World’s largest brewer receives approval to merge Nigerian businesses

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) have granted pre-merger approvals to the world’s largest brewer, Anheuser-Busch InBev, to merge its Nigerian businesses as it braces to challenge the dominance of Heineken’s Nigerian Breweries and Diageo’s Guinness Nigeria in Africa’s populous economy.

Preliminary details of the merger indicated that three indirect Nigerian subsidiaries of Anheuser-Busch InBev-International Breweries Plc, Intafact Beverages Limited and Pabod Breweries Limited, would be merged through a scheme of merger. International Breweries, which is quoted on the NSE, will be the subsisting company after the merger.

All assets, liabilities and undertakings of Intafact and Pabod including employees, real property and intellectual property rights will be transferred to International Breweries upon the completion of the proposed merger. Shareholders of the two other companies-Intafact and Pabod, will be issued ordinary shares of International Breweries in exchange for their shareholdings in the merged companies.

The share exchange ratio and other terms and conditions are expected to be made known to shareholders in a scheme of merger, which will be sent to shareholders once the companies secure the required court order of the Federal High Court to convene statutory court-ordered meeting for shareholders’ approval of the merger.

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The business combination is still subject to approvals of the shareholders of the three companies and final approvals of the regulatory bodies including SEC, NSE, Federal Inland Revenue Service (FIRS) and the Federal High Court.

There are indications that the shareholders of the companies will approve the merger. A court-ordered meeting is expected to be scheduled in September 2017.

With the three breweries located strategically in three regions, the merger appeared to be a major plan to consolidate the operations of Anheuser-Busch InBev and take on its two main competitors in the Nigerian market.

International Breweries is located in Ilesa, Osun State in the South West region. Intafact Beverages’ brewery is situated in Onitsha, Anambra State in the South-East region while Pabod Breweries is located in Oginigba, Port Harcourt, Rivers Sate in the South-South region.

Anheuser-Busch InBev had recently indicated it plans to spend $400 million in establishing a major brewery in Nigeria as it moves to take on the two main Nigerian beer market leaders- Nigerian Breweries and Guinness Nigeria.

 

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