InBev has acquired Alfa-Eco's holding in SUN Interbrew. The company announced late last week that it has reached an agreement with Alfa-Eco whereby it will acquire all of Alfa-Eco's holding of voting and non-voting shares in SUN Interbrew.

InBev is acquiring 6,065,930 voting and 1,654,269 non-voting shares in SUN Interbrew from Alfa-Eco and its affiliates for a cash consideration of €204.7m (US$275.5m). This equates to a price of €26.51 for each SUN Interbrew voting and non-voting share. In addition, Alfa-Eco and its affiliates will receive up to €55m in recognition of certain commitments being given to InBev by Alfa-Eco. Alfa-Eco will receive a total consideration of up to €259.7m.

On completion of this and the previously announced transaction with SUN Trade (International) Ltd, and taking into consideration market purchases, InBev will own 97.3% of the voting shares and 98.8% of the non-voting shares in SUN Interbrew, which in total will give it a 98.5% economic interest in SUN Interbrew.

Based upon InBev's share price of €28.75 as of the close of market on 30 December, the aggregate cost of InBev's total economic interest in SUN Interbrew, since its initial investment in SUN Interbrew in April 1999, will amount to approximately €1.2bn.

After adjusting for net debt and minority interests, this implies a multiple of 14.2x 2003 EBITDA or 10.5x EBITDA for the twelve months until 30 September 2004. InBev expects that up to €100m of the consideration of up to €259.7m will be recorded as a one-off charge in 2004. It is estimated that the earnings impact in 2005 of the combination of the Alfa-Eco and SUN Trade (International) Ltd transactions will remain mildly dilutive.

It is anticipated that this transaction and the acquisition of the SUN Trade (International) Ltd shares in SUN Interbrew announced by InBev, on 12 August 2004, will close at the same point during the first quarter of 2005. Completion of these transactions is subject to the customary conditions and approvals.