UPDATE: AB InBev's plans are verified, reports The Wall Street Journal. Additionally, the company is looking to sell SABMiller's London craft brewer Meantime.
Dive Brief:
- Anheuser-Busch InBev has announced plans to sell SABMiller's Grolsch and Peroni brands to appease European regulators considering AB InBev's pending acquisition of SABMiller, a person familiar with the matter told The Wall Street Journal.
- "No deal has been struck and a sale isn’t certain, the person said," according to The Wall Street Journal.
- As part of the acquisition offer, AB InBev would sell SABMiller's 58% stake in its MillerCoors joint venture to partner Molson Coors. Though Grolsch and Peroni are globally sold brands, rights to the two brands in the U.S. would remain with MillerCoors, and so go to Molson Coors.
Dive Insight:
"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," The Wall Street Journal reported.
Peroni and Grolsch are two of four global brands currently owned by SABMiller. The others are Miller Genuine Draft and Pilsner Urquell.
Analysts predicted that AB InBev would sell local brands in different countries of regulatory concern rather than global brands. However, by selling global brands, AB InBev can more swiftly address these regulatory concerns across the board while also generating the funds needed to offset the $75 billion in debt the company is using to finance the $108 billion takeover.
Instead, AB InBev is more interested in SABMiller's local brands and strong positions in emerging markets like Africa and Latin America, according to The Wall Street Journal sources, which could open up new potential markets for AB InBev's flagship products.