With overtures of takeover by Anheuser-Busch inBev (ABInbev), SAB Miller plc’s Botswana investment – Sechaba Holdings Limited – held its Annual General Meeting (AGM) on September 24 to transact the usual company business. The takeover bid that proposes $250 billion mega deal was not part of the Agenda and if anything directors would have been merely alerted under the ‘For your information’ provision.
In a notice to the local bourse – Botswana Stock Exchange (BSE) – it said all resolutions put to the shareholders were dully passed. These included the consideration of financials for the period ending March 31, 2015; approval of interim dividends of 47 Thebe per share (12 November 2014, 37 Thebe per share (January 14, 2015), and 16 Thebe per share (March 24, 2014); re-election of directors; confirmation of appointment of new directors, approval of remuneration of the Chairman and non-executive directors and re-appointment of Pricewatercoopers as external auditors.
SAB Miller, which owns 40 percent stake in Kgalagadi Breweries Limited, has been approached by ABInbev, a Begium-based brewer for possible takeover with the latter said to be having until October 14 this year to submit their offer for SAB Miller or withdraw according to UK takeover rules. Closer to home where SAB Miller holds 40 percent shareholding in the local brewer KBL, while SAB Miller Africa BV holds a further direct stake of 16.8 percent in Sechaba Breweries Holdings Limited (SBHL) news of takeover of SAB Miller are yet to be communicated.
KBL Communications Manager at KBL, Mokoro Ketsitlile said in an interview recently that at this stage they cannot provide a comment on the deal. He said the deal it is a process that is currently being discussed at the top level and said communication will only be provided locally once all the process is complete at that level. SAB Miller acquired a controlling stake in KBL in 1977 offering expertise with regard to management, technical, brand building and distribution capability.
Globally with regards to the market share, SAB Miller is believed to hold 10 percent of the global market share whereas ABInbev holds 21 percent. The latter is said to be dominant in North America and Latin American while SAB Miller dominates mainly in the Middle East and Africa as well as in Eastern Europe.
If the deal materialises, it would mean the two will control 30 percent of the global market share. Here at home, KBL is assumed to control 90 percent of the beer market. In a statement released recently, SAB Miller denied in a press reports that confirmed that indeed ABInbev has informed them about intentions to acquire SAB Miller.
“No proposal has yet been received and the Board of SABMiller has no further details about the terms of any such proposal,” the company said in a statement further announcing that in the event such proposal is made, a review and appropriate response will be carried in line with such proposal.
SAB Miller has also announced in the same statement that there can be no certainties that an offer will be made and that ABInbev must by close of business on the October 14th either announce a firm intention to make an offer to SAB Miller or instead announce that it does have intention to make a move for SAB Miller. According to SAB Miller, the announcement for takeover is not yet formal and has told its shareholders to take no action to that effect.
On the hand, ABInbev responded to the SAB Miller statement by confirming that it has indeed made an approach to latter board of directors regarding a combination of the two companies. The company which is the leading global brewer says its intention is to work with SAB Miller toward a recommended transaction. ABInbev has made clear that there cannot be certainty that the approach will result in an offer or agreement.
Despite that Reuters reports that SABMiller announced changes to the make-up of some of its board committees, a move that is interpreted to be preparing a takeover offer from larger rival Anheuser-Busch InBev.The news agency said the maker of beers such as Peroni and Grolsch said its chairman, Jan du Plessis, and an independent director, Trevor Manuel, had been appointed to the board's corporate accountability and risk assurance committee.
Independent director Lesley Knox was appointed to the SABMiller nomination committee and Javier Ferran to the remuneration committee. SABMiller earlier this month said that Anheuser-Busch InBev (AB InBev) had approached it about a takeover that would result in the formation of a colossus producing a third of the world's beer.
Anheuser-Busch InBev is further said to have asked banks to underwrite up to $70 billion in debt financing as a move to back its potential takeover of SAB Miller. A Reuters report quoted sources saying: “The initial financing is expected to comprise bridge loans, which will be refinanced by bond issues, and longer term loans”.