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AB InBev still lurks
Heinz's acquisition of its rival Kraft for US48bn has created a stir - and not just in the US food sector. It has also left beer industry observers pondering its implications for a long-mooted bid by Anheuser-Busch InBev (AB InBev) for SABMiller.
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The common factor in the Kraft and potential SABMiller deals is 3G Capital Partners (3G), owner of a 20% stake in AB InBev. 3G, the private equity arm of Brazil's richest man, Jorge Paulo Lemann, also jointly controls Heinz together with Warren Buffett's Berkshire Hathaway investment company.
The question now being bandied about the market is this: given the Kraft deal's financial and strategic implications for 3G, will Lemann be prepared to back AB InBev in a deal on the scale of an acquisition of SABMiller any time soon?
Many observers believe Lemann will not.
"It could delay an InBev bid for SABMiller," agrees Absa Asset Management investment analyst Christopher Gilmour. "But I still see it as a question of when and not if a bid by InBev will come."
Lemann will not stop until he has SABMiller in the AB InBev fold, believes Gilmour. "He has a great love of creating global giants."
Indeed, it was Lemann who, together with AB InBev's equally deal-hungry CE, Carlos Brito, was instrumental in InBev's acquisition of US brewer Anheuser-Busch in 2008. The 46bn deal created the world's largest brewer.
Acquisition of its closest rival, SABMiller, would entrench AB InBev's position even further, taking its share of global beer industry profits from 32% to about 45%.
It would also bring with it what AB InBev lacks most in its global reach: a strategic position in Africa.
Another interesting dynamic has entered the potential AB InBev bid for SABMiller. It is Buffett who has made it known he wants Berkshire Hathaway and 3G to engage in more joint deals. Berkshire Hathaway has the resources - around $50bn in cash.
Source: Financial Mail via I-Net Bridge
Source: I-Net Bridge
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