this Undertaking.
This Undertaking is entered into by us conditionally upon, and in consideration of, your releasing the Press Announcement and in consideration of your promises, representations and warranties hereunder.
Shareholdings; Representations and Warranties
| |
1. | We represent and warrant to AB InBev that: |
| |
(a) | we are a corporation that has been duly incorporated, duly organised and is validly existing under the laws of the Commonwealth of Virginia and we have full power to conduct our business as conducted at the date of this Undertaking; |
| |
(b) | we are the registered holder and beneficial owner of 430,000,000 ordinary shares of US$0.10 each in the capital of SABMiller (the SABMiller Shares) and that we hold these free of any encumbrances or third party rights of any kind whatsoever; |
| |
(c) | other than as set out in this paragraph 1 and any Altria Benefit Plan Interests (as defined in paragraph 18), we do not, and nor do our group undertakings (as defined in section 1161 of the Companies Act 2006), have any interest (as defined in the City Code) in any securities of SABMiller, AB InBev or Newco, or any rights to subscribe for, purchase or otherwise acquire any such securities, or any short positions (within the meaning set out in the City Code) in any such securities; |
| |
(d) | we have full power and authority to enter into this Undertaking and to perform the obligations under it; |
| |
(e) | the entry into and the performance by us of our obligations under this Undertaking will not result in: (i) a breach of or conflict with any provision of our constitutional documents; (ii) a material breach of, or constitute a material default under, any agreement or instrument to which we are party or by which we are bound; or (iii) a breach of any applicable law; |
| |
(f) | all consents, permissions, authorisations, approvals and agreements of third parties and all authorisations, registrations, declarations, filings with any governmental department, commission, agency or other organisation having jurisdiction over us which are necessary for us to obtain in order to enter into and perform our obligations under this Undertaking, have been unconditionally obtained, except in each case as would not materially impair our ability to perform our obligations hereunder; and |
| |
(g) | our obligations under this Undertaking constitute legal, valid and binding obligations, enforceable in the English courts and the express submission to the jurisdiction of the English courts by us in this Undertaking constitutes a valid submission on our behalf. |
2.AB InBev represents and warrants to us that it has full power and authority to enter into this Undertaking and to perform its obligations under it.
Dealings and undertakings
3.We undertake to AB InBev that before this Undertaking lapses in accordance with paragraph 29, we shall not:
| |
(a) | sell, transfer, charge, encumber, grant any option or lien over or otherwise dispose of any interest in: (i) any SABMiller Shares or any other shares in SABMiller issued or unconditionally allotted to, or otherwise acquired by, us before then (Further SABMiller Shares); or (ii) any Initial Shares, in each case other than pursuant to our election for the Partial Share Alternative or otherwise pursuant to the implementation of the Transaction in accordance with its terms, provided that, subject to paragraph 4, the foregoing shall not prohibit or restrict us from (A) mortgaging, pledging or otherwise granting a lien on any of the SABMiller Shares, Further SABMiller Shares or Initial Shares as collateral securing obligations under any bona fide current or future loan, credit facility, note, surety bond (or other arrangements to secure a stay of execution on or the satisfaction of a judgment or order), letter of credit or any similar extension of credit to us or our affiliates, or a guarantee of any of the foregoing (in each case, a Pledge, and any SABMiller Shares, Further SABMiller Shares or Initial Shares subject to a Pledge, Pledged Shares); (B) transferring all or part of our holding of Pledged Shares to, or upon the initiative of, the relevant mortgagee, pledgee or other security holder (a Pledgee), in the event that such Pledgee exercises its right to foreclose on such Pledged Shares (a Pledgee Transfer); and/or (C) selling, disposing or otherwise transferring Pledged Shares to the extent we determine in good faith that such disposal or transfer is the only commercially reasonable alternative available to us to prevent an imminent foreclosure by a Pledgee in respect of such Pledged Shares and use the proceeds of such transfer to satisfy the Pledge obligation (any such sale, disposal or transfer, a Third Party Transfer, and any person that is a purchaser or transferee of a Transfer, a Transferee); |
| |
(b) | exercise any right to convert or reclassify any SABMiller Share or Further SABMiller Share into another class or type of security interest in SABMiller or take any other step in relation to any interest in any securities in SABMiller which is inconsistent with the Proposed Structure; |
| |
(c) | accept, in respect of the SABMiller Shares, any Further SABMiller Shares or any Relevant Newco Shares, any offer or other transaction made in competition with or which would otherwise be reasonably expected to frustrate the Transaction or any part thereof; |
LON38632934 115646-0081
Page 2
| |
(d) | vote in favour of any resolution to approve any scheme of arrangement of SABMiller, or other transaction which is proposed in competition with or which might otherwise frustrate the Transaction or any part thereof; |
| |
(e) | other than with AB InBev’s prior written consent, vote in favour of or otherwise consent to any matter for the purposes of Rule 21 of the City Code; or |
| |
(f) | other than pursuant to the Transaction or as permitted by paragraph 4 enter into any agreement or arrangement, incur any obligation or give any indication of intent: |
| |
(i) | to do any of the acts referred to in paragraphs 3(a) to 3(e) (inclusive); or |
| |
(ii) | which, in relation to the SABMiller Shares, any Further SABMiller Shares or any Relevant Newco Shares, would or would reasonably be expected to: |
| |
(A) | restrict or impede us voting in favour of the UK Scheme; |
| |
(B) | restrict or impede us acting in accordance with this Undertaking, including, without limitation, paragraph 7 in the context of the Partial Share Alternative; |
| |
(C) | restrict or impede Newco approving the Capital Increase, the Belgian Merger or the Newco Resolutions; |
| |
(D) | impede any Relevant Newco Resolution (as defined in paragraph 12) which is not a Newco Resolution being adopted or rejected in a manner consistent with the implementation of the Transaction; or |
| |
(E) | otherwise frustrate the Transaction or any part thereof, |
and for the avoidance of doubt, references in this paragraph 3(f) to any agreement, arrangement, obligation or indication of intent includes any agreement, arrangement, obligation or indication of intent whether or not legally binding or subject to any condition or which is to take effect if the UK Scheme, the Belgian Merger, the Belgian Offer or the Transaction lapses or is withdrawn or if this Undertaking ceases to be binding or following any other event.
4.The creation of any Pledge shall be subject to the prior written consent of AB InBev (not to be unreasonably withheld, conditioned or delayed) and, for the avoidance of doubt, it shall not be reasonable for AB InBev to withhold its consent to any Pledge if (a):
| |
(i) | AB InBev has received written certification from one of our officers, acting in such capacity and not in his or her personal capacity, that the Pledge and the underlying arrangements which it secures are bona fide and are not being entered into in order (whether in whole or in part, but without prejudice to any Pledgee Transfer or Third Party Transfer permitted by the proviso to paragraph 3(a) of this Undertaking) to circumvent the restrictions of this Undertaking; |
| |
(ii) | AB InBev has received a legally binding and duly executed undertaking in favour of AB InBev (which does not contain this paragraph 4 or the proviso to paragraph 3(a) or any similar provision) on terms no less favourable in any material respect to AB InBev than those undertakings set out in this Undertaking, with such changes as may be reasonably required by AB InBev |
LON38632934 115646-0081
Page 3
to: (i) take account of the nature, terms and conditions of the Pledge; and (ii) result in AB InBev having in all material respects equivalent protection in relation to the undertakings set out in this Undertaking (including in the case of a Pledge Transfer and a Third Party Transfer) as it would have if the Pledge had not been entered into; and
| |
(iii) | where the Pledgee's registered address is not located in England and Wales, the Pledgee appoints an agent for service of process and any other documents in proceedings in England or any other proceedings in connection with the Transferee Undertaking; or |
| |
(b) | following a written notice from us to AB InBev requesting that AB InBev confirms it is satisfied that the provisions of paragraphs 4(a)(i) to 4(a)(iii) (inclusive) have been fulfilled, AB InBev does not respond within three Business Days to confirm whether it is so satisfied (or objects) that the provisions of paragraphs 4(a)(i) to 4(a)(iii) (inclusive) have been fulfilled. |
5.We further undertake not to, until the earlier of:
| |
(a) | this Undertaking lapsing in accordance with paragraph 29; or |
| |
(b) | the completion of the Belgian Merger, |
acquire any interests (as defined in the City Code) or otherwise deal or undertake any dealing (as defined in the City Code) in any relevant securities (as defined in the City Code) of SABMiller, Newco or AB InBev unless the Panel on Takeovers and Mergers (the Panel)) determines, and confirms to you, that, in respect of such acquisition or dealing, we are not acting in concert with you pursuant to Note 9 on the definition of “Acting in concert” set out in the City Code; provided that no undertaking is made pursuant to this paragraph 5 with respect to the activity of any Altria Benefit Plan or pursuant to paragraph 3(a) in respect of any Pledge.
Undertaking to vote in favour of the UK Scheme and the Transaction
| |
(a) | we shall either (i) exercise all voting rights attaching to the SABMiller Shares and any Further SABMiller Shares to vote in favour of all resolutions to approve or required to implement the UK Scheme, the Belgian Merger and/or the Transaction, and any related matters, proposed at any general or class meeting (General Meeting) and Court convened meeting (Court Meeting) of SABMiller to be convened and held in connection with the UK Scheme, the Belgian Merger and/or the Transaction (Relevant Resolutions), or at any adjournment of any such meeting; or (ii) if for the purposes of the vote of SABMiller Shareholders on the UK Scheme at the UK Scheme Court Meeting we do not form part of a class with the general body of SABMiller Shareholders, provide our written individual consent to the terms and implementation of the UK Scheme in relation to the SABMiller Shares and any Further SABMiller Shares; |
| |
(b) | we shall execute any forms of proxy in respect of the SABMiller Shares and any Further SABMiller Shares required by AB InBev appointing any person nominated by AB InBev to attend and vote at any General Meeting (when we are able to vote) or Court Meeting in respect of the Relevant Resolutions, and shall ensure that any such executed forms of proxy are received by SABMiller’s registrars not later than 3.00 |
LON38632934 115646-0081
Page 4
p.m. on the day falling four Business Days prior to the deadline for receipt of proxy forms set out in the formal document setting out the terms and conditions of the UK Scheme Document or the relevant notice of General Meeting or Court Meeting (or, in respect of any Further SABMiller Shares, within three days of becoming the registered holder of such shares, if later);
| |
(c) | we shall not revoke the terms of any proxy submitted in accordance with paragraph 6(b), either in writing or by attendance at any General Meeting or Court Meeting or otherwise; and |
| |
(d) | subject to the proviso in paragraph 3(a), Newco shall acquire the SABMiller Shares and any Further SABMiller Shares pursuant to the UK Scheme which provides for the transfer of such shares to Newco free of any lien, charge, option, equity or encumbrance of any nature whatsoever and together with all rights of any nature attaching to those shares including the right to all dividends declared or paid after the date of this Undertaking, other than any Permitted Dividends. |
Partial Share Alternative
7.We hereby undertake (and undertake to irrevocably and unconditionally instruct the Agent on our behalf):
| |
(a) | to elect for the Partial Share Alternative in respect of the Initial Shares received in respect of all of the SABMiller Shares and any Further SABMiller Shares and to deliver a Form of Election in respect of the Initial Shares received in respect of all of the SABMiller Shares and any Further SABMiller Shares, duly completed so as to elect for the Partial Share Alternative and receive the maximum possible number of Restricted Shares that are available in respect of the Initial Shares received in respect of all of the SABMiller Shares and any Further SABMiller Shares (as appropriate) under the Partial Share Alternative in accordance with the instructions set out in the UK Scheme Document and the Form of Election, as soon as possible and in any event within fourteen days after the posting of the UK Scheme Document (and, for the avoidance of doubt, not to elect for the Cash Consideration in respect of any of the SABMiller Shares or any Further SABMiller Shares); |
| |
(b) | not to directly or indirectly tender any of our Initial Shares into the Belgian Offer except for such number of Initial Shares as: |
| |
(i) | is required to satisfy the cash element of the Partial Share Alternative (the Cash Top-Up), (such Initial Shares, the Cash Top-Up Shares); and |
| |
(ii) | (to the extent that our election for Restricted Shares under the Partial Share Alternative cannot be satisfied in full and is scaled back) is required to satisfy the Cash Consideration payable to us (such Initial Shares, the Cash Consideration Shares); |
| |
(c) | to accept the Belgian Offer in respect of the Cash Top-Up Shares and the Cash Consideration Shares to the extent referred to in paragraph 7(b); and |
| |
(d) | not to withdraw or allow to be withdrawn the election, tender or acceptance referred to in paragraphs 7(a) to 7(c) (inclusive). |
8.We agree that (notwithstanding any terms of the UK Scheme or the Belgian Offer to the contrary) any election, save for any withdrawal following service of a Termination Notice
LON38632934 115646-0081
Page 5
in accordance with paragraph 26, withdrawal or instruction which is inconsistent with paragraph 7 shall be treated as invalid.
Voting Rights
9.From the time AB InBev releases the Press Announcement to the time this Undertaking lapses in accordance with paragraph 29:
| |
(a) | we shall exercise the voting rights attached to the SABMiller Shares and any Further SABMiller Shares on an Additional SABMiller Resolution (as defined in paragraph 10) only in a manner consistent with the implementation of the Transaction; and |
| |
(b) | for the purpose of voting on an Additional SABMiller Resolution, we shall execute any form of proxy required by AB InBev appointing any person nominated by AB InBev to attend and vote at the relevant General Meeting of SABMiller (and shall not revoke the terms of any such proxy whether in writing, by attendance or otherwise). |
10.An Additional SABMiller Resolution means:
| |
(a) | other than a Relevant Resolution, any resolution (whether or not amended) proposed at a General Meeting of SABMiller, or at an adjourned meeting, which, if passed, would reasonably be expected to result in any Condition not being fulfilled or the Transaction not being implemented in accordance with the terms set out in the Press Announcement or which would reasonably be expected to impede or frustrate the Transaction (or any part thereof) in any way (including, for the avoidance of doubt, any resolution to approve any scheme of arrangement or other transaction in relation to SABMiller which is proposed in competition with or would reasonably be expected to frustrate the Transaction) or which is to approve a matter for the purposes of Rule 21 of the City Code; |
| |
(b) | a resolution to adjourn a General Meeting of SABMiller whose business includes the consideration of a resolution falling within paragraph 10(a); or |
| |
(c) | a resolution to amend a resolution falling within paragraph 10(a) or paragraph 10(b). |
11.From the time AB InBev releases the Press Announcement to the time immediately following the completion of the Belgian Merger we shall exercise the voting rights attached to the Relevant Newco Shares issued to us on a Relevant Newco Resolution only in a manner consistent with the implementation of the Transaction.
12.A Relevant Newco Resolution means:
| |
(a) | if applicable, a Newco Resolution; |
| |
(b) | a resolution (whether or not amended) proposed at a General Meeting of Newco, or at an adjourned meeting: |
| |
(i) | the passing of which is required to implement the Transaction, including but not limited to the implementation of any Remedies (as defined in paragraph 18), any vote on the Capital Increase or the Belgian Merger, any amendment to the bylaws of Newco, any decision regarding the composition of Newco’s board of directors; or |
LON38632934 115646-0081
Page 6
| |
(ii) | which, if passed, would reasonably be expected to result in any Condition not being fulfilled or the Transaction not being implemented in accordance with the terms set out in the Press Announcement or which would reasonably be expected to impede or frustrate the Transaction in any way (including, for the avoidance of doubt, any resolution to approve any scheme of arrangement or other transaction in relation to Newco which is proposed in competition with or which would reasonably be expected to frustrate the Transaction); or |
| |
(iii) | which is to approve a matter for the purposes of Rule 21 of the City Code; |
| |
(c) | a resolution to adjourn a General Meeting of Newco whose business includes the consideration of a resolution falling within paragraph 12(a) or paragraph 12(b); or |
| |
(d) | a resolution to amend a resolution falling within paragraph 12(a), paragraph 12(b) or paragraph 12(c). |
Documentation
| |
(a) | this Undertaking being disclosed to the Panel and the BFSMA; |
| |
(b) | the inclusion of references to us and particulars of this Undertaking and our holdings of, interests in, rights to subscribe for and short positions in relevant securities of SABMiller or Newco (Altria References) being included in the Press Announcement and any scheme document or offer document published in connection with the Transaction, and any other announcement made, or document issued, by or on behalf of AB InBev or Newco in connection with the Transaction (any such document including Altria References, a Altria Reference Document), provided that (to the extent permitted by relevant law and regulation (including the City Code)) we have been afforded a reasonable opportunity to review and comment on the Altria References in any such Altria Reference Document prior to it being issued, published or delivered, as the case may be; and |
| |
(c) | this Undertaking being available for inspection as required by Rule 26.1 of the City Code or the Listing Rules of the Financial Conduct Authority including, without limitation, being made publicly available on AB InBev’s and SABMiller’s websites. |
14.We shall promptly give you all information and any assistance as you may reasonably require in relation to:
| |
(a) | the preparation of any material announcement to be made, or material document to be issued, by or on behalf of AB InBev or Newco in connection with: |
| |
(i) | the UK Scheme, the Belgian Offer or the Belgian Merger; or |
| |
(ii) | the Transaction in order to comply with the requirements of the City Code, the Panel, the High Court of England & Wales, the Companies Act 2006, the Financial Services Authority, the London Stock Exchange, the Belgian Companies Code, the Belgian Law of 1 April 2007 on takeover bids, the Belgian Royal Decree of 27 April 2007 on takeover bids, the Belgian Law of 16 June 2006 relating to the public offer of investment instruments and the admission to trading of investment instruments on a regulated market, the |
LON38632934 115646-0081
Page 7
BFSMA, the JSE Limited or any other legal or regulatory requirement or body,
provided, in each case, that (to the extent permitted by relevant law and regulation (including the City Code)) we have been afforded a reasonable opportunity to review and comment on the same prior to it being issued, published or delivered, as the case may be;
| |
(b) | from the time AB InBev releases the Press Announcement to the time immediately following the completion of the Belgian Merger, promptly answering any request or question from the Panel or BFSMA; and |
| |
(c) | the implementation of the Transaction (including steps required in relation to the obtaining of any regulatory clearances), |
and, in each case, we shall immediately notify you in writing of any change in the accuracy or impact of any information previously given to you.
| |
15. | AB InBev agrees to provide us with an advanced draft of: |
| |
(a) | relevant extracts of each document referred to in paragraph 13 above; |
| |
(b) | relevant extracts of the UK Scheme Document and the AB InBev Transaction Documents; and |
| |
(c) | relevant extracts of any other document referred to in paragraph 14 above to be published or announced which contains details of any proposed change in the Structure of the Transaction (as defined in paragraph 23), |
and AB InBev will use all reasonable endeavours to ensure (subject to any legal or regulatory requirement which affects the timing of publication or announcement) that we have been afforded a reasonable opportunity to review and comment on the same and to discuss such documents with AB InBev and its advisors before they are published or announced.
Secrecy
16.We shall keep secret the terms and conditions of the Transaction and the existence and terms of this Undertaking until the Press Announcement is released (to the extent that such terms and conditions have not already been publicly announced by SABMiller and/or AB InBev), provided that we may disclose the same to SABMiller and its advisers in which case we shall procure that they observe secrecy in the same terms. The obligations in this paragraph shall survive termination of this Undertaking.
17.We understand that the information you have given to us in relation to the Transaction must be kept confidential until the Press Announcement is released or the information has otherwise become generally available. To the extent any of the information is inside information for the purposes of the Criminal Justice Act 1993 or the Financial Services and Markets Act 2000 or the Belgian law of 2 August 2002 on the supervision of the financial sector and on financial services, we will comply with the applicable restrictions in those enactments on dealing in securities and disclosing inside information.
Interpretation
LON38632934 115646-0081
Page 8
| |
(a) | references to Altria Benefit Plan Interests means interests (as defined in the City Code) in any securities of SABMiller or AB InBev held by or in any pension, retirement, profit-sharing, deferred compensation or other employee benefit plan of Altria or its group undertakings. The Altria Benefit Plan Interests shall not include any SABMiller Shares; |
| |
(b) | references to the Press Announcement are to the press announcement announcing the Transaction in the form attached to this Undertaking; |
| |
(c) | references to Relevant Newco Shares means the Initial Shares, the Restricted Shares and the New Ordinary Shares; and |
| |
(d) | references to Remedies means any conditions, measures, commitments, undertakings or remedies (including, but not limited to, disposals and any pre-divesture reorganisations by either party) offered or required in connection with the obtaining of any Clearances (as defined in the Co-operation Agreement) and Remedy shall be construed accordingly. |
Time of the Essence
19.Any time, date or period mentioned in this Undertaking may be extended by mutual agreement but as regards any time, date or period originally fixed or as extended, time shall be of the essence.
The Transaction
20.Newco shall not be obliged to proceed with the UK Scheme, nor shall AB InBev be obliged to make or proceed with the Transaction.
21.We acknowledge and agree that in accordance with the terms of the Co-operation Agreement (as defined in the Press Announcement) in the event that a Break Payment (as defined in the Co-operation Agreement) has been paid pursuant to Clause 9 of the Co-operation Agreement, except with respect to (i) any amounts in respect of which AB InBev is required to indemnify SABMiller pursuant to Clause 9 of the Co-operation Agreement and (ii) fraud, SABMiller’s receipt of the Break Payment (plus any additional amounts in respect of VAT under Clause 9 of the Co-operation Agreement) shall be the sole and exclusive remedy of the SABMiller Group and/or its shareholders (including for the avoidance of doubt, us) in respect of any and all losses and damages suffered in connection with the Co-operation Agreement and the transactions contemplated by it. Accordingly, in the event that a Break Payment has been paid, save in the case of (i) or (ii) above, we hereby irrevocably (a) waive all rights, claims or actions that we may have against any member of the AB InBev Group or its shareholders or directors arising out of or in connection with the Co-operation Agreement and the transactions contemplated by it, and (b) undertake not to bring any such claims or actions in respect thereof in any court in any jurisdiction.
22.Notwithstanding paragraphs 27 and 29 below, if this Undertaking lapses, paragraph 21 shall continue in full force and effect.
Structure
23.The Transaction shall be implemented as described in paragraphs 10, 11, 12 and 14 of, and Appendix 6 to, the Press Announcement and Schedule 3 of the Co-operation Agreement (the Structure of the Transaction).
LON38632934 115646-0081
Page 9
24.Prior to publication of the UK Scheme Document and the Belgian Merger Documents, AB InBev shall be entitled to vary the Structure of the Transaction or agree to, permit or in any way facilitate any action by SABMiller that would constitute “frustrating action” under Rule 21.1 of the City Code with respect to the Transaction (a Waiver), only with our prior written consent, not to be unreasonably withheld, conditioned or delayed.
For the purposes of paragraph 24, it shall be:
(a) deemed reasonable for us to withhold our consent to:
| |
(i) | any proposed variance of the Structure of the Transaction that would, or would reasonably be expected to, constitute or result in the breach of or make untrue any of the representations or covenants in the Tax Matters Agreement, entered into on or around the date of this Undertaking, between us and AB InBev (the Tax Matters Agreement), (a TMA Breach); and/or |
if such TMA Breach and/or Waiver would cause us to be unable to obtain the respective opinions of Wachtell, Lipton, Rosen & Katz and McDermott Will & Emery that each of the exchange of SABMiller Shares for Initial Shares and the exchange of Initial Shares for Restricted Shares will qualify as tax-free reorganizations for U.S. federal income tax purposes (an Opinion Failure, and any such variance or Waiver that would cause an Opinion Failure, a Relevant Variance); and
| |
(b) | deemed unreasonable for us to withhold our consent to any proposed variance of the Structure of the Transaction or Waiver that would not constitute a Relevant Variance. |
25.AB InBev shall provide us with copies of relevant extracts of the final and all intervening significant drafts of the UK Scheme Document, the Belgian Offer Prospectus and the Belgian Merger Documents and any other ancillary documents relating thereto as we may reasonably require and shall ensure we have a reasonable opportunity to review these with our advisers and to provide comments to and discuss the same with AB InBev and its advisers (it being acknowledged that it will be reasonable for us to require extracts of such aforementioned documents to the extent they relate to the Structure of the Transaction and the Partial Share Alternative). We and AB InBev shall co-operate and discuss in good faith the terms of such documents (so far as the Structure of the Transaction is concerned) and shall use reasonable endeavours to agree upon the terms of all such documentation (so far as the Structure of the Transaction is concerned) as soon as possible and in accordance with the timetable for the Transaction. Prior to publication of the Scheme Document and the Belgian Merger Documents we and AB InBev shall each confirm in writing to each other whether we are satisfied with them and the form of the Belgian Offer Prospectus (so far as the Structure of the Transaction is concerned).
26.If the Scheme Document and the Belgian Merger Documents are published without our having given the confirmation that we are so satisfied as referred to in paragraph 25, and we have received written confirmation from Wachtell, Lipton, Rosen & Katz and McDermott Will & Emery that there has been a Relevant Variance and we have not granted our written consent to such Relevant Variance, we shall be entitled to give written notice to AB InBev as soon as reasonably possible (but in any event within 10 days of the publication of the latest to be published of the UK Scheme Document and the Belgian Merger Documents) specifying the nature of the Relevant Variance and the concerns we have associated with it and requiring AB InBev to remedy such Relevant Variance. If (a) such Relevant Variance is not remedied,
LON38632934 115646-0081
Page 10
or AB InBev does not undertake to remedy such Relevant Variance, in each case to our reasonable satisfaction, within the sooner of (i) 10 days of such notice or (ii) six Business Days prior to the UK Scheme Court Meeting and the SABMiller General Meeting (the Remedy Period); or (b) AB InBev fails to deliver the certification required to be delivered six Business Days prior to the UK Scheme Court Meeting and the SABMiller General Meeting pursuant to Clause 2.1.31 of the Tax Matters Agreement by such date then (subject to paragraph 27) we shall be entitled to terminate this Undertaking by written notice (a Termination Notice) to be received by AB InBev within 3 days following the expiry of the Remedy Period and (for the avoidance of doubt) prior to the date of the UK Scheme Court Meeting and the SABMiller General Meeting. During the Remedy Period we and AB InBev shall use all reasonable endeavours to co-operate, and shall procure that our advisors co-operate, to agree the steps to remedy the Relevant Variance.
27.Save for this paragraph 27, paragraph 21, paragraph 3(a), paragraph 4, paragraph 22 and paragraphs 33 to 47 (which shall remain in full force and effect), on receipt of a Termination Notice, the obligations set out in this Undertaking shall terminate (without prejudice to any antecedent breach). If we terminate this Undertaking in accordance with paragraph 26, we irrevocably undertake to you that we will either: (a) attend the UK Scheme Court Meeting and the SABMiller General Meeting in person or by proxy and will vote all of our SABMiller Shares and Further SABMiller Shares against all of the resolutions proposed thereat; or (b) if for the purposes of the vote of SABMiller Shareholders on the UK Scheme at the UK Scheme Court Meeting we do not form part of a class with the general body of SABMiller Shareholders, object to the terms and implementation of the UK Scheme in relation to the SABMiller Shares and any Further SABMiller Shares.
28.Following publication of the UK Scheme Document and the Belgian Merger Documents, AB InBev shall be entitled to vary the Structure of the Transaction or agree to or permit a Waiver only with our prior written agreement (such agreement not to be unreasonably withheld, conditioned or delayed, provided that it shall be deemed (a) reasonable for us to withhold our consent to any Relevant Variance and (b) unreasonable for us to withhold our consent to any proposed variance of the Structure of the Transaction or Waiver that would not constitute a Relevant Variance).
Lapse of Undertaking
29.Subject to paragraph 21, this Undertaking shall lapse and cease to have effect to the extent not already undertaken and without prejudice to any liability for antecedent breach:
| |
(a) | if the Press Announcement is not released by 5:00 p.m. 11 November 2015 or such later date as we may agree in writing; |
| |
(b) | if AB InBev announces, with the consent of the Panel, that it does not intend to make or proceed with the Transaction and no new, revised or replacement UK Scheme (to which this Undertaking applies) is announced in accordance with Rule 2.7 of the City Code at the same time; |
| |
(c) | if the UK Scheme lapses or is withdrawn and no new, revised or replacement UK Scheme (to which this Undertaking applies) has been announced, in accordance with Rule 2.7 of the City Code, in its place or is announced, in accordance with Rule 2.7 of the City Code, at the same time; |
| |
(d) | fourteen (14) days following the date of the successful implementation of the Transaction in accordance with its terms; |
LON38632934 115646-0081
Page 11
| |
(e) | on the date falling eighteen (18) months after the date of the Press Announcement (or such later date as we may agree in writing); |
| |
(f) | if the Newco resolution to adopt the new articles of association (with the key terms described in Appendix 6 of the Press Announcement) is not passed at the Newco General Meeting; |
| |
(g) | if there is an increase in the Cash Consideration and we have not given our written consent to such increase (other than in circumstances where there is an increase in the Cash Top-Up of an equal or greater amount to the increase in the Cash Consideration, which shall not require our consent); |
| |
(h) | the Newco Resolution referred to in paragraph (f) above is revoked or amended prior to the UK Scheme becoming effective; or |
| |
(i) | other than in respect of those paragraphs which remain in full force and effect pursuant to paragraph 27, if the Undertaking is terminated pursuant to a Termination Notice served in accordance with paragraph 26. |
30.In the event that AB InBev elects to implement the Transaction by way of, among other steps, an offer to be made by Newco to acquire the ordinary share capital of SABMiller (rather than the UK Scheme) and we have consented to such election, the parties agree that all provisions of this Undertaking shall apply to such offer or its implementation mutatis mutandis.
31.[Reserved].
Confirmation
32.We confirm that in signing this Undertaking we are not a client or customer of Lazard for the purposes of the Conduct of Business Sourcebook of the Financial Conduct Authority and that Lazard is acting for AB InBev in connection with the Transaction and no‑one else and is not responsible to anyone other than AB InBev for providing the protections afforded to customers of Lazard nor for providing advice in relation to the Transaction. We confirm that we have been given an adequate opportunity to consider whether or not to execute this Undertaking and to obtain independent advice.
Power of Attorney
33.In order to secure the performance of our obligations under this Undertaking, we appoint the directors of AB InBev (as they hold office from time to time) jointly and severally as our attorneys (each an Attorney and, together, the Attorneys) if AB InBev, acting reasonably and in good faith (having taken advice of outside legal counsel) determines that we have failed to comply with any of our obligations and undertakings in paragraphs 6, 7 or 27 (a POA Determination), in our name and on our behalf to: (a) take any steps and do any and all things; and (without prejudice to the generality of the foregoing) (b) consider, amend, settle, approve, sign, execute, deliver and/or issue all documents, forms of proxy, certificates and instruments (all whether as a deed or not); and (c) remedy any purported failure with respect to which a POA Determination remains in effect following the POA Remedy Period, in each case as any Attorney acting reasonably and having taken the advice of outside counsel determines necessary to ensure compliance with such obligations and undertakings in respect of the SABMiller Shares, any Further SABMiller Shares and any Initial Shares (as appropriate); provided that prior to utilizing this power of attorney (to the extent reasonably practicable taking into account the time periods within which the performance of the relevant
LON38632934 115646-0081
Page 12
obligations is reasonably required to be exercised (including for the purposes of the steps required to implement the Transaction)), AB InBev has used its reasonable efforts to provide us with reasonable advance notice (a POA Notice) that it is considering making a POA Determination and allowed us two calendar days, or such longer period of time as AB InBev (acting reasonably) may at its discretion consider is reasonable, to remedy any purported failure by us to comply with paragraphs 6, 7 or 27 hereof (the POA Remedy Period). The POA Remedy Period shall be set out in the POA Notice.
34.All actions authorised by this power of attorney may be taken by any of the Attorneys. Any and all acts done, decisions made and instruments or other documents executed pursuant to this power of attorney by one of the Attorneys shall therefore be as valid and effectual as though done by all of the Attorneys.
35.We agree that this power of attorney is given by way of security to secure the performance of our obligations in paragraphs 6, 7 and 27 and is irrevocable in accordance with section 4 Powers of Attorney Act 1971 unless and until, in respect of our obligations pursuant to paragraphs 6 and 7, this Undertaking lapses in accordance with paragraph 29.
Variation
36.No variation of this Undertaking shall be effective unless agreed between each of the parties hereto.
Specific Performance
37.Each party (the Claimant) agrees that, if the other party (the Defendant) fails to comply with any of its undertakings or obligations under this Undertaking (a Breach), the Claimant commences any proceedings in respect of such Breach, and such Breach can be fully remedied by one or more equitable remedies (whether by specific performance and/or an injunction and/or any other appropriate equitable remedy/remedies), the Claimant will seek such equitable remedy/remedies as its primary pleaded relief in such proceedings. For these purposes: (a) the parties acknowledge that damages are not an adequate remedy for a Breach; and (b) the parties agree not to argue against the granting of such equitable remedy/remedies. For the avoidance of doubt, nothing in this paragraph shall affect the parties’ rights to seek damages in the alternative in the event that the court does not grant the equitable remedy/remedies sought and/or in the event that a Breach cannot be fully remedied by one or more equitable remedies.
Third party rights
38.Newco shall have the right under the Contracts (Rights of Third Parties) Act 1999 to enforce the terms of paragraph 33 of this Undertaking (as amended from time to time), with effect from the date of its incorporation, against us only, subject to and in accordance with:
| |
(a) | the terms of paragraph 47 (Governing Law); and |
| |
(b) | the term that the parties to this Undertaking may by agreement terminate or rescind or vary it in any way without the consent of Newco. |
39.SABMiller shall have the right under the Contracts (Rights of Third Parties) Act 1999 to enforce the terms of paragraph 33 of this Undertaking (as amended from time to time), against us only, subject to and in accordance with the terms of paragraph 47 (Governing Law).
LON38632934 115646-0081
Page 13
40.Save as provided in paragraphs 38 and 39, a person who is not a party to this Undertaking shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.
Notice
41.A Termination Notice under paragraph 26 of this Undertaking shall only be effective if it is in writing.
42.Notices under this Undertaking shall be sent to AB InBev by hand delivery or by email at its physical address or email address respectively, and shall be marked for the attention of the individual set out below:
|
| |
Attention: | Chief Legal Officer & Corporate Secretary |
Physical address: | c/o Anheuser-Busch InBev |
| Brouwerijplein 1 |
| Leuven 3000 |
| Belgium |
Email address: | sabine.chalmers@ab-inbev.com |
with a copy to (but such copy shall not constitute notice): |
Attention: | Mark Rawlinson and Alison Smith |
Physical address: | Freshfields Bruckhaus Deringer LLP |
| 65 Fleet Street |
| London EC4Y 1HS |
| United Kingdom |
Email address: | mark.rawlinson@freshfields.com, alison.smith@freshfields.com |
| |
and if to us, by hand delivery or by email at our physical address or email address respectively, and shall be marked for the attention of the individual set out below: |
Attention: | General Counsel |
Physical address: | c/o Altria Group, Inc. |
| 6601 West Broad Street |
| Richmond, Virginia 23230 |
| USA |
Email address: | Denise.Keane@altria.com |
with a copy to (but such copy shall not constitute notice): |
Attention: | Andrew J. Nussbaum |
Physical address: | Wachtell, Lipton, Rosen & Katz |
LON38632934 115646-0081
Page 14
|
| |
| 51 West 52nd Street |
| New York, New York 10019 |
| USA |
Email address: AJNussbaum@wlrk.com |
43.Any notice given under this Undertaking shall, in the absence of earlier receipt, be deemed to have been duly given:
| |
(a) | if delivered by hand, on delivery; or |
| |
(b) | if sent by email, when sent. |
44.As nearly as possible at the same time as any notice under this Undertaking is given, each of the persons referred to in paragraph 42 above shall be informed by telephone and text on the numbers given to us in writing by the applicable party for such purpose with reference to this paragraph.
45.Any notice given under this Undertaking outside the period between 9:00 a.m. and 5:00 p.m. (Working Hours) shall be deemed not to have been given until the start of the next period of Working Hours.
46.Each party shall, where such party sends a notice by facsimile or email to the other party, within two Business Days send a hard copy of the relevant notice via hand delivery or reputable international courier to the physical address of the other party.
Governing Law
47.This Undertaking and any non-contractual obligations arising under it shall be governed by English law. The English courts shall have exclusive jurisdiction in relation to all disputes (including claims for set-off and counterclaims) arising out of or in connection with this Undertaking including, without limitation, disputes arising out of or in connection with: (i) the creation, validity, effect, interpretation, performance or non-performance of, or the legal relationships established by, this Undertaking; and (ii) any non-contractual obligations arising out of or in connection with this Undertaking. For such purposes each party irrevocably submits to the jurisdiction of the English courts and waives any objection to the exercise of such jurisdiction. Each party shall at all times maintain an agent for service of process and any other documents in proceedings in England or any other proceedings in connection with this Undertaking. Such agent (i) for us shall be Macfarlanes LLP (for the attention of Graham Gibb) currently of 20 Cursitor Street, London EC4A 1LT and (ii) for AB InBev shall be AB InBev UK Limited (for the attention of UK & Ireland Legal Director) currently of Porter Tun House, 500 Capability Green, Luton, LU1 3LS and any writ, judgement or other notice of legal process shall be sufficiently served on us or AB InBev, as the case may be, if delivered to such party’s agent at its address, for the time being. Each party irrevocably undertakes not to revoke the authority of its above agent and, if for any reason, the other party requests, the applicable party shall promptly appoint another such agent with an address in England and advise the requesting party. If following such a request a party fails to appoint another agent, the requesting party shall be entitled to appoint one on behalf of such party.
LON38632934 115646-0081
Page 15
Counterparts
48.This Undertaking may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart. Each counterpart shall constitute an original of this Undertaking, but all the counterparts shall together constitute but one and the same instrument.
LON38632934 115646-0081
Page 16
|
| | | |
EXECUTED as a DEED and | ) | SIGNATURE: | /s/ William F. Gifford Jr. |
DELIVERED on behalf of Altria | ) | | |
Group, Inc., a Virginia corporation, | ) | NAME: | William F. Gifford Jr. |
by William F. Gifford Jr. and | ) | | |
Denise F. Keane , being | ) | | |
persons who, in accordance with the | ) | SIGNATURE: | /s/ Denise F. Keane |
laws of Virginia, are acting under the | ) | | |
authority of the corporation | ) | NAME: | Denise F. Keane |
[Signature Page to Irrevocable Undertaking - Altria]
Acknowledged and agreed by Anheuser-Busch InBev SA/NV
|
| | | |
EXECUTED as a DEED and | ) | SIGNATURE: | /s/ MARIA FERNANDA ROCHA BARROS |
DELIVERED on behalf of | ) | | |
ANHEUSER-BUSCH INBEV SA/NV, | ) | NAME: | MARIA FERNANDA ROCHA BARROS |
a company incorporated in Belgium | ) | | |
by MARIA FERNANDA ROCHA BARROS | ) | | |
and JAN VANDERMEERSCH, | ) | SIGNATURE: | /s/ JAN VANDERMEERSCH |
being persons who, in accordance with the | ) | | |
laws of that territory, are acting under the | ) | NAME: | JAN VANDERMEERSCH |
authority of the company | ) | | |
[Signature Page to Irrevocable Undertaking - AB InBev]
LON38632934 115646-0081
Exhibit 99.3
EXECUTION VERSION
TAX MATTERS AGREEMENT
THIS TAX MATTERS AGREEMENT (this “Agreement”) dated November 11, 2015 between Altria Group, Inc., a Virginia corporation (“Altria”), and Anheuser-Busch InBev SA/NV, a public company organized under the laws of Belgium (“ABI”), recites and provides:
WHEREAS, on the date hereof, ABI and SABMiller announced the proposed business combination of SABMiller and ABI pursuant to a transaction governed by the United Kingdom City Code on Takeovers and Mergers;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for the mutual benefits to be derived from this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
| |
1. | DEFINITIONS AND INTERPRETATION |
“2.7 Announcement” means the announcement issued by ABI and SABMiller on the date hereof under Rule 2.7 of the United Kingdom City Code on Takeovers and Mergers;
“ABI Affiliate” means a person that is, at any time, a direct or indirect Affiliate of ABI;
“ABI Group” means ABI and all the ABI Affiliates;
“Actual Knowledge” means actual knowledge of the officers and directors of the relevant party, including but not limited to the chief financial officer, vice president of tax, and the chief legal officer, after due inquiry with (i) direct reports and other relevant employees who may be reasonably expected to have knowledge of Relevant Information and (ii) professional advisers of the relevant party;
“Affiliate” means, with respect to any person, each other person in which such person both (i) directly or indirectly owns any stock, share, membership interest, participation right or other ownership interest and (ii) has Control;
“Altria Affiliate” means a person that is, at any time, a direct or indirect Affiliate of Altria;
“Altria Irrevocable Undertaking” means the irrevocable undertaking received by ABI from Altria to vote in favor of the SABMiller Resolutions at the UK Scheme Court Meeting and the SABMiller General Meeting;
“Belgian Offer” has the meaning given in the 2.7 Announcement;
“Belgian Merger” has the meaning given in the 2.7 Announcement;
“Business Day” means a day other than a Saturday or Sunday or public holiday in Belgium or the United States of America;
“Change in Law” means a change in any United States Federal income Tax law or any foreign Tax law, including without limitation statutes, the Code, Treasury Regulations, case law or administrative pronouncements on which taxpayers are entitled to rely;
“Code” means the United States Internal Revenue Code of 1986, as amended;
“Completion” has the meaning given in the 2.7 Announcement;
“Completion Date” means the date on which Completion occurs;
“Conditions” has the meaning given in the 2.7 Announcement;
“Control” (including the correlative term “Controlled”) means, with respect to any person, (a) the direct or indirect ownership of 50 percent or more of the total vote or value of the stock, shares, membership interests or other ownership interests of such person or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided that, solely for purposes of clause 5 of this Agreement, a person shall not be treated as having Control of a corporation or other organization in which shares consisting of at least 15% of the total share capital are listed and actively traded on a major international stock exchange (including, for the avoidance of doubt, the Brazilian Stock Exchange);
“Conversion” means the conversion of SABMiller under the laws of England and Wales from a public limited company into a private limited company;
“Co-operation Agreement” has the meaning given in the 2.7 Announcement.
“CTB Election” means the entity classification election filed by SABMiller to be disregarded as an entity separate from NewCo for U.S. Federal income Tax purposes under Section 7701 of the Code and Treasury Regulation Sections 301.7701-1 through 301.7701-3;
“Current Information” means all information that relates to the Transaction and the intentions of ABI with regard to the Transaction, but, for the avoidance of doubt, excludes (i) information provided by SABMiller, to the extent related solely to SABMiller and to which ABI has no Actual Knowledge, (ii) any forward-looking financial projections, (iii) any information that relates to the treatment of SABMiller equity instruments (other than SABMiller Shares) under and pursuant to the Transaction and of which ABI has no Actual Knowledge and
(iv) any information as to which Altria has Actual Knowledge of the underlying facts;
“Current Information Statement” means the statement provided by ABI to Altria no later than one Business Day after the date of this Agreement containing any Current Information that is not included in the 2.7 Announcement;
“Day” means a calendar day in London;
“Gain Recognition Agreement” means a gain recognition agreement entered into by Altria pursuant to Treasury Regulation Section 1.367(a)-8;
“Initial Share Issuance” means the transfer of SABMiller Shares to NewCo and the issuance of the Initial Shares to former SABMiller Shareholders as part of the UK Scheme;
“Initial Shares” has the meaning given in the 2.7 Announcement;
“IRS” means the United States Internal Revenue Service;
“NewCo” means NewCo, a Belgian limited liability company;
“Offer Agent” means the agent appointed to respond to the Belgian Offer on behalf of SABMiller Shareholders;
“Recapitalization” means the reclassification of the Initial Shares into the Restricted Shares (other than the Initial Shares held by ABI);
“Relevant Agreements and Arrangements” means any agreements or arrangements in place between ABI and any third party that relate to the Transaction, other than (i) the 2.7 Announcement and (ii) any arrangements or agreements (a) referred to in the 2.7 Announcement (including the Co-operation Agreement), (b) to which Altria is a party, (c) between ABI and its advisors that relate to the provision of advice to ABI, (d) with respect to disposals that are both made in order to satisfy any of the Conditions and do not occur during the period beginning when the court sanctions the UK Scheme and ending at the beginning of the day after the Conversion or (e) that have been disclosed in writing to Altria;
“Relevant Information” means all information that both (i) relates to the Transaction and the intentions of ABI with regard to the Transaction and (ii) ABI believes in good faith and consistent with advice of ABI’s nationally recognized U.S. Tax counsel, is not clearly irrelevant to Altria’s ability to obtain the Tax Opinions (defined below), but, for the avoidance of doubt, excludes (w) information that relates solely to SABMiller and to which ABI has no Actual Knowledge, (x) any forward-looking financial projections, (y) any information that relates to the treatment of SABMiller equity instruments (other than SABMiller Shares) under and pursuant to the Transaction and of which ABI has
no Actual Knowledge and (z) any information as to which Altria has Actual Knowledge of the underlying facts;
“Reorganization” means (i) the Initial Share Issuance, (ii) the registration of former SABMiller Shareholders as NewCo shareholders in the share register of NewCo, (iii) the Conversion, and (iv) the CTB Election;
“Reorganization Failure Event” means an event that would result in Altria being unable to obtain the Tax Opinions as a result of a Change in Law or an action taken by SABMiller;
“Restricted Shares” has the meaning given in the 2.7 Announcement;
“SABMiller” means SABMiller plc, a public limited company registered in the United Kingdom;
“SABMiller Affiliate” means a person that is, at any time, a direct or indirect Affiliate of SABMiller;
“SABMiller Resolutions” has the meaning given in the 2.7 Announcement;
“SABMiller Shareholders” has the meaning given in the 2.7 Announcement;
“SABMiller Shares” has the meaning given in the 2.7 Announcement;
“SABMiller TMA” means the Tax Matters Agreement, dated May 30, 2002, between Philip Morris Companies Inc., a Virginia corporation, and South African Breweries PLC, a company incorporated in England and Wales, as amended pursuant to the Amendment and Clarification of Tax Matters Agreement, dated April 23, 2008;
“Section 351 Opinions” means the respective opinions of Wachtell, Lipton, Rosen & Katz and McDermott Will & Emery LLP that the Initial Share Issuance, without the CTB Election and together with the Belgian Merger, will qualify for non-recognition of gain and loss for U.S. Federal income Tax purposes under Section 351 of the Code and the exchange of Initial Shares for Restricted Shares will qualify as a tax-free reorganization for U.S. Federal income Tax purposes;
“Stamp Duty” means the UK stamp duty payable by NewCo in order to secure registration of the transfer of SABMiller Shares pursuant to the UK Scheme and the South African transfer Tax payable on the transfer of SABMiller Shares pursuant to the UK Scheme;
“Stamp Duty Funds” means the funds borrowed by NewCo in an amount up to the Stamp Duty;
“Tax” and “Taxation” means all national, Federal, state, county, local, foreign or other taxes (including without limitation, income (net or gross), corporation, gross
receipts, capital gain, surtax or add-on, windfall profits, severance, property (real or personal), asset, capital, capital stock, intangible, production, sales, use, license, import, excise, franchise, employment, withholding, stamp, transfer, payroll, wage, railroad, occupation, goods and services, ad valorem, value-added or minimum, estimated or any other tax), duty, fee or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed or required to be withheld by any Tax Authority;
“Tax Authority” means a governmental authority (foreign or domestic) or any subdivision, agency, commission or authority thereof having jurisdiction over the assessment, determination, collection or imposition of any Tax;
“Tax Determination” means a “determination” defined in Section 1313(a)(l) of the Code and shall also include any settlement agreement entered into with the IRS;
“Tax Opinions” means the respective opinions of Wachtell, Lipton, Rosen & Katz and McDermott Will & Emery LLP that each of the exchange of SABMiller Shares for Initial Shares and the exchange of Initial Shares for Restricted Shares will qualify as tax-free reorganizations for U.S. Federal income Tax purposes;
“Tax Return” means any return, report, declaration, estimate, form, or similar statement required to be filed with respect to any Tax (including any attached schedules), including without limitation, any information return, claim for refund, amended return or declaration or estimated Tax;
“Transaction” has the meaning given in the 2.7 Announcement;
“Treasury Regulations” means the United States Treasury Regulations promulgated under the Code and references to a “Treasury Regulation Section” are to a section of the Treasury Regulations;
“UK Scheme” has the meaning given in the 2.7 Announcement;
“UK Scheme Document” has the meaning given in the 2.7 Announcement; and
“UK Scheme Record Time” means the time after the court sanctions the UK Scheme but before the UK Scheme is effective, as will be more particularly defined in the UK Scheme Document.
| |
1.2 | Any capitalized term not otherwise defined in this Agreement shall have the meaning ascribed to it in the 2.7 Announcement. |
| |
1.3 | In this Agreement, a reference to: |
| |
1.3.1 | a “person” includes a reference to: |
| |
(a) | any individual, firm, company, corporation or other body corporate, government, state or agency of a state or any joint venture, association or partnership, works council or employee representative body (whether or not having separate legal personality); and |
| |
(b) | that person’s legal personal representatives, successors and permitted assigns; |
| |
1.3.2 | a “party” includes a reference to that party’s successors and permitted assigns; |
| |
1.3.3 | a clause, unless the context otherwise requires, is a reference to a clause of this Agreement; |
| |
1.3.4 | “interest” includes, unless otherwise provided, a reference to original issue discount; and |
| |
1.3.5 | “dollars” or “$” is to the lawful currency of the United States of America. |
| |
1.4 | In this Agreement, the mention of anything after the words “include”, “includes” or “including” does not limit what else might be included. |
| |
1.5 | For purposes of this Agreement, a party shall not undertake any action indirectly or acting in concert with any other party that it could not undertake directly pursuant to the terms of this Agreement. |
| |
1.6 | For purposes of interpreting this Agreement, actions and transactions will be treated in accordance with their substance, applying United States Federal income Tax principles. |
| |
1.7 | The headings in this Agreement are for convenience only and shall not affect the interpretation of this Agreement. |
2.REPRESENTATIONS AND COVENANTS
| |
2.1 | Subject to clause 2.2, ABI represents and warrants to Altria at the date of this Agreement and again at the time of the Reorganization and Completion (except as otherwise indicated and with such changes to verb tenses as are necessary to reflect the Transaction steps that have or have not yet been completed at the time the applicable representations and warranties are made): |
| |
2.1.1 | The Reorganization is intended to further the business purposes described in the statement attached as Exhibit A. |
| |
2.1.2 | The Transaction is intended to facilitate the combination of ABI and SABMiller in a manner that takes into account numerous considerations, including UK and Belgian law, applicable regulatory rules, ABI and |
SABMiller corporate objectives, shareholder objectives (including obtaining tax-free treatment for SABMiller shareholders who receive equity as part of the Transaction), and transactional Taxes (such as stamp duties).
| |
2.1.3 | ABI has been advised that the merger structure has enabled consideration as to whether UK stamp duty relief might be available. By contrast, UK stamp duty would be payable on a direct acquisition of SABMiller by ABI, and no relief would be available. With a NewCo structure stamp duty relief may be available pursuant to section 77 Finance Act 1986 if, among other things, all of the shares of SABMiller are exchanged by SABMiller shareholders for shares in NewCo, such that the share register of SABMiller before the exchange is identical to the share register of NewCo after the exchange. ABI and its advisors have borne the UK stamp duty implications of the Transaction in mind in the structuring process. |
| |
2.1.4 | (a) As of the date of this Agreement, (i) the Current Information set forth in the 2.7 Announcement, as supplemented by the Current Information Statement, is a true, accurate and complete description of the Transaction in general and the Reorganization in particular, except that the foregoing may exclude any information (x) as to which Altria has Actual Knowledge of the underlying facts and (y) provided by SABMiller, to the extent related solely to SABMiller and as to which ABI has no Actual Knowledge and (ii) there are no Relevant Agreements and Arrangements. |
| |
(b) | At least six Business Days prior to the SABMiller General Meeting, ABI will provide Altria with an up-to-date statement of the Relevant Information and copies of Relevant Agreements and Arrangements, if any (it being understood that ABI will endeavor to provide copies of Relevant Agreements and Arrangements as soon as is reasonably practicable, but no later than such date). |
| |
(c) | At Completion, (i) the statement of the Relevant Information provided under clause 2.1.4(b) is true, accurate, and complete (except that the foregoing may exclude any information (x) as to which Altria has Actual Knowledge of the underlying facts and (y) provided by SABMiller, to the extent related solely to SABMiller and as to which ABI has no Actual Knowledge) and (ii) there are no Relevant Agreements and Arrangements other than any Relevant Agreements and Arrangements provided under clause 2.1.4(b). |
| |
2.1.5 | The Offer Agent will not be authorized to respond to the Belgian Offer on behalf of any SABMiller Shareholders earlier than the Day after the Reorganization. |
| |
2.1.6 | The Offer Agent will act as an agent of the SABMiller Shareholders and will act only on their instructions or deemed instructions in accordance with the 2.7 Announcement. |
| |
2.1.7 | There will be a period of at least four business hours (Brussels, Belgium time) on the day after the Reorganization during which SABMiller Shareholders receiving Initial Shares will be entitled to make or change elections for the Partial Share Alternative that will include at least one business hour (New York, New York time) on the day after the Reorganization, except such opportunity to make or change elections shall not be available where doing so would be in breach of the Altria Irrevocable Undertaking or a similar irrevocable undertaking. |
| |
2.1.8 | NewCo will borrow the Stamp Duty Funds pursuant to a loan (i) that is evidenced in writing, (ii) that bears interest at a market rate, (iii) that is otherwise on arm’s length terms, (iv) that is not extinguished or deemed extinguished for U.S. Federal income Tax purposes in the Transaction for non-cash consideration and (v) the proceeds of which are used solely to pay all or a portion of the Stamp Duty. |
| |
2.1.9 | SABMiller will repurchase the Deferred Shares (which shall be held by SABMiller in treasury) prior to the UK Scheme Record Time. |
| |
2.1.10 | The SABMiller register of members will be updated to show NewCo as the sole shareholder of SABMiller (other than in respect of the Deferred Shares, which shall be held by SABMiller in treasury) as soon as reasonably practicable after the Initial Share Issuance and, in any event, no later than the Day before the Belgian Offer opens. |
| |
2.1.11 | After the SABMiller register of members is updated to show NewCo as the sole shareholder of SABMiller (other than in respect of the Deferred Shares, which shall be held by SABMiller in treasury), the former SABMiller Shareholders will no longer have legal ownership or beneficial ownership of SABMiller for the purposes of English law. |
| |
2.1.12 | The Conversion will occur as soon as reasonably practicable after the SABMiller register of members is updated to show NewCo as the sole shareholder of SABMiller (other than in respect of the Deferred Shares, which shall be held by SABMiller in treasury) and, in any event, no later than the Day before the Belgian Offer opens. |
| |
2.1.13 | The registration of SABMiller Shareholders as the holders of Initial Shares in the share register of NewCo will occur as soon as reasonably practicable after the Initial Share Issuance and, in any event, no later than the Day before the Belgian Offer opens. |
| |
2.1.14 | After the SABMiller Shareholders are registered in the share register of NewCo as holders of the Initial Shares, they will have legal ownership of, |
and full rights and interest in, the Initial Shares for the purposes of Belgian law.
| |
2.1.15 | At the time of the Reorganization, neither SABMiller nor NewCo will be borrowers, lenders, or guarantors of any financing used to effectuate any step of the Reorganization, other than the borrowing and lending of the Stamp Duty Funds. |
| |
2.1.16 | Unless a Section 351 contribution has been agreed pursuant to clause 2.4, the CTB Election will be effective as of the day after the Conversion, provided that the CTB Election will be provided to Altria within five Business Days of Completion and will not be filed without Altria’s written consent, which will not be unreasonably withheld. |
| |
2.1.17 | Immediately following the Reorganization, the SABMiller Shareholders will own all of the issued share capital of NewCo and will own their NewCo shares solely by reason of their ownership of SABMiller shares immediately before the Reorganization, in identical proportions. |
| |
2.1.18 | There are no fractional shares of SABMiller outstanding. |
| |
2.1.19 | Immediately before the Reorganization, SABMiller will have one class of shares outstanding (other than the Deferred Shares, which will be held by SABMiller in treasury) and immediately after the Reorganization, NewCo will have one class of shares outstanding. |
| |
2.1.20 | From the Initial Share Issuance through the end of the day before the effective date of the CTB Election, ABI will not permit either SABMiller or NewCo to divest assets except in the ordinary course of business or as required to effectuate the UK Scheme. |
| |
2.1.21 | At no time before the liquidation deemed to occur for U.S. Federal income Tax purposes pursuant to the CTB Election will NewCo (i) hold any assets other than the minimum capital required under Belgian law and the Stamp Duty Funds, (ii) have any Tax attributes for U.S. Federal income Tax purposes, or (iii) have engaged in any business activities, other than any activities required in connection with the Transaction or in satisfaction of any of the Conditions. |
| |
2.1.22 | Immediately following the Reorganization, NewCo will possess (directly or through disregarded entities) the same assets, other than the minimum capital required under Belgian law, the Stamp Duty Funds and the SABMiller Shares, as those possessed by SABMiller (directly or through disregarded entities) immediately before the Reorganization. |
| |
2.1.23 | ABI and ABI Affiliates will not take any position that the Initial Shares were owned at any point during the Reorganization by anyone other than the SABMiller Shareholders or that the SABMiller Shareholders received |
any consideration from NewCo in exchange for their SABMiller shares other than the Initial Shares in the Reorganization; provided that this representation will not be breached as a result of payment by ABI of Stamp Duty or any failure to pursue or obtain a reclaim of Stamp Duty.
| |
2.1.24 | ABI and ABI Affiliates will not take any position that the Reorganization fails to qualify as a reorganization under Section 368(a)(1)(F) of the Code. |
| |
2.1.25 | The Recapitalization will further the business purpose of issuing shares with the terms of the Restricted Shares to Altria and certain other shareholders of SABMiller. |
| |
2.1.26 | The number of Restricted Shares issued to Altria in the Recapitalization was determined by the parties negotiating at arm’s length and in good faith. |
| |
2.1.27 | The Recapitalization is not part of a plan to periodically increase the proportionate interest of any shareholder in the assets or earnings and profits of NewCo. |
| |
2.1.28 | NewCo will pay its own expenses and will not pay Altria’s expenses, if any, in each case incurred in connection with the Recapitalization. |
| |
2.1.29 | There is no plan or intention for NewCo to redeem or otherwise to reacquire the NewCo Restricted Shares to be issued to Altria in the Recapitalization. For the avoidance of doubt, the Restricted Shares may be converted to ordinary shares. |
| |
2.1.30 | NewCo and its Affiliates will treat the NewCo Restricted Shares issued in the Recapitalization as equity for all purposes (including Tax, accounting, and financial reporting) and will take no action inconsistent with such treatment. |
| |
2.1.31 | ABI shall deliver to Altria a certificate (i) six Business Days prior to the date of each of the UK Scheme Court Hearing and the SABMiller General Meeting and (ii) on the date of Completion, and dated as of each such date (the “Applicable Date”) and signed by ABI’s Chief Legal Officer, certifying (in such person’s capacity as Chief Legal Officer of ABI and not in such person’s personal capacity) that (i) each representation and warranty included in this Section 2.1 is true and correct as of the Applicable Date, as though made at the Applicable Date (except as otherwise indicated and with such changes to verb tenses as are necessary to reflect the Transaction steps that have or have not yet been completed at the Applicable Date) and (ii) all obligations and all covenants required by this Section 2.1 to be performed or complied with on or prior to the Applicable Date have been performed or complied with. |
| |
2.1.32 | Where ABI’s consent is required, ABI will not consent to any amendments to loans secured by SABMiller Shares or the Initial Shares from the Initial Share Issuance through the end of the day before the effective date of the CTB Election and where ABI’s consent is not required, ABI shall inform Altria of any such amendment (other than an amendment of an employee loan) of which it has Actual Knowledge. |
| |
2.1.33 | Where ABI’s consent is required, ABI will not consent to any SABMiller issuance of debt that would be treated as equity for U.S. Federal income Tax purposes and where ABI’s consent is not required, ABI shall inform Altria of any such issuance of which it has Actual Knowledge. |
| |
2.2 | To the extent (i) any changes to the structure of the Transaction or other facts relating to the Transaction are made as contemplated in and in accordance with the terms of Section 24 of the Altria Irrevocable Undertaking with the prior written consent of Altria or (ii) the parties agree that the foregoing representations, warranties, agreements and covenants should be amended to reflect facts known at such time, in each case the parties to this Agreement shall cooperate in good faith to amend the foregoing representations, warranties, agreements and covenants to the extent necessary to reflect such changes or facts, as applicable, and such amended representations, warranties, agreements and covenants shall replace and supersede the representations, warranties, agreements and covenants given in this Agreement; provided, however, that no amendment to the representations, warranties, agreements and covenants shall be required to be made if it would result in Altria being unable to obtain the Tax Opinions. ABI acknowledges that, pursuant to the Altria Irrevocable Undertaking, Altria has the right to receive copies of final and intervening significant drafts of the UK Scheme Documents, the Belgian Offer Prospectus, the Belgian Merger Documents and any ancillary documents relating thereto as Altria reasonably requires, including as is reasonably necessary to obtain the Tax Opinions. Further, ABI agrees to provide to Altria any other information reasonably requested by Altria unless ABI believes in good faith and consistent with advice from ABI’s nationally recognized U.S. Tax counsel, that such information is clearly irrelevant to Altria’s ability to obtain the Tax Opinions (in which case ABI or ABI’s U.S. Tax counsel shall provide Altria with an explanation of the basis for such belief). |
| |
2.3 | ABI will procure that SABMiller repurchases any SABMiller Shares issued, allotted or transferred by SABMiller in satisfaction of any options or stock appreciation rights granted under the SABMiller Share Option Plans which are or first become exercisable (or which would have become exercisable but for any prohibition on exercise introduced into the rules of the relevant SABMiller Share Option Plan or otherwise imposed by SABMiller) in the period commencing with the approval of the Scheme by the Court and ending on Completion (and which are not in fact exercised and satisfied prior to the UK Scheme Record Time). |
| |
2.4 | Upon a Reorganization Failure Event: |
| |
2.4.1 | Altria will provide to ABI written confirmation from Wachtell, Lipton, Rosen, & Katz and McDermott Will & Emery LLP that there has been a Reorganization Failure Event as soon as reasonably practicable after becoming aware of such Reorganization Failure Event but in any event before the SABMiller General Meeting if Altria has become aware of such Reorganization Failure Event before the SABMiller General Meeting; and |
| |
2.4.2 | The parties shall cooperate in good faith and use reasonable best efforts to cause Altria to be able to obtain the Tax Opinions. If, after such cooperation and efforts, the parties agree that Altria is still unable to obtain the Tax Opinions, then at either ABI’s request, provided Altria is able to obtain the Section 351 Opinions, or at Altria’s request: |
| |
(a) | The parties shall cooperate in good faith to implement the Transaction in a manner that allows the Initial Share Issuance to qualify for non-recognition of gain and loss for U.S. Federal income Tax purposes under Section 351 of the Code (together with the Belgian Merger), including by not making the CTB Election; and |
| |
(b) | The parties shall cooperate in good faith to amend this Agreement to reflect such change. Exhibit C reflects a non-exclusive list of the amendments the parties expect to make to this Agreement. For the avoidance of doubt, (i) no amendment shall be required to clauses 2.1.1 through 2.1.4 of this Agreement and (ii) no representation, other than those in clauses 2.1.1 through 2.1.4 of this Agreement and those in Exhibit B, shall be required to be made to the extent such representation is not true. |
3.ABI GROUP AND ALTRIA TAX OBLIGATIONS
| |
3.1 | ABI and each ABI Affiliate will comply with all reporting and record-keeping requirements applicable to the Reorganization or the Recapitalization that are prescribed by the Code, the Treasury Regulations, or by forms, instructions, or other publications of the IRS. Neither ABI nor any ABI Affiliate will take any position on any Federal, state or local income or franchise Tax Return, or take any other Federal, state or local income or franchise Tax reporting position that is inconsistent with the treatment of the Reorganization or Recapitalization as tax-free reorganizations within the meaning of Section 368 of the Code. |
| |
3.2 | Neither ABI nor any ABI Affiliate will take any action, fail to take any action or engage in any transaction (other than any action or transaction set forth in the 2.7 Announcement) that would cause Altria to incur a Tax pursuant to (i) Treasury Regulation Section 1.367(a)-3(d) in connection with the Reorganization or (ii) Treasury Regulation Section 1.367(a)-8 either as a result of an original Gain Recognition Agreement or a replacement Gain Recognition Agreement that was entered into in connection with or as a result of the Reorganization. |
| |
3.3 | ABI will notify Altria of any action or transaction taken after Completion by ABI or any ABI Affiliate that (i) would reasonably be expected to cause Altria to incur a Tax under any Gain Recognition Agreement entered into by Altria with respect to SABMiller in connection with the Reorganization or (ii) if such action or transaction were taken as “part of the same transaction” as the Reorganization (within the meaning of Treasury Regulation Section 1.367(a)-3(d)), would require Altria to enter into a Gain Recognition Agreement (including a replacement Gain Recognition Agreement). Such notice shall describe any such action or transaction in sufficient detail to enable Altria to comply with the requirements of any Gain Recognition Agreement or with Treasury Regulation Section 1.367(a)-8 or any successor provision. |
| |
3.4 | Altria Tax Obligations |
| |
3.4.1 | Altria will not enter into any Gain Recognition Agreement with respect to any action or transaction taken after Completion by ABI or any ABI Affiliate (and will not file any Tax Return or take any position reflecting gain as a result of such action or transaction) if ABI provides Altria with an opinion of counsel from a nationally recognized law firm, Deloitte, Ernst & Young, KPMG or PricewaterhouseCoopers in form and substance satisfactory to Altria that such action or transaction should not be treated as “part of the same transaction” as the Reorganization for purposes of Treasury Regulation Section 1.367(a)-3(d). |
| |
3.4.2 | If so requested by ABI, Altria will enter into a Gain Recognition Agreement with respect to any action or transaction taken after Completion by ABI or any ABI Affiliate, including on a protective basis. |
4.INDEMNIFICATION
| |
4.1 | Indemnification by ABI |
| |
4.1.1 | ABI will indemnify and hold harmless Altria and each Altria Affiliate against any Federal, state or local income or franchise Taxes and any reasonable out-of-pocket legal and accounting costs directly related thereto that Altria incurs arising out of or in connection with: |
| |
(a) | the failure of the Reorganization to qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code primarily as a result of an act, a failure to act or a condition that is permitted to exist by NewCo, any NewCo Affiliate, ABI or any ABI Affiliate in breach of any representation, agreement or covenant in clauses 2.1.1 through 2.1.24 or clause 3.1 of this Agreement; |
| |
(b) | the failure of the Recapitalization to qualify as a reorganization within the meaning of Section 368(a)(1)(E) of the Code primarily as a result of an act, a failure to act or a condition that is permitted to exist by NewCo, any NewCo Affiliate, ABI or any ABI Affiliate |
in breach of any representation, agreement or covenant in clause 2.1.25 through 2.1.30 or clause 3.1 of this Agreement; or
| |
(c) | the application (i) of Treasury Regulation Section 1.367(a)-3(d) in connection with the Reorganization or (ii) Treasury Regulation Section 1.367(a)-8 either as a result of an original Gain Recognition Agreement or a replacement Gain Recognition Agreement that was entered into in connection with or as a result of the Reorganization, in each case as a result of an act, a failure to act or a condition that is permitted to exist by NewCo, any NewCo Affiliate, ABI or any ABI Affiliate in breach of any agreement or covenant in clause 3.2 or clause 3.3 of this Agreement, provided that ABI shall not be liable if both (a) such Tax is imposed as a result of a change in Treasury Regulation Section 1.367(a)-3(d) or 1.367(a)-8 occurring after Completion and (b) such Tax is imposed as a result of an act, a failure to act or a condition that is permitted to exist by NewCo, any NewCo Affiliate, ABI or any ABI Affiliate before the date on which such change is officially proposed or promulgated. |
| |
4.2 | Limitations on Indemnification |
| |
4.2.1 | No party is entitled to recover more than once in respect of any one Tax or cost giving rise to a claim under this Agreement. |
| |
4.2.2 | The amount that Altria or the relevant Altria Affiliate is entitled to receive (the “Claimed Amount”) with respect to ABI’s indemnity obligation pursuant to clause 4.1.1 shall be determined as follows: |
| |
(a) | If Altria or an Altria Affiliate has disposed of all of the Restricted Shares issued to Altria in the Transaction in a taxable transaction before any indemnity payment is made, the Claimed Amount shall equal the interest, penalties, fines, related liabilities and additions to taxes and costs actually paid in respect of the relevant Tax Determination, but the tax amount (determined without regard to interest, penalties, fines, related liabilities and additions to tax) shall not be included in the Claimed Amount; |
| |
(b) | If Altria or an Altria Affiliate holds all or a portion of the Restricted Shares issued to Altria in the Transaction at the time any indemnity payment is made, the Claimed Amount shall equal (i) the Taxes and costs actually paid by Altria or any Altria Affiliate with respect to the relevant Tax Determination, minus (ii) the tax amount (determined without regard to interest, penalties, fines, related liabilities and additions to tax) to the extent that Altria or any Altria Affiliate has realized any United States Federal income Tax benefit for the basis attributable to the gain which resulted in |
the Tax referred to in clause (i) as of the date on which the Claimed Amount is paid by ABI. At any subsequent time that Altria or an Altria Affiliate realizes a United States Federal income Tax benefit for the basis attributable to the gain which resulted in the Tax referred to in clause (i) of the preceding sentence, Altria agrees to repay to ABI the corresponding tax amount (determined without regard to interest, penalties, fines, related liabilities and additions to tax). The parties shall consult and may mutually agree as to how a payment under this clause 4.2.2(b) should be treated for Tax and other purposes.
| |
(c) | For purposes of this clause 4.2.2, the term “Restricted Shares” shall include any ordinary shares of NewCo into which Restricted Shares have been converted. |
| |
4.2.3 | If Altria (a) enters into a Gain Recognition Agreement, files a Tax Return or takes a position in violation of clause 3.4.1 or (b) fails to enter into a Gain Recognition Agreement in violation of clause 3.4.2, ABI shall have no obligation to indemnify Altria under clause 4.1 for any Tax that Altria incurs arising out of or in connection with such Gain Recognition Agreement, Tax Return or position or as a result of such failure, as applicable. |
| |
4.2.4 | Notwithstanding any other provision in this Agreement, Altria’s failure to file a Gain Recognition Agreement as a result of ABI having provided the opinion described in clause 3.4.1, shall not affect Altria’s indemnity rights hereunder. |
| |
4.2.5 | For the avoidance of doubt, if the Reorganization fails to meet the technical requirements of Section 368(a)(1)(F) of the Code or Section 351 of the Code, as applicable (e.g., because of any “structural” or “technical” issue), ABI shall have no obligation to indemnify Altria or any Altria Affiliate under clause 4.1 except to the extent such failure arises primarily as a result of an act, a failure to act or a condition that is permitted to exist by NewCo, any NewCo Affiliate, ABI or any ABI Affiliate in breach of any representation, agreement or covenant referenced in clause 4.1. |
| |
4.3.1 | Subject to clause 6, if at any time Altria becomes entitled to receive a Claimed Amount (plus the amount of any indemnified expenses referenced in clause 4.1.1), then ABI will, in full and final satisfaction of its obligation, pay in U.S. dollars to Altria the Claimed Amount (plus the amount of any indemnified expenses referenced in clause 4.1.1) by wire transfer. |
| |
4.4.1 | Without duplication for any amounts previously taken into account pursuant to clause 4.2.2, in the event Altria or an Altria Affiliate receives a refund or credit of Taxes for which ABI has indemnified Altria or any Altria Affiliate, Altria shall pay or cause to be paid to ABI the amount of such refund or credit (to the extent of any indemnity payment made with respect thereto), in the case of a refund, within ten (10) Business Days after receipt thereof and, in the case of a credit, within ten (10) Business Days after such credit is allowed or applied against payment of any Tax (or estimate thereof). |
| |
4.5 | Sole and Exclusive Remedy |
| |
4.5.1 | From and after Completion, the sole and exclusive remedy of Altria and each Altria Affiliate against ABI and its Affiliates, with respect to all claims of any nature whatsoever relating to any breach of any representation, agreement or covenant contained in this Agreement, shall be pursuant to and limited by the indemnification provisions set forth in this clause 4. |
5.COOPERATION
| |
5.1.1 | Each of Altria and ABI shall cooperate reasonably (and cause their respective Affiliates to cooperate reasonably) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with income Tax matters relating to the Transaction or to ABI or any ABI Affiliate including by using commercially reasonable efforts to: |
| |
(a) | assist the other party in preparing any Tax Return which such other party is responsible for preparing and filing; |
| |
(b) | cooperate fully in preparing for any audit of, or dispute with, a Tax Authority regarding Tax consequences; |
| |
(c) | provide to the other party or to any Tax Authority as reasonably requested all information, records and documents, including as may be required to comply with Treasury Regulation Section 1.367(a)-(8); |
| |
(d) | provide timely notice to the other party in writing of any pending or threatened Tax audit or assessment which could have a material impact to Altria, and furnish the other with copies of all correspondence received from any Tax Authority in connection with any such audit; and |
| |
(e) | provide all information, records and documents reasonably requested by the other party to substantiate any of the foregoing. |
In the case of the provision of assistance, information, records or documents pursuant to this clause 5.1.1, the party requesting such assistance, information, documents or records shall bear the direct costs and expenses (including reasonable costs and expenses of any internal or external advisors engaged with the prior written approval of the other party, not to be unreasonably withheld) reasonably incurred by the other party in providing such assistance, information, documents or records, except that ABI shall bear its own costs incurred in connection with providing assistance, information, records or documents pursuant to this clause 5.1.1 for purposes of (i) determining whether a Gain Recognition Agreement (including a replacement Gain Recognition Agreement) should be filed in connection with the Reorganization, (ii) matters related to annual reporting compliance with Treasury Regulation Section 1.367(a)-8 under any such Gain Recognition Agreement and (iii) determining whether gain is triggered under any such Gain Recognition Agreement.
| |
5.1.2 | Without limiting the foregoing, ABI shall use commercially reasonable efforts to provide Altria with the following: |
| |
(a) | The source and classification for United States Federal income Tax purposes of dividends received by Altria from NewCo, as well as any documentation reasonably requested by Altria to substantiate such determinations; and |
| |
(b) | The amount and classification for such purposes of income Taxes deemed to have been paid in respect of dividends received by Altria, as well as any documentation reasonably requested by Altria to substantiate such income Tax payments. |
| |
5.1.3 | Altria shall bear the direct costs and expenses (including reasonable costs and expenses of any internal or external advisors engaged with the prior written approval of the other party, not to be unreasonably withheld) reasonably incurred by ABI and its auditors in providing the assistance described in clause 5.1.2. |
| |
5.1.4 | Each of the parties is responsible for its own Tax reporting, and neither party makes any representations or warranties regarding the sufficiency of any assistance, information, documents or records provided pursuant to this clause 5.1 to ensure the availability of any Tax benefit. |
| |
5.1.5 | Information received by Altria pursuant to this clause 5.1 shall be used solely for income and franchise Tax, and financial reporting purposes and will not be disclosed to any person for any other purpose. |
| |
5.1.6 | The ABI Group shall not be required to maintain its accounts according to U.S. Tax accounting principles. |
| |
5.1.7 | ABI shall provide to Altria annual forecasts of the direct costs to be borne by Altria pursuant to clauses 5.1.1 and 5.1.3. |
| |
5.2 | Transactions and Elections |
| |
5.2.1 | Altria and ABI agree to meet prior to 60 days after Completion for the purpose of: |
| |
(a) | discussing a reasonable procedure to follow regarding the determination of Altria’s foreign Tax credits in accordance with clause 5.1 hereof; |
| |
(b) | discussing the ABI Affiliates for which a local law conversion could be made to facilitate a disregarded entity election for United States Federal income Tax purposes; |
| |
(c) | discussing the ABI Affiliates for which a disregarded entity election for United States Federal income Tax purposes could be made (which elections will be the responsibility of and prepared by Altria); |
| |
(d) | discussing a general plan for determining the future source of ABI dividends for United States Federal income Tax purposes; |
| |
(e) | discussing integration transactions with respect to the indirect stock transfer rules under Treasury Regulation Section 1.367(a)-3(d); and |
| |
(f) | reviewing the requirements of Treasury Regulation Section 1.367(a)-8 with respect to any Gain Recognition Agreements required by indirect stock transfers under Treasury Regulation Section 1.367(a)-3(d). |
For the avoidance of doubt, nothing in this clause 5.2.1 shall obligate ABI or NewCo or any of their respective Affiliates to engage in any action or transaction discussed during the meeting referenced in this clause 5.2.1.
| |
5.2.2 | Following Completion, ABI will use commercially reasonably efforts to consult with Altria prior to engaging in any material (i) business combination, (ii) sale or purchase of assets, (iii) reorganization or (iv) similar transaction, in each case that is outside the ordinary course of its business, would not constitute a change of control and is reasonably anticipated to have a material impact on the non-U.S. Taxes deemed to have been paid with respect to ABI dividends received by Altria; provided that nothing in this clause 5.2.2 shall interfere with the timing of any such |
transaction or ABI’s ability to pursue any such transaction in the manner and according to the schedule determined by ABI in its sole discretion.
| |
5.2.3 | Following Completion, ABI will give reasonable consideration to requests by Altria that ABI and ABI Affiliates make United States Federal income Tax elections with respect to newly-acquired businesses. |
| |
5.2.4 | ABI will make members of its Tax department available for meetings with representatives of Altria to discuss matters of mutual interest, including but not limited to the matters described in clause 5.2.2, not less than twice a year. |
| |
5.2.5 | ABI shall consult with Altria prior to knowingly taking any material position with respect to a material income Tax Return relating in whole or in part to SABMiller or any SABMiller Affiliate which was a SABMiller Affiliate at or prior to Completion for a taxable period ending after the Completion Date that is materially inconsistent with a position taken on an income Tax Return relating in whole or in part to SABMiller or any SABMiller Affiliate which was a SABMiller Affiliate at or prior to Completion with respect to a period ending on or before the Completion Date unless (i) at the time the position is taken no additional Tax Determinations can be made with respect to such prior period, (ii) the position is reasonably required by a Change in Law or (iii) ABI has received an opinion from a nationally recognized law firm that the prior position is not likely to prevail. For the avoidance of doubt, this clause 5.2.5 shall not prevent or limit ABI or any ABI Affiliate from engaging in any Tax planning or similar activities after Completion. |
| |
5.3 | Administrative Proceedings and Litigation |
| |
5.3.1 | Altria shall promptly notify ABI in writing upon its receipt of notice of any pending or threatened audits, examinations or assessments which may affect the Tax liabilities for which ABI would be required to indemnify Altria pursuant to clause 4.1 (a “Tax Claim”). |
| |
5.3.2 | With respect to any Tax Claim (or series of related Tax Claims) in which the aggregate potential indemnification amount is less than $500 million, Altria shall have the right to control any United States Federal income and consolidated or combined state or local income or franchise Tax audit or administrative or other proceeding (including as part of the Continuous Audit Process) of Altria or any Altria Affiliate involving a Tax Claim (“Tax Proceeding”); provided, however, that (i) Altria shall provide ABI with a timely and reasonably detailed account of each stage of such Tax Proceeding to the extent it involves the Tax Claim, (ii) Altria shall consult with ABI before taking any significant action in connection with such Tax Claim, (iii) Altria shall consult with ABI and offer ABI an opportunity to comment before submitting any written materials prepared or furnished in |
connection with such Tax Claim, (iv) Altria shall defend such Tax Proceeding diligently and in good faith as if it were the only party in interest in connection with such Tax Proceeding and such Tax Claim were the only issue in dispute (i.e., Altria shall not “trade” such Tax Claim for any other issue in dispute), (v) ABI at its own expense shall be entitled to participate in such Tax Proceeding and attend any meetings or conferences with the relevant taxing authority to the extent they involve the Tax Claim, and (vi) Altria shall not settle, compromise or abandon any such Tax Proceeding to the extent impacting the Tax Claim, without obtaining the prior written consent of ABI, which consent shall not be unreasonably withheld, conditioned or delayed. If such consent is reasonably withheld then either (x) Altria may settle if Altria acknowledges that it will forego any claim for indemnity hereunder or (y) at Altria’s election, ABI may assume the defense of the Tax Claim. If ABI assumes such defense, (1) Altria shall have the right (but not the duty) to participate in the defense thereof and to employ counsel, at its own expense, (2) ABI shall not assert that the Tax Claim, is not within the ambit of clause 4.1.1 (unless ABI has withheld consent because Altria has failed to comply with subclauses (i)-(v) of this clause 5.3.2) and (3) Altria shall have notice and consultation rights similar to subclauses (i)-(v) of this clause 5.3.2.
| |
5.3.3 | With respect to any Tax Claim (or series of related Tax Claims) in which the aggregate potential indemnification amount equals or exceeds $500 million, Altria shall use best efforts to bifurcate such Tax Claim or Claims into a separate Tax Proceeding. |
| |
(a) | If Altria is able to successfully bifurcate the Tax Proceeding, ABI and Altria shall have the right to control jointly, each at its own expense (subject to indemnity under clause 4.1.1), such Tax Proceeding; provided, however, that Altria shall have the right to control such Tax Proceeding if it waives its indemnification rights under clause 4 for such Tax Claim or Claims. Each of Altria and ABI shall defend any bifurcated Tax Proceeding diligently and in good faith as if it were the only party in interest and such Tax Claim or Claims were the only issue in dispute. Neither ABI nor Altria shall settle any such audit or proceeding without the other party’s consent, which consent shall not be unreasonably withheld, conditioned or delayed. |
| |
(b) | If Altria is not able to successfully bifurcate the Tax Proceeding, clause 5.3.2 shall govern such Tax Claim or Claims. |
| |
5.4 | With respect to any person that would be an Affiliate of ABI but for the fact that equity interests in such person are listed on a stock exchange, ABI shall use commercially reasonable efforts to obtain such information and provide such assistance to Altria with respect to such person as ABI would be required to |
obtain or provide, as applicable, pursuant to this clause 5 were such person an Affiliate of ABI.
| |
5.5 | Altria acknowledges and agrees that any information, records and documents provided pursuant to clause 5.1.1(e) and clause 5.1.2 may be provided in the language in which they were created and ABI shall be under no obligation to translate any of such documents, and that any assistance provided by any of ABI’s employees, representatives or agents may be provided in the language such employees, representatives or agents speak. |
6.NOTICES
| |
6.1 | Notice as to Indemnification |
| |
6.1.1 | If Altria determines that it (or an Altria Affiliate) is or may be entitled to indemnification from ABI pursuant to clause 4.1, Altria shall promptly deliver to ABI a written notice and demand therefor (the “Notice”) specifying the basis for its claim for indemnification, the nature of the claim, if known, and the amount for which Altria reasonably believes it is entitled to be indemnified. The Notice must be received by ABI as soon as reasonably possible, and in any event no later than sixty (60) days before the expiration of the applicable Tax statute of limitations; provided, however, that if Altria does not receive notice from the applicable Tax Authority (the “Government Notice”) that an item exists that could give rise to a claim for indemnification hereunder more than thirty (30) days before the expiration of the applicable Tax statute of limitations, then the Notice must be received by ABI promptly (and in any event within 2 Business Days) after Altria receives the Notice. Unless ABI objects to the claim for indemnification (in the manner set forth in clause 6.1.2), ABI shall pay Altria the amount set forth in the Notice within thirty (30) days after receipt of the Notice; provided, however, that if the amount for which Altria reasonably believes it is entitled to be indemnified is not known at the time of the Notice, Altria shall deliver to ABI a further notice specifying such amount as soon as reasonably practicable after such amount is known and payment shall then be made as set forth above. |
| |
6.1.2 | ABI may object to the claim for indemnification (or the amount thereof) set forth in any Notice by giving Altria, within thirty (30) days following receipt of such Notice, written notice setting forth ABI’s grounds for its objection (the “Objection Notice”). If ABI does not give Altria the Objection Notice within such thirty (30) day period, ABI shall be deemed to have acknowledged its liability for the amount of such claim and Altria may exercise any and all of its rights under applicable law to collect such amount. |
| |
6.1.3 | If the parties are unable to settle any dispute regarding a claim for indemnification within thirty (30) days after the receipt of the Objection |
Notice, the parties shall jointly request an independent arbitrator to resolve the dispute as promptly as possible. ABI shall pay Altria the amount determined by the independent arbitrator to be owed to Altria, if any, within ten (10) days of ABI’s receipt of such determination in writing.
| |
6.1.4 | Failure by Altria to promptly deliver to ABI a Notice in accordance with clause 6.1.1 shall not relieve ABI of any of its obligations hereunder except to the extent ABI is prejudiced by such failure. |
7.GOVERNING LAW
| |
7.1 | This Agreement is governed by New York law applicable to transactions to be performed therein and without regard to conflicts of laws provisions. |
| |
7.2 | Each of Altria and ABI hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan (Southern District) in the City of New York in any suit, action or proceeding arising out of or relating to this Agreement and agrees that any such suit, action or proceeding shall be brought solely in such courts. Each of Altria and ABI hereby agree that service of process in any such suit, action or proceeding brought in any such court may be made upon the process agent appointed pursuant to clause 7.3 (“Process Agent”) and agrees that the failure of such Process Agent to give any notice of any such service shall not impair or affect the validity of such service or of any judgment rendered in any action or proceeding based thereon. Each of Altria and ABI further consents to the service of process in any suit, action or proceeding in such courts by the mailing thereof by either of parties hereto by registered or certified mail, postage prepaid, to the other party at its address specified in clause 7.2.1. Each of ABI and Altria agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to serve legal process in any other manner permitted by law or to bring any action or proceeding relating to this Agreement or the Transaction in the courts of any jurisdiction. |
| |
7.2.1 | Service of process shall be made to the respective parties at the following addresses: |
| |
Attention: | Chief Legal Officer & Corporate Secretary |
| |
Physical address: | c/o Anheuser-Busch InBev |
Brouwerijplein 1
Leuven 3000
Belgium
| |
Email address: | sabine.chalmers@ab-inbev.com |
with copies to (but such copies shall not constitute notice):
| |
Attention: | Lauren Angelilli and Chris Fargo |
| |
Physical address: | Cravath, Swaine & Moore LLP |
825 Eighth Avenue
New York, New York 10019
USA
| |
Email address: | langelilli@cravath.com, cfargo@cravath.com |
| |
Attention: | Mark Rawlinson and Alison Smith |
| |
Physical address: | Freshfields Bruckhaus Deringer LLP |
65 Fleet Street
London EC4Y 1HS
United Kingdom
| |
Email address: | mark.rawlinson@freshfields.com, |
| |
| alison.smith@freshfields.com |
| |
Attention: | General Counsel |
| |
Physical address: | c/o Altria Group, Inc. |
6601 West Broad Street
Richmond, VA 23230
USA
| |
Email address: | Denise.Keane@altria.com |
with copies to (but such copies shall not constitute notice):
| |
Attention: | Jodi J. Schwartz and Andrew J. Nussbaum |
| |
Physical address: | Wachtell, Lipton, Rosen & Katz |
51 West 52nd Street
New York, New York 10019
USA
| |
Email address: | JJSchwartz@wlrk.com, AJNussbaum@wlrk.com |
| |
Attention: | Martin L. Milner |
| |
Physical address: | McDermott Will & Emery LLP |
The McDermott Building
500 North Capitol Street, N.W.
Washington, DC 20001
USA
Email address:Mmilner@mwe.com
| |
7.3 | Each of Altria and ABI agrees to appoint a Process Agent from the Completion Date through the date on which all liabilities pursuant to this Agreement are satisfied and no additional liabilities may arise to: |
| |
7.3.1 | receive on its and its Affiliates behalf copies of the summons and complaint and any other process which may be served in any suit, action or proceeding in any New York State or Federal Court sitting in the Borough of Manhattan in New York City arising out of or relating to this Agreement; and |
| |
7.3.2 | forward to it and its Affiliates at their respective addresses copies of any summons, complaint or other process which such Process Agent receives in connection with its appointment. |
Each party will give prompt notice of the appointment of its Process Agent’s address.
| |
7.4 | Each of Altria and ABI irrevocably and unconditionally waive, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in New York State or Federal court, sitting in the Borough of Manhattan in New York City. Each of ABI and Altria hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court. |
| |
7.5 | Each of Altria and ABI hereby waives its right to trial by jury in any suit, action or proceeding with respect to this Agreement. |
| |
7.6 | This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and except to the extent |
specifically set forth herein, supersedes all prior agreements and understandings relating to such subject matter.
| |
7.7 | As of the Completion Date, the SABMiller TMA and any other agreements or understandings regarding Taxes between Altria and Altria Affiliates, on the one hand, and SABMiller and SABMiller Affiliates on the other hand, shall be terminated and shall have no further force or effect. |
| |
7.8 | All rights and obligations of the parties under this Agreement shall be conditioned upon Completion. This Agreement shall terminate automatically if the Transaction has been withdrawn or lapsed. |
| |
7.9 | Each of the parties agrees and acknowledges that, upon completion of the Belgian Merger, all of ABI’s rights and obligations under this Agreement shall be assumed by NewCo, by operation of Belgian law. |
| |
7.10 | At or before Completion, this Agreement shall be amended to make NewCo a party and, where appropriate, references in this Agreement to ABI shall be deemed to include references to NewCo. |
| |
7.11 | This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart. Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument. |
EXECUTED by the parties:
|
| | |
Signed for | ) | |
and on behalf of | ) | |
ALTRIA GROUP, INC. | ) | |
| | /s/ William F. Gifford Jr. |
| | Signature |
| | William F. Gifford Jr. |
| | Print name |
| | Chief Financial Officer |
| | Office held |
| | |
[Signature Page to Tax Matters Agreement - Altria]
|
| | |
Signed for | ) | |
and on behalf of | ) | |
ABI | ) | |
| | /s/ MARIA FERNANDA ROCHA BARROS |
| | Signature |
| | MARIA FERNANDA ROCHA BARROS |
| | Print name |
| | AUTHORIZED SIGNATORY |
| | Office held |
| | |
| | /s/ JAN VANDERMEERSCH |
| | Signature |
| | JAN VANDERMEERSCH |
| | Print name |
| | AUTHORIZED SIGNATORY |
| | Office held |
[Signature Page to Tax Matters Agreement - AB InBev]
Exhibit A
The commercial reason for the incorporation of NewCo as a Belgian incorporated and tax resident company is to facilitate the merger of ABI with SABMiller.
Specifically, the contribution of SABMiller from the UK into Belgium (viewed from a US Federal income Tax perspective) facilitates a same-country merger of ABI into NewCo rather than a UK/Belgian cross-border merger of ABI into SABMiller or SABMiller into ABI.
ABI has been advised that a merger of a UK company into a Belgian company in a cross-border merger is significantly more complex from a corporate law perspective than a domestic Belgian law merger and would be challenging, time consuming and complex to achieve.
A UK public takeover governed by the City Code on Takeovers and Mergers has never been implemented through a European cross border merger structure.
In addition, with a cross-border merger of a UK company into a Belgian company, it likely would not be possible to obtain the appropriate level of certainty that the merger would not have adverse UK corporation tax consequences.
Further, ABI has been advised that a merger of a Belgian company into a UK company in a cross-border merger raises potentially significant capital gains and/or deemed dividend exposures under Belgian tax law in the absence of an upfront tax ruling with the Belgian Tax Authorities.
Exhibit B
2.1.5 No stock or securities of NewCo will be issued (or deemed issued) for services rendered to or for the benefit of NewCo in connection with the Transaction.
2.1.6 No stock or securities of NewCo will be issued (or deemed issued) for indebtedness of NewCo that is not evidenced by a security or for interest on indebtedness of NewCo that will have accrued on or after the beginning of the applicable transferor’s holding period for the debt.
2.1.7 There is no plan or intention for NewCo to redeem or otherwise reacquire any NewCo shares issued in the Transaction, other than the Initial Shares issued to SABMiller Shareholders that will be acquired by ABI in the Belgium Offer and cancelled in the Belgian Merger. For the avoidance of doubt, NewCo may (i) purchase any SABMiller Shares issued, allotted or transferred by SABMiller in satisfaction of any options or stock appreciation rights granted under the SABMiller Share Option Plans that first become exercisable after Completion and (ii) decide in the future to repurchase New Ordinary Shares pursuant to a stock buyback program.
2.1.8 The UK Scheme, the Belgian Offer and the Belgian Merger will occur under a plan agreed upon before the Transaction in which the rights of the parties are defined.
2.1.9 Immediately before the Belgian Merger, the fair market value of the assets of ABI will exceed the liabilities of ABI to be assumed by NewCo.
2.1.10 None of SABMiller, ABI or NewCo will be under the jurisdiction of a court in a title 11 or similar case (within the meaning of Section 368(a)(3)(A) of the Code), and the NewCo stock or securities issued in the Transaction will not be used to satisfy indebtedness of any such party.
2.1.11 The Belgian Offer will close as soon as practicable (but at least one Business Day) after the UK Scheme Effective Date, and the Belgian Merger will be completed as soon as practicable after the Belgian Offer closes.
2.1.12 There is no plan or intention for NewCo to cease its corporate existence. There is no plan or intention for NewCo to dispose of the assets of ABI acquired in the Belgian Merger or the SABMiller Shares acquired in the UK Scheme, other than, in the case of ABI assets, (i) in the ordinary course of business, (ii) in satisfaction of the Conditions or (iii) as part of an internal restructuring within ABI.
2.1.13 NewCo will not be an investment company within the meaning of Section 351(e)(1) of the Code and Treasury Regulations Section 1.351-1(c)(1)(ii) at or prior to Completion.
2.1.14 NewCo will not be a “personal service corporation” within the meaning of Section 269A of the Code at or prior to Completion.
2.1.15 At Completion, the only classes of stock of NewCo will be Restricted Shares and New Ordinary Shares. At Completion, there is no plan or intention in connection with the Transaction for NewCo to issue additional shares of NewCo stock, other than issuances of New Ordinary Shares as equity compensation.
2.1.16 Neither ABI nor any ABI Affiliate will take any position that the Transaction fails to qualify as a tax-free contribution under Section 351 of the Code.
2.1.17 Neither ABI nor any ABI Affiliate is aware of any plan or intention of any ABI Shareholder to dispose of any New Ordinary Shares outside of ordinary market trading that, when combined with ordinary market trading, would result in a disposal of more than twenty percent by vote of the stock of NewCo.
2.1.18
Side Letter
The Stichting Anheuser-Busch InBev, a foundation (stichting) duly incorporated and validly existing under the laws of the Netherlands, (the “AK”), represents that, as of Completion, AK has no plan or intention to dispose of New Ordinary Shares. 1
2.1.19 [Reserved]
2.1.20 [Reserved]
2.1.21 [Reserved]
2.1.22 [Reserved]
2.1.23 [Reserved]
2.1.24 [Reserved]
_____________________________
1 All capitalized terms that are undefined herein have the meaning ascribed in the 2.7 Announcement.
Exhibit C
In the event a Section 351 contribution has been agreed pursuant to clause 2.4, the parties expect to make the following changes to this Agreement:
| |
1. | The words in prong (iv) shall be deleted from the definition of “Reorganization” and replaced with “the Belgian Merger”; |
| |
2. | In clause 2.1, the words “at the date of this Agreement and again” shall be replaced with “at the date of this Agreement with respect to clauses 2.1.1 through 2.1.4 and again”; |
| |
3. | Clauses 2.1.5 through 2.1.24 shall be deleted and replaced with Exhibit B; |
| |
4. | Clause 2.1.31 shall be amended to eliminate references to any dates that have already passed; |
| |
5. | Any certificates previously delivered pursuant to clause 2.1.31 shall have no further force and effect except insofar as such certificates relate to the Recapitalization; |
| |
6. | Clauses 2.1.32 and 2.1.33 shall be deleted; |
| |
7. | The language in clause 2.3 shall be deleted and replaced with “[Reserved]”; |
| |
8. | In clause 3.1, the words “Reorganization or Recapitalization as tax-free reorganizations” shall be replaced with “Initial Share Issuance, together with the Belgian Merger, as qualifying for non-recognition of gain and loss under Section 351 of the Code or the Recapitalization as a tax-free reorganization”; |
| |
9. | In clause 3.2, the words following “incur a Tax pursuant to” shall be deleted and replaced with “Treasury Regulation Section 1.367(a)-8 as a result of any 351 GRA”. |
| |
10. | In clause 3.3, prongs (i) and (ii) shall be deleted and replaced with “would reasonably be expected to (i) cause Altria to incur a Tax under any 351 GRA or (ii) require Altria to enter into a new 351 GRA.”; |
| |
11. | The text in clause 3.4.1 shall be deleted and replaced with the following: “Altria shall enter into a Gain Recognition Agreement with respect to the Initial Share Issuance. If ABI makes a timely request in writing, Altria will enter into a Gain Recognition Agreement with respect to any action or transaction taken after Completion by ABI or any ABI Affiliate, including on a protective basis. All Gain Recognition Agreements described in this clause 3.4 shall be referred to as “351 GRAs”.”; |
| |
12. | Clause 3.4.2 shall be deleted. |
| |
13. | In clause 4.1.1(a), the words “Reorganization to qualify as a reorganization within the meaning of Section 368(a)(1)(F)” shall be deleted and replaced with “Initial Share Issuance, together with the Belgian Merger, to qualify for non-recognition of gain and loss under Section 351”; |
| |
14. | In clause 4.1.1(c), prongs (i) and (ii), and the words “in each case” following prong (ii) shall be deleted and replaced with the words “of Treasury Regulation Section 1.367(a)-8 as a result of any 351 GRA”; |
| |
15. | The text in clause 4.2.3 shall be deleted and replaced with the following: “If Altria fails to enter into a 351 GRA (including a replacement 351 GRA if Altria receives timely notification from ABI to file such replacement 351 GRA) in violation of clause 3.4, ABI shall have no obligation to indemnify Altria under clause 4.1 for any Tax that Altria incurs as a result of such failure.”; |
| |
16. | The text in clause 4.2.4 shall be deleted and replaced with “[Reserved]”; |
| |
17. | In clause 5.1.1, prong (i) of the flush language shall be replaced with “determining whether a 351 GRA (including any replacement 351 GRA) should be filed”; |
| |
18. | Clause 5.2.1(e) shall be replaced with “discussing integration transactions with respect to Treasury Regulation Section 1.367(a)-8; and”; and |
| |
19. | Clause 5.2.1(f) shall be replaced with “reviewing the requirements of Treasury Regulation Section 1.367(a)-8 with respect to any 351 GRA.”. |
| |
20. | Exhibits B and C shall be deleted. |
EXECUTION VERSION
ANHEUSER-BUSCH INBEV SA/NV
- and -
ALTRIA GROUP, INC.
INFORMATION RIGHTS AGREEMENT
DATED NOVEMBER 11, 2015
LONDON:520311.4A
W/2571021
CONTENTS
PAGE NO.
1. INTERPRETATION ...........................................................................................................1
2. REPRESENTATIONS AND WARRANTIES ..................................................................... 2
3. ARTICLES OF ASSOCIATION ......................................................................................... 3
4. INFORMATION ................................................................................................................. 3
5. CONFIDENTIALITY ......................................................................................................... 6
6. CHANGE OF LAW ............................................................................................................. 7
7. DURATION ........................................................................................................................ 7
8. SEVERANCE ..................................................................................................................... 8
9. FURTHER ASSURANCE .................................................................................................. 8
10. ENTIRE AGREEMENT ..................................................................................................... 8
11. COSTS ................................................................................................................................ 9
12. GENERAL .......................................................................................................................... 9
13. NOTICES .......................................................................................................................... 10
14. GOVERNING LAW AND JURISDICTION ..................................................................... 12
15. THIRD PARTY RIGHTS .................................................................................................. 12
16. COUNTERPARTS ............................................................................................................ 12
SCHEDULE
1. DEFINITIONS .................................................................................................................. 13
INFORMATION RIGHTS AGREEMENT
THIS AGREEMENT is made the 11th day of November, 2015.
BETWEEN:
| |
(1) | Anheuser-Busch InBev SA/NV (and any successor thereto, the “Company”); and |
| |
(2) | Altria Group, Inc., a Virginia corporation whose principal place of business is at 6601 West Broad Street, Richmond, Virginia 23230, United States of America (“Altria”). |
WHEREAS:
| |
A. | On the date hereof, the Company and SABMiller plc, a company incorporated under the laws of England and Wales (“SABMiller”) announced a proposed business combination involving the Company and SABMiller pursuant to a transaction governed by the United Kingdom City Code on Takeovers and Mergers (the “Transaction”). |
| |
B. | Altria’s interest in SABMiller represents, and it is anticipated that Altria’s interest in Company will continue to represent, a material percentage of Altria’s assets, earnings and cash flows such that it is necessary, from time to time, for Altria to obtain from the Company certain non-public information in order to satisfy Altria’s obligations and duties in connection with financial reporting, financial controls and financial planning (the “Financial Reporting and Planning Requirements”). |
| |
C. | The rights and obligations of the parties set out in this Agreement are provided solely in mutual consideration thereof. |
OPERATIVE TERMS:
The Company and Altria AGREE as follows:
| |
1.1 | In this Agreement, its recitals and schedule, unless the context otherwise requires, the terms set out in schedule 1 shall have the meanings given in schedule 1. |
| |
1.2 | In this Agreement, its recitals and schedule, unless indicated to the contrary: |
| |
(a) | a reference to a clause or schedule is a reference to a clause of or schedule to this Agreement; |
| |
(b) | a reference to a document is a reference to that document as from time to time supplemented or varied; |
| |
(c) | the recitals and schedule form an integral part of this Agreement; |
| |
(d) | the headings in this Agreement are for convenience only and shall not affect the interpretation of this Agreement; |
| |
(e) | a reference to a provision of law or applicable regulation shall be construed so as to include a reference to any provision which from time to time, before the date of this Agreement, modified, re-enacted, amended, extended, consolidated or replaced that provision and any subordinate legislation made under any such provision before the date of this Agreement; |
| |
(f) | words denoting the singular number shall include the plural, the masculine gender shall include the feminine gender and the neuter, and vice versa; |
| |
(g) | a reference to a calendar quarter shall mean each three month period ended 31 March, 30 June, 30 September and 31 December; |
| |
(h) | a reference to a calendar year shall mean each twelve month period ended 31 December; |
| |
(i) | a reference to financial period shall mean each calendar quarter and each calendar year; and |
| |
(j) | references to times of the day are to New York City time. |
| |
2. | REPRESENTATIONS AND WARRANTIES |
Each party represents, warrants and undertakes to the other party, as of the date of this Agreement, that:
| |
(a) | it is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation; |
| |
(b) | it has full power and authority to execute and deliver this Agreement and to carry out the transactions contemplated by this Agreement, and the execution, delivery and performance by it of this Agreement and the consummation by it of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action; |
| |
(c) | the obligations expressed to be undertaken by it under this Agreement are legal, valid and binding upon it except that the validity, binding effect and enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and subject to general principles of equity, regardless of whether considered in a proceeding at law or in equity; and |
| |
(d) | the execution and delivery of this Agreement by it and compliance by it with the provisions of this Agreement will not violate, result in any breach of, constitute a default under or require a consent or waiver under its certificate of incorporation, articles of incorporation, bylaws or memorandum and articles of association, agreements or arrangements, as the case may be, or under any decree, judgment, order, statute, legal principle, rule or regulation applicable to it. |
| |
3. | ARTICLES OF ASSOCIATION |
After Completion, except as required by the Act or other applicable law, the Company shall not propose any amendment to the Articles which would be inconsistent with, or in violation of, any of the provisions of this Agreement.
| |
4.1 | For so long as, in respect of any financial period, Altria accounts for its interest in the Company after Completion using the equity method, Altria shall have the right to receive (in order to satisfy its obligations and duties pursuant to its Financial Reporting and Planning Requirements) copies of the following from the Company for such financial period, within the time frames indicated: |
| |
(a) | monthly, unaudited, internal income reports for the Company prepared in accordance with IFRS for distribution to the Board, within 15 Business Days of the end of each calendar month (such internal reports shall be in the form presented to the Board from time to time, which as of the date of this agreement include information regarding geography, volume, revenue, sales and EBITDA); |
| |
(b) | within 60 calendar days of the end of each calendar quarter, an analysis of shares outstanding (economic and voting interest) at the end of the quarter, including a roll forward (total dollars and shares) of all share-related activity, such as share issuances, repurchases of ordinary shares and share-based payments, and the weighted average number of shares outstanding used in the calculation of basic and diluted earnings per share for the quarterly and year-to-date periods then ended, in each case prepared in accordance with IFRS (with a reconciliation of adjustments to US GAAP); |
| |
(c) | quarterly, final income statement and balance sheet prepared in accordance with IFRS, together with a list of reconciling items to US GAAP including a detail of all non-recurring items on a pre-tax and after-tax basis (as determined by the Company) recorded for the period within 60 calendar days of the end of each calendar quarter, including a roll forward of components of equity attributable to equity holders, as well as components of other comprehensive earnings attributable to equity holders, prepared in accordance with IFRS (and adjusted for identified differences to US GAAP); |
| |
(d) | annually, unaudited, summarized balance sheet (at September 30) and income statement information attributable to equity holders (for the 12 months ended September 30) prepared in accordance with IFRS (and adjusted for identified differences to US GAAP), within 60 calendar days after September 30; |
| |
(e) | financial statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, within 120 days following the end of each calendar year for any year in which Altria is required to present Company financial statements pursuant to Rule 3-09(“Rule 3-09”) of Regulation S-X as promulgated by the United States Securities |
and Exchange Commission (“SEC”), which financial statements shall be audited only (performed under auditing standards generally accepted in the United States) to the extent required by Rule 3‑09;
| |
(f) | the annual operating budget and three-year plan by geography, prepared in accordance with IFRS for approval by the Board from time to time (which budgets and plans currently include a detail of income metrics prepared on a normalized basis), including a detail of all non-recurring items on a pre-tax and after-tax basis to the extent included within the annual budget, and any revisions to the annual budget or three-year plan throughout the year, in each case within five Business Days of its approval by the Board; |
| |
(g) | monthly phasing of the annual operating budget for profit attributable to equity holders of the Company in accordance with IFRS, including (i) a monthly phasing of all non-recurring items on a pre-tax and after-tax basis; (ii) quarterly phasing of material budgeted US GAAP adjustments to the IFRS budgeted amounts on a consolidated basis, in conjunction with the receipt of the annual operating budget; and (iii) revisions to the latest estimates of the results up to normalized EBITDA (when provided to the Board); |
| |
(h) | from time to time, information as is reasonably required and requested by Altria in order to allocate and analyze certain basis differences that exist between the carrying value of Altria's investment in the Company and Altria's share of the Company’s net assets; |
| |
(i) | notice and a description of any business arrangements between any Group member on the one hand and Altria or any of its Affiliates on the other hand, in order to comply with any applicable related-party disclosure requirement at such times reasonably requested by Altria; |
| |
(j) | within 25 calendar days of the end of each calendar quarter, a discussion with the Company’s controller (or another person with similar responsibilities reasonably acceptable to Altria) regarding updates to the Company’s business and results, if any, necessary to assist Altria in complying with the requirements of its equity method accounting for its investment in the Company; and |
| |
(k) | such other information as is required by Altria for accounting or other regulatory purposes at such times reasonably requested by Altria including, without limitation, the information required under Rule 3-05 (financial statements of businesses acquired or to be acquired) and Article 11 (pro forma financial information) of Regulation S-X, as promulgated by the SEC (it being understood that such other information shall be in the form reasonably determined by Company management to be appropriate in the circumstances taking into account the purpose for which Altria requires the information). |
| |
4.2 | Each of the Altria Nominated Directors may communicate, subject to any applicable fiduciary duties under the laws of jurisdiction of incorporation of the Company, any |
information acquired by him or her in relation to the Company or the Group to Altria or any Affiliate (as the case may be) subject always to the duty of confidentiality contained in clause 5.
| |
4.3 | Altria will not publish or otherwise publicly disclose any non-public information received under this clause 4 (for so long as such information shall remain non-public (or becomes public only as a result of a breach of this Agreement), the “Confidential Information”) without the Company’s prior written approval, provided however, that: |
| |
(a) | in respect of any financial period, after publication by the Company of its results in respect of such financial period, Altria may publish only such final Confidential Information in respect of such financial period (and no future financial period) as is required to satisfy Altria’s reporting requirements under US GAAP that result from Altria accounting for its interest in the Company using the equity method; and |
| |
(b) | in the event that Altria becomes aware that it may reasonably expect to be required to publish additional Confidential Information pursuant to one or more Financial Reporting and Planning Requirements, it shall give the Company prompt notice thereof and shall consult with the Company, which shall engage promptly with Altria to discuss. If, following such consultation, Altria determines, acting reasonably, it is required to publish such Confidential Information under such Financial Reporting and Planning Requirements, Altria may publish only such Confidential Information necessary to comply with such requirements and (to the extent legally permitted under such Financial Reporting and Planning Requirements) shall, upon request from the Company, delay such publication until after the Company has published such Confidential Information. |
| |
4.4 | Altria acknowledges that information disclosed to it under this clause 4 may be unpublished price sensitive or inside information and undertakes that the Altria Group shall comply with the requirements of any applicable laws, rules and regulations in relation to any dealings by the Altria Group in the Relevant Securities. In addition, Altria undertakes to procure that information disclosed under this clause 4 is not used in any manner which would be prejudicial to the business of the Group. This clause 4.4 shall continue to apply to Altria without limit in time. |
| |
4.5 | Nothing in this Agreement shall be deemed to affect in any manner any obligations of the Company or Altria under any applicable laws, including securities laws, market abuse or insider dealing laws, rules or regulations or any binding directions by the competent securities market regulator (“Laws”), and obligations of each of the Company and Altria under this Agreement shall be subject to, and neither party shall be in breach of this Agreement if it determines, acting reasonably and in good faith, that complying with any provision of this Agreement would violate such Laws; provided that each party shall use its best efforts to notify and consult with the other party prior to taking any action in reliance on this Section 4.5 that would otherwise be a breach of this Agreement. |
| |
4.6 | Altria acknowledges that, in light of the difficulty in integrating the financial reporting systems of SABMiller and the Company, for one year following Completion, any delay in the Company delivering the Confidential Information required by Clause 4.1 will not result in a breach of this agreement by the Company, provided it uses its commercially reasonable efforts to deliver such Confidential Information as soon as is reasonably practicable and provided, further, that such Confidential Information is delivered within 15 calendar days of the applicable date required under Clause 4.1. |
| |
4.7 | To the extent that Altria determines, acting reasonably, that it is no longer necessary for it to receive copies of any items of information listed under clause 4.1 in order to satisfy its obligations under any Financial Reporting and Planning Requirements, Altria promptly shall notify the Company in writing, which notice shall relieve the Company of the obligation to provide such items. |
| |
5.1 | Altria shall (subject the remainder of this clause 5) treat and keep, and shall procure that its Affiliates and its and their respective directors, officers, employees and agents shall treat and keep, as strictly confidential the Confidential Information. |
| |
5.2 | Altria shall be entitled to disclose Confidential Information solely in the manner described in clauses 4.3 or 5.3 and: |
| |
(a) | to any of its directors, officers, employees, auditors, credit rating agencies and legal counsel, whose position makes it necessary or desirable to know that Confidential Information in order to assist Altria with its Financial Reporting and Planning Requirements; |
| |
(b) | with the consent of the Board (each recipient of Confidential Information pursuant to clause 5.2(a)-(b) being an “Authorized Recipient”), |
provided that Altria shall:
| |
(a) | warn each Authorized Recipient that the disclosed information is confidential and may be unpublished price sensitive or inside information; |
| |
(b) | inform each Authorized Recipient of the confidentiality provisions contained herein and take reasonable steps to procure that such Authorized Recipient complies with the terms of such provisions as if it were a party hereto; and |
| |
(c) | maintain a list of the names of all Authorized Recipients and, promptly upon written request from the Company, supply a copy of such list to the Company. |
| |
5.3 | Altria shall further be entitled to disclose the Confidential Information to the extent Altria is required to do so by applicable law or regulation, any order of a court of competent jurisdiction or any competent governmental, judicial or regulatory authority or body; provided that Altria shall provide the Company, in advance of any such disclosure, with a list of any Confidential Information it intends to disclose (and, if applicable, the text of |
the disclosure language itself) and to cooperate with the Company to the extent the Company may seek to limit such disclosure. Altria will limit such disclosure to that which is legally required and will use reasonable efforts to obtain assurances that confidential treatment will be accorded to any such Confidential Information that Altria is so required to disclose, and thereafter Altria may disclose such information without liability hereunder.
| |
5.4 | The Company shall treat and keep, and shall procure that its Group members and its and their respective directors, officers, employees and agents shall treat and keep, as strictly confidential all information of a confidential nature relating to Altria communicated to it pursuant to clause 7.3. |
| |
5.5 | Each of the parties confirms its intention that any significant announcement to be made by it referring to the other party shall be discussed with the other party before being made, save in exceptional circumstances. |
| |
6.1 | If there is any change in law or applicable regulations which would materially affect the operation of this Agreement or prohibit or prevent the Company from complying with its obligations under clause 4.1, the parties agree to enter into bona fide negotiations with a view to agreeing such amendments to this Agreement (to the extent legally possible) as the parties shall in good faith determine to be necessary to comply with such changes and to ensure that, notwithstanding such changes, the commercial intentions of each, as reflected by the provisions of this Agreement, are given effect to. |
| |
6.2 | The parties acknowledge and agree that clause 6.1 is fully binding in honor and not an agreement to negotiate, such that any invalidity or unenforceability of clause 6.1 shall not result in the invalidity or unenforceability of any other provision of this Agreement. |
| |
7.1 | All rights and obligations of the parties under this Agreement shall be conditioned upon Completion occurring. This Agreement shall terminate automatically if the Transaction has been withdrawn or lapsed or if the Co-operation Agreement is terminated in accordance with its terms. |
| |
7.2 | From Completion, this Agreement shall continue in full force and effect for so long as Altria continues to account for its interest in the Company using the equity method. |
| |
7.3 | If, at any time, Altria ceases to account for its interest in the Company using the equity method, this Agreement shall terminate and cease to be of any effect other than clauses 4.4, 5 and 11 through 16, save that this shall not relieve either party from any liability or obligation in respect of any matters, undertakings or conditions which shall not have been done, observed or performed by that party prior to such termination. |
| |
7.4 | Altria undertakes to the Company to notify the Company if, as a result of any change in the holding of Relevant Securities by Altria or any Affiliate or for any other reason, |
Altria expects that it will cease to account for its interest in the Company using the equity method, provided that any failure to so notify that does not prejudice the Company and is promptly remedied shall not constitute a breach of this Agreement.
| |
8.1 | If any provision of this Agreement is held to be invalid or unenforceable, then such provision shall (so far as it is invalid or unenforceable) be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement. |
| |
8.2 | In the event that any provision of this Agreement becomes wholly or partly void, unenforceable or for any other reason cannot in whole or in part be put into effect, including as a result of a Law, then the remaining provisions of this Agreement shall not be affected. In such an event, the parties shall cooperate and negotiate in good faith to agree provisions (to replace those which are void, unenforceable or ineffective) which are not void or unenforceable, or which can otherwise be put into effect and which, as far as possible, are legally and commercially the same as those they replace. |
| |
8.3 | In the event that provisions of this Agreement need to be interpreted or supplemented, then the interpretation or supplement shall be completed in good faith in such a way that the spirit, contents and purpose of this Agreement are adhered to as far as possible. |
Each party shall do and execute or procure to be done and executed all necessary acts, deeds, documents and things as may be reasonably necessary to give effect to this Agreement.
| |
10.1 | This Agreement contains the entire agreement and understanding of the parties and supersedes all prior agreements, understandings or arrangements (both oral or written) relating to the subject matter of this Agreement, and, subject to any mandatory provisions of the Act or any other applicable legislation or the Articles. |
| |
10.2 | Each of the parties acknowledges that: |
| |
(a) | it does not enter into this Agreement on the basis of and does not rely, and has not relied, upon any statement or representation (whether negligent or innocent) or warranty or other provision (in any case whether oral, written, express or implied) made or agreed to by any person (whether a party to this Agreement or not) except those expressly repeated or referred to in this Agreement and the only remedy or remedies available in respect of any misrepresentation or untrue statement made to it shall be a claim for breach of contract under this Agreement; and |
| |
(b) | this clause 10.2 shall not apply to any statement, representation or warranty made fraudulently, or to any provision of this Agreement which was induced by fraud, for which the remedies available shall be all those available under the law governing this Agreement. |
| |
10.3 | No amendment of any of the terms of this Agreement (or of any other documents referred to herein) shall be effective unless it is in writing and signed by or on behalf of each of the parties hereto. |
Each party shall pay its own costs relating to the negotiation, preparation, execution and performance by it of this Agreement and of each document referred to in it, provided however, that Altria shall promptly pay the out-of-pocket costs and expenses (including reasonable costs and expenses of any external advisors engaged with the prior written approval of Altria (not to be unreasonably withheld) to assist the Company in complying with its obligations under clause 4 of this Agreement) incurred by the Company in the preparation of any item of Confidential Information that the Company determines, acting reasonably, is only being prepared in order to satisfy the Company’s obligations under this Agreement (including any information prepared in accordance with US GAAP or the reconciliation thereto).
| |
12.1 | This Agreement shall be binding on and inure to the benefit of each party’s successors in title or assigns; provided, however, that, subject to clause 12.8 below, neither party shall assign or in any other way dispose of any of its rights or obligations under this Agreement without the prior written consent of the other. |
| |
12.2 | Altria shall be liable for all of the obligations and liabilities of all Affiliates under this Agreement. The Company shall be liable for all of the obligations and liabilities of the other Group members under this Agreement. |
| |
12.3 | This Agreement shall not be construed as creating any partnership or agency relationship (except to the extent expressly described) between either of the parties. |
| |
12.4 | No relaxation, forbearance, indulgence or delay (together “indulgence”) of either party in exercising any right shall be construed as a waiver of the right and shall not affect the ability of that party subsequently to exercise that right or to pursue any remedy, nor shall any indulgence constitute a waiver of any other right. |
| |
12.5 | The parties agree that each party would be irreparably damaged if either party failed to perform any obligation under this Agreement, and that such party would not have an adequate remedy at law for money damages in such event. Accordingly, each party shall be entitled to specific performance and injunctive and other equitable relief to enforce the performance of this Agreement. This clause 12.5 is without prejudice to any other rights that such party may have under this Agreement, at law or in equity. |
| |
12.6 | The rights and remedies contained in this Agreement are, unless otherwise expressed, cumulative and not exclusive of rights or remedies provided by law. |
| |
12.7 | Each date, time or period referred to in this Agreement is of the essence. If the parties agree in writing to vary a date, time or period, the varied date, time or period is of the essence. |
| |
12.8 | Each of the parties agrees and acknowledges that, upon completion of the Belgian Merger (as defined in the 2.7 Announcement), all of the rights and obligations of Anheuser-Busch InBev SA/NV under this Agreement shall be assumed by Newco, by operation of Belgian law. |
| |
13.1 | Any notice or other communication to be given under this Agreement shall be in writing and shall be deemed to have been duly served on, given to or made in relation to a party if it is left at the authorized address of that party (as set out in clause 13.2) or posted by registered post addressed to that party at such address or sent by email or facsimile transmission to a machine situated at such address and shall if: |
| |
(a) | personally delivered, be deemed to have been received at the time of delivery; |
| |
(b) | posted, be deemed to have been received on the fifth Business Day after the date of posting; or |
| |
(c) | sent by email or facsimile transmission, be deemed to have been received upon receipt by the sender of a confirmatory email, facsimile transmission report (or other appropriate evidence) that the email or facsimile, as the case may be, has been transmitted to the addressee, |
provided that where, in the case of delivery by hand or email or facsimile transmission, delivery or transmission occurs after 6.00 pm on a Business Day or on a day which is not a Business Day, receipt shall be deemed to occur at 9.00 am on the next following Business Day.
| |
13.2 | For the purposes of this clause 13, the authorized address of each party shall be the address set out below (including the details of the facsimile number and person for whose attention a notice or communication is to be addressed) or such other address (and details) as that party may notify to the other in writing from time to time in accordance with the requirements of clause 13.3: |
| |
Address: | c/o Anheuser-Busch InBev |
Brouwerijplein 1
Leuven 3000
Belgium
Facsimile no: +32 1650 6699
Attention: VP Corporate Governance & VP Control & Tax
Email benoit.loore@ab-inbev.com and
ann.randon@ab-inbev.com
| |
with a copy to: | Sullivan & Cromwell LLP |
| |
Address: | 1 New Fetter Lane |
London
EC4A 1AN, UK
| |
Facsimile no: | +44 20 7959 8950 |
| |
Email: | whiteg@sullcrom.com and |
horsfieldbradburyj@sullcrom.com
| |
Attention: | George H. White and John Horsfield-Bradbury |
| |
Address: | 6601 West Broad Street |
Richmond
VA 23230
United States of America
| |
Facsimile no: | +1 804 484 8265 |
| |
Email: | Denise.Keane@altria.com |
| |
Attention: | General Counsel |
| |
with a copy to: | Wachtell, Lipton, Rosen & Katz |
| |
Address: | 51 West 52nd Street |
New York, NY 10019
USA
| |
Facsimile no: | +1 212 403 2000 |
| |
Email: | AJNussbaum@wlrk.com |
| |
Attention: | Andrew J. Nussbaum |
| |
13.3 | A party may notify the other of a change to its name, relevant addressee, address or facsimile number for the purposes of clause 13.2, provided that such notification shall only be effective on: |
| |
(a) | the date specified in the notification as the date on which the change is to take place; or |
| |
(b) | if no date is specified or the date specified is less than five clear Business Days after the date on which notice is given, the date falling five clear Business Days after notice of any such change has been given. |
| |
14. | GOVERNING LAW AND JURISDICTION |
| |
14.1 | This Agreement (together with all documents referred to herein and together with any documents entered into pursuant to this Agreement which are not expressed to be governed by another law) shall be governed by and construed and take effect in accordance with New York law. |
| |
14.2 | The federal courts in the United States District Court for the Southern District of New York (and appellate courts thereof) shall have exclusive jurisdiction to determine any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity hereof (or, if such court shall not have jurisdiction, the Supreme Court of the State of New York, County of New York). |
This Agreement is not intended to, and does not, confer upon any person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein
| |
16.1 | This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart. |
| |
16.2 | Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument. |
SCHEDULE 1
Definitions
|
| |
“2.7 Announcement” | means the announcement issued by the Company and SABMiller on the date hereof under Rule 2.7 of the United Kingdom City Code on Takeovers and Mergers; |
| |
“Act” | means the Belgian Company Code; |
| |
“Affiliate” | means, in relation to Altria, a person that directly or indirectly controls, is controlled by, or is under common control with, Altria and, for the purposes of this definition, “control”, when used with respect to any person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and, for the avoidance of doubt, the Company shall not be deemed to be an Affiliate of Altria; |
| |
“Altria” | has the meaning first above given; |
| |
“Altria Group” | means Altria and its Affiliates; |
| |
“Altria Nominated Director” | means a Director nominated to the Board at the request of Altria in accordance with the Articles; |
| |
“Articles” | means the articles of association of Newco as they may be amended from time to time; |
| |
“Board” | means the board of directors of Newco as constituted from time to time; |
| |
“Business Day” | means any day which is not a Saturday or Sunday or a day on which banks are authorized or required to close in Brussels, Belgium or New York City, United States of America; |
| |
“Completion” | has the meaning given in the 2.7 Announcement; |
| |
“Company” | has the meaning first above given; |
| |
“Co-operation Agreement” | has the meaning given in the 2.7 Announcement; |
| |
“Confidential Information” | has the meaning given in clause 4.3; |
| |
“Director” | means a director of Newco; |
| |
“dispose” | means to confer legal or beneficial title on another person or otherwise dispose of or enter into an agreement to confer legal or |
|
| |
| beneficial title on another person or otherwise dispose of or enter into any arrangement (including, without limitation, the creation of any derivative) which would have substantially the same financial effect, and “disposal” shall be construed accordingly; |
| |
“Financial Reporting and Planning Requirements” | has the meaning given in the recitals; |
| |
“Group” | means the Company and its subsidiaries and “Group member” shall be construed accordingly; |
| |
“IFRS” | means the International Financial Reporting Standards as adopted by the European Union (or to the extent adopted by the Company in the preparation of its financial results, as issued by the International Accounting Standards Board); |
| |
“indulgence” | has the meaning given in clause 12.4; |
| |
“Laws” | has the meaning given in clause 4.5. |
| |
“Newco” | means Newco, a Belgian limited liability company to be formed for the purposes of the Transaction, further details of which are set out in paragraph 10 and Appendix 6 of the 2.7 Announcement; |
| |
“person” | shall be construed so as to include any individual, firm, company, government, state or agency of a state, local or municipal authority or governmental body or any trust, joint venture, association, partnership or other organization of any nature (in each case, whether or not having separate legal personality), and that person’s legal personal representatives, successors and lawful assigns; |
| |
“Relevant Securities” | means any securities of Newco issued and outstanding from time to time (including its ordinary shares); |
| |
“Transaction” | has the meaning given in the recitals; |
| |
“US GAAP” | means the accounting principles generally accepted in the United States of America; |
| |
“SABMiller” | has the meaning given in the recitals; and |
| |
“SEC” | has the meaning given in clause 4.1. |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.
|
| | |
| ANHEUSER-BUSCH INBEV SA/NV |
| | |
| | |
| By: | /s/ MARIA FERNANDA ROCHA BARROS |
| | Name: MARIA FERNANDA ROCHA BARROS |
| | Title: GLOBAL LEGAL DIRECTOR |
| | AUTHORIZED SIGNATORY |
|
| | |
| By: | /s/ JAN VANDERMEERSCH |
| | Name: JAN VANDERMEERSCH |
| | Title: AUTHORIZED SIGNATORY |
[Signature Page to Information Rights Agreement - AB InBev]
|
| | |
| ALTRIA GROUP, INC. |
| | |
| | |
| By: | /s/ William F. Gifford Jr. |
| | Name: William F. Gifford Jr. |
| | Title: Chief Financial Officer |
[Signature Page to Information Rights Agreement - Altria]
Altria (NYSE:MO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Altria (NYSE:MO)
Historical Stock Chart
From Apr 2023 to Apr 2024
