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AB InBev to dominate top jobs after SABMiller deal

Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Anheuser Busch InBev managers will take all but one of 19 key positions following the brewer’s $100 billion-plus takeover of rival SABMiller, according to details of the transaction announced on Thursday.

The deal, sweetened last week to help make up for a drop in the British currency, has been approved by both companies’ boards but still needs to be voted on by shareholders, some of whom oppose the deal.

AB InBev is known for its cost-cutting and centralized control, which some analysts have said may be tough to impose on all corners of SAB’s business, with its joint ventures and equity stakes in markets such as Turkey and Africa.

AB InBev, the maker of Budweiser and Stella Artois, said the new company – which has yet to be named – would continue to be based in its home town of Leuven, Belgium, while its operations would be managed from New York.

SAB’s offices in Woking, outside of London, will be kept open for a transitional period, but its central London headquarters will be wound down. The bulk of SAB’s European businesses are being sold as part of the deal.

“It looks as if all the SAB group and regional HQs will be eventually phased out,” said Bernstein Research analysts.

The new company will be run by teams of “functional chiefs” and “zone presidents”, both reporting to AB InBev Chief Executive Carlos Brito. All but one of those 19 positions will be held by current AB InBev executives.

There was no mention of roles for SABMiller’s CEO Alan Clark or finance chief Domenic De Lorenzo in the new company.

Of SAB’s 576 corporate roles in the UK, 523 are in Woking and 51 in London.

AB InBev said SAB’s general counsel John Davidson, human resources director Johann Nel and managing director for Africa Mark Bowman, had agreed to stay for a transition period of at least six months to help with “integration, talent retention and stakeholder management”.

The new company will be organised into nine geographical zones, with existing SABMiller hubs in Miami, Hong Kong and Beijing phased out within a few months after deal closes, which is expected in October.

AB InBev has agreed to sell SAB’s western European brands Peroni, Grolsch and Meantime, to Japan’s Asahi. It has also pledged to sell SAB’s Eastern European business, which includes the Pilsner Urquell brand, though a buyer has not been agreed.

SAB’s joint ventures in the United States and China will be taken over by their respective partners when the deal goes through.


(By Martinne Geller. Additional reporting by Mamidipudi Soumithri in Bengaluru; Editing by Adrian Croft and Mark Potter)


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Lonmin will not shy away from merger or takeover

Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – Platinum producer Lonmin will not “shy away” from any merger or takeover but for now the company is focused on its plan to survive tough market conditions, its chief executive said on Tuesday.

Like its peers, Lonmin is battling sharp falls in commodities prices amid a supply glut and slowing demand growth in top consumer China. Its share price has tumbled by more than 95 percent since the start of 2015.

This has led to market speculation about a possible takeover of the 107-year old company and some analysts have said efforts so far to turn the company around were not enough despite cost cuts and a deeply discounted rights issue in December.

However, no concrete news has emerged.

“We are continuously looking at options to maximise value for our shareholders and all other stakeholders. Should it be of benefit to our shareholders and stakeholders it’s not something we would shy away from,” CEO Ben Magara told Reuters at a mining conference in Cape Town when asked if he would consider takeover offers.

He declined to say if Lonmin was in any talks with any potential parties.

The price of platinum has fallen about 30 percent year-on-year, forcing miners to sell assets and cut production and jobs. Around two-thirds of the industry, whose mines were damaged by the five-month strike in 2014, are making losses.

Magara said the company was for now focused on turning cash positive in a low price environment – which involves closing high-cost shafts and cutting jobs.

“That’s what I am worrying about. The investors have given us money and we must deliver. Investors are asking if we are going to deliver on this,” Magara said.

Hurt by a prolonged 2014 strike, rising costs and the plunging platinum price, Lonmin raised $400 million through a cash call in December.

The rights issue was undersubscribed even though it was deeply discounted, forcing the company’s underwriters to buy shares in the company and showed that investors were losing faith in the beleaguered mining sector.

The shares were priced at just a penny each on Nov. 9, a 94 percent discount to the stock’s previous session closing price of 16.25 pence on the London Stock Exchange

“I have no doubt that there will be pressure on us when we finally start making money. Will we go and put it in a project first or will we pay investors?” Magara said.

“I think it’s important that investors will get their money back first. They deserve it.”

Lonmin has said it will continue to review its services and reduce costs, mainly through job reduction, as the slide in the price of its main commodity bites further.

“We have seen cycles come and go and I suppose this shall pass but I have to admit, it’s one of the worst I have seen,” Magara said.


(By Olivia Kumwenda-Mtambo, Editing by James Macharia and David Evans)

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