If the deal goes towards completion (expected in 2016) the senior managers at SABMiller will all get a share from $2.1 BN. Alan Clark, CEO of SABMiller himself will get approximately $ 65m. If the deal falls apart, which can be because of the regulatory interventions or hurdles cited by AB InBev Shareholder’s, the company will pay a break- free fee ($3bn) to SABMiller. Since both the businesses are spread across countries and would require approvals of a dozen of jurisdictions it will take approximately a year to complete the transaction. Since SABMiller is South Africa’s top listed company, the department of trade and industry will closely monitor the effects of the deal. They surely are interested in FDI coming in, but does not want a deal wherein the local producers would be affected.
The deal is beneficial for AB InBev because of the ubiquitous presence of SABMiller in emerging markets. For Example, AB InBev will be able to enter the African market where it presently has no mark.
Effect on the Indian beer Industry
United Breweries, makers of Kingfisher leads the Indian beer market (50%- market share), followed by SABMiller India (25%) and Carlsberg (10%). With AB InBev taking over SABMiller, it will have a stronger foothold in the Indian beer market as well.
In India currently AB InBev sells Budweiser, and SABMiller sells Haywards 5000, Blue Moon etc. AB InBev entered the Indian beer market with JV (49 AB InBev, 51 RJ Corp.) with Delhi-based RJ Corp. in 2007. The association, however, ended in February this year (2015) when AB InBev decided to take the full control of the Indian Beer Market.
References: FT.com, Reuters
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