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AB InBev Fulfils SABMiller Buyout Terms with Distell Sale
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It’s not over yet for Anheuser-Busch InBev SA/NV (BUD - Free Report) , alias AB InBev, which is carrying the baggage of selling assets to satisfy the regulatory conditions for its recently concluded $100 billion buyout of SABMiller Plc. In this regard, the company signed its second assets sale deal recently, agreeing to sell SABMiller’s 26.4% stake in Distell Group Limited, a South African distiller of wine, spirits, and ciders to Africa’s largest pension administrator, the Public Investment Corporation (SOC) Limited.
While the agreed sale of the maker of Amarula liquor and Klipdrift brandy depends upon the approval from the South African antitrust authorities, Distell Group’s major stakeholders Remgro Limited and Capevin Holdings Limited have decided to not exercise their blocking rights in relation to the deal. These firms together hold about 53% stake in Distell Group.
On Dec 13, AB InBev signed another pact to fulfill the antitrust commitments as it agreed to sell some of SABMiller’s eastern European businesses to Japan’s Asahi Group Holdings, Ltd. for €7.3 billion (or US$7.8 billion).
Per the deal, AB InBev will dispose SABMiller’s businesses in five countries namely, Poland, Czech Republic, Slovakia, Hungary and Romania (termed as CEE Business), as was already promised to the European Commission. The sale which awaits an approval from the European Commission, includes leading beer brands like Pilsner Urquell, Kozel and Tyskie, is likely to close in the first half of 2017. (Read: AB InBev to Sell SABMiller's Eastern Europe Assets)
Apart from this, the company signed many other similar deals in various countries to win regulatory nod for the SABMiller buyout. The most prominent one in the lot is definitely the sale of SABMiller’s 58% stake in the MillerCoors LLC joint venture (JV) to Denver-based Molson Coors Brewing Company (TAP - Free Report) for $12 billion. This makes Molson Coors, which previously held a 42% stake in MillerCoors, the 100% stakeholder in the JV. Molson Coors now has full rights to all the brands in the MillerCoors portfolio for the U.S. market, including Redd’s and import brands such as Peroni and Pilsner Urquell.
However, we note that despite these divestitures the combined mega-brewing company still holds the top spot in the beer industry, controlling about one-thirds of the global beer market. This behemoth, which accounts for nearly 30% of global beer sales and 46% of global beer profits, leaves Heineken NV (HEINY - Free Report) trailing in the second spot, with only 11% share of the global beer market.
On the other hand, in the U.S., AB InBev retains its leading position with 44% share in the beer market, while Molson Coors has grown incredibly to become the second-largest brewer controlling about 25% market share.
While these iterations raise the optimism of investors, we note that shares of AB InBev have dropped nearly 17.6% year to date. Moreover, this Zacks Rank #5 (Strong Sell) stock has underperformed the Zacks categorized Beverages – Alcoholic industry which has witnessed a decline of 4.5% year to date.
Constellation Brands, with a long-term earnings growth rate of 18.9%, has surged nearly 10.8% year to date.
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Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
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AB InBev Fulfils SABMiller Buyout Terms with Distell Sale
It’s not over yet for Anheuser-Busch InBev SA/NV (BUD - Free Report) , alias AB InBev, which is carrying the baggage of selling assets to satisfy the regulatory conditions for its recently concluded $100 billion buyout of SABMiller Plc. In this regard, the company signed its second assets sale deal recently, agreeing to sell SABMiller’s 26.4% stake in Distell Group Limited, a South African distiller of wine, spirits, and ciders to Africa’s largest pension administrator, the Public Investment Corporation (SOC) Limited.
While the agreed sale of the maker of Amarula liquor and Klipdrift brandy depends upon the approval from the South African antitrust authorities, Distell Group’s major stakeholders Remgro Limited and Capevin Holdings Limited have decided to not exercise their blocking rights in relation to the deal. These firms together hold about 53% stake in Distell Group.
On Dec 13, AB InBev signed another pact to fulfill the antitrust commitments as it agreed to sell some of SABMiller’s eastern European businesses to Japan’s Asahi Group Holdings, Ltd. for €7.3 billion (or US$7.8 billion).
Per the deal, AB InBev will dispose SABMiller’s businesses in five countries namely, Poland, Czech Republic, Slovakia, Hungary and Romania (termed as CEE Business), as was already promised to the European Commission. The sale which awaits an approval from the European Commission, includes leading beer brands like Pilsner Urquell, Kozel and Tyskie, is likely to close in the first half of 2017. (Read: AB InBev to Sell SABMiller's Eastern Europe Assets)
Apart from this, the company signed many other similar deals in various countries to win regulatory nod for the SABMiller buyout. The most prominent one in the lot is definitely the sale of SABMiller’s 58% stake in the MillerCoors LLC joint venture (JV) to Denver-based Molson Coors Brewing Company (TAP - Free Report) for $12 billion. This makes Molson Coors, which previously held a 42% stake in MillerCoors, the 100% stakeholder in the JV. Molson Coors now has full rights to all the brands in the MillerCoors portfolio for the U.S. market, including Redd’s and import brands such as Peroni and Pilsner Urquell.
However, we note that despite these divestitures the combined mega-brewing company still holds the top spot in the beer industry, controlling about one-thirds of the global beer market. This behemoth, which accounts for nearly 30% of global beer sales and 46% of global beer profits, leaves Heineken NV (HEINY - Free Report) trailing in the second spot, with only 11% share of the global beer market.
On the other hand, in the U.S., AB InBev retains its leading position with 44% share in the beer market, while Molson Coors has grown incredibly to become the second-largest brewer controlling about 25% market share.
While these iterations raise the optimism of investors, we note that shares of AB InBev have dropped nearly 17.6% year to date. Moreover, this Zacks Rank #5 (Strong Sell) stock has underperformed the Zacks categorized Beverages – Alcoholic industry which has witnessed a decline of 4.5% year to date.
Key Pick
A better-ranked stock in the beverages – alcoholic industry is Constellation Brands Inc. (STZ - Free Report) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Constellation Brands, with a long-term earnings growth rate of 18.9%, has surged nearly 10.8% year to date.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>