Comment - A-B InBev defies the doubters
Yesterday's deal with Blackstone to sell off theme parks owned by Anheuser-Busch in the US yielded another cheque for US$2.7bn for the brewer's coffers.
Back in the immediate aftermath of InBev's $52bn buyout of A-B, the most expensive beer industry deal in history, questions were raised as to whether InBev could summon the necessary $7bn required to repay a bridge loan on the deal due in November 2009.
Some analysts were cautious when the new brewing behemoth said it needed $3.5bn from assets disposals to repay the loan.
However, it soon became clear that, with the brewer's hotshot accountants pressing ahead full-steam on cost savings from the deal, and with various refinancing options available, the loan repayment was unlikely to be a major issue.
In the end, A-B InBev did not need to make $7bn in assets disposals before November this year, as the firm has pointed out, but it has nearly got there anyway. Yesterday's deal, if approved, will take it to more than $6.5bn.
There was hardly a plethora of hungry mouths agape in the industry when A-B InBev began its disposals quest earlier this year.
Heineken and Carlsberg were busy digesting Scottish & Newcastle, while SABMiller, although with money, was showing little desire to spend it on acquisitions of the size A-B InBev had in mind.
The Japanese brewers had money and Asahi did swoop for a healthy proportion of A-B InBev's Tsingtao stake in China. Kirin, however, chose to go elsewhere - plumping for Lion Nathan and a near- 49% stake in San Miguel Brewery.
The biggest deals, the sale of Oriental Brewery for $2bn and the theme parks for $2.7bn, went to private equity, which tells its own story about the appetite of rival brewers.
It is also rather impressive given that the global financial markets faced a meltdown last autumn that was probably the worst since the Wall Street Crash of 1929, and had the potential to be even worse than that.
For better or for worse, and you can certainly find people who will argue for both sides, InBev has one of the most rigorous cost control policies in the beer business - if not in business generally.
Why did we ever doubt the company's ability? If only all comment pieces could be written with the benefit of hindsight, I hear you cry.
True enough, but this does not take away the scale of A-B InBev's fiscal achievement.
Sectors: Beer & cider
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