BELGIUM: No rush for A-B disposals - InBev
Following reports that InBev is seeking swift disposals, particulary of several Anheuser-owned theme parks, in order to reduce concerns about short-term funding for the takeover, a group spokesperson has sought to play down the speculation.
"As previously discussed, we are contemplating disposals of certain assets from both companies," an InBev spokesperson told just-drinks today (4 November).
"However, it is too early to comment at this stage on which businesses specifically would be considered."
She added that disposals would be based on a "diligent review of the strategic and financial consequences of any divestment". Anheuser (A-B) owns a number of theme parks on the periphery of its beer business, including SeaWorld and Busch Gardens.
Several observers have raised questions about InBev's financing of the A-B deal, in light of the near-unprecedented volatililty in global financial markets. Some have questioned whether the deal would be completed.
Financial market turmoil has forced InBev to suspend a rights issue, intended to supply short-term funding.
Trevor Stirling, analyst for the Bernstein group, said in a report today that, while the rights issue likely remained the preferred option for the company, early disposals may act as a back-up for extra funding.
"In our view, if investors were comfortable that the deal could in extremis be financed in the short-medium term by a combination of debt and disposals, it would remove a major drag from InBev's share."
He said that he still expected InBev to complete the A-B deal, and that InBev leadership remained committed. He also added: "After consulting M&A legal specialists, we perceive that the risks of litigation [as a result of not closing the deal] far outweigh the possible benefits to shareholders of InBev walking away."
A US$1.25bn break-up fee would only apply in very limited circumstances, said Stirling, while breaking the deal outside of such circumstances could cost InBev tens of $billions in litigation.
The deadline for both firms to close the deal is 19 March 2009. An InBev spokesperson told just-drinks today that the Belgium-based brewer still expects to complete the takeover by the end of 2008.
The top ten stories published on just-drinks this week:...
Anheuser-Busch InBev's Stella Artois lager is to become the official beer sponsor of the 2009 James Beard Foundation Media Awards....
Anheuser-Busch InBev has completed the sale of a 19.9% stake in Chinese brewer Tsingtao to Japan's Asahi for US$667m....
Anheuser-Busch InBev is in discussions with US television network NBC over its sponsorship of Olympics coverage, but the brewer has declined to comment on reports that it is to cut spending....
Anheuser-Busch InBev'S board of directors have approved a 2008 shareholder dividend of EUR0.28 (US$.35) per share, the brewer has announced....
Private equity group Kohlberg, Kravis Roberts has won the bidding battle for Anheuser-Busch InBev's Oriental Brewery in South Korea, according to a report....
Lotte Group has confirmed that it is no longer in the bidding race for Anheuser-Busch InBev subsidiary Oriental Brewery, according to a report....
Anheuser-Busch InBev is set to be the subject of an investigation into unfair practices against its suppliers in Belgium, according to local reports....
- Analysis - Will Diageo call time on wine?
- Why Didn't Diageo Act Sooner on Mallya?
- just The Facts - The Global Wine Industry
- Comment - A New Age of VR Marketing?
- Comment - Will the Sweetener Battle turn Sour?
- A-B InBev snaps up Bogotá Beer Co in Colombia
- Diageo considers wine operations sale
- NPD: Bacardi's Bacardi Carta Fuego
- A-B InBev approves new chairman
- Bacardi widens Craigellachie footprint to Asia
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Diageo Plc in Wine (World)
- Global rum insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- ALDI 2015: Radically transforming Anglo Saxon grocery markets