AB InBev Plans to Sell Grolsch, Peroni Brands

Nov 30, 2015

(WSJ) - Anheuser-Busch InBev NV plans to sell two of SABMiller PLC’s best-known beer brands, as the world’s largest brewer seeks to ease European regulatory concerns over its pending acquisition of its biggest rival.

AB InBev plans to sell Grolsch and Peroni, both SABMiller brands that are sold globally, according to a person familiar with the matter. No deal has been struck and a sale isn’t certain, the person said.

Rights to the Peroni and Grolsch brands in the U.S. will remain with MillerCoors LLC. As part of its deal to buy SABMiller, AB InBev agreed to sell SABMiller’s 58% stake in the MillerCoors joint venture to its partner Molson Coors Brewing Co.

Earlier this month, AB InBev agreed to buy SABMiller for about $108 billion, a deal that will create a brewing behemoth that dominates about 30% of the world’s beer market.

Sanford C. Bernstein analyst Trevor Stirling has noted that, in Western Europe, AB InBev and SABMiller have potential overlaps in Italy and the Netherlands, where the pair have combined shares of 30% and 27%, respectively. The companies also have combined share of more than 20% in the U.K. and Hungary. European regulators informally use 30% market share as a benchmark when considering whether a tie-up would give any one company too much sway over the market.

Peroni and Grolsch are two of SABMiller’s four global brands, the others being Miller Genuine Draft and Pilsner Urquell. The U.K.’s Sunday Times newspaper first reported on the possible sale of Peroni and Grolsch.

Analysts at Susquehanna Financial Group LLP had expected AB InBev to address potential regulatory concerns by selling local brands, not global ones like Peroni and Grolsch. But selling the global brands would let the company address those concerns swiftly and raise additional money to help reduce the $75 billion in debt it is taking on to finance its takeover of SABMiller.



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