SABMiller investors have given the green light to Anheuser-Busch InBev’s £79bn Megabrew merger.
Minority shareholders for the FTSE 100 drinks giant voted overwhelmingly in favour of the deal, one of the largest in corporate history, with more than 95.5 per cent of votes cast in support.
All shareholder hurdles for the mega-merger have now been passed, as stock holders at Anheuser-Busch InBev also backed the proposed tie-up at a meeting in Brussels today, paving the way for the deal to complete in October.
The vote in London today came from SABMiller's minority shareholder after the High Court ruled last month that SAB investors could be split into two classes.
This separated Colombia’s Santo Domingo family and cigarette maker Altria from smaller investors as the two majority shareholders have access to a more lucrative joint cash and stock option.
Altria and the Santo Domingos, who together own around 40 per cent of SABMiller’s stock, fully consented to the deal last month.
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AB InBev required 75 per cent backing from today’s vote to move ahead with Megabrew.
Voter turnout among minority shareholders was high, at 73.22 per cent. There had been fears that many investors, especially US hedge funds, would not vote convert their holdings to shares with voting rights to avoid paying stamp duty.
However, the solid turnout indicates that hedge funds engaged with the deal to a greater degree than expected.
SABMiller will lose its name as a result of the deal, it was revealed today, with Budweiser brewer AB InBev retaining its name once the merger completes.
Around 5,500, or three per cent, of the combined workforce will also be offloaded.
As per a schedule released by the two firms last month, the companies expect the merger to be effective and combination to complete on 10 October and for a new listing of the combined group to be launched on 11 October.
The newly-merged company will be listed on Euronext Brussels and will have secondary listings on the Johannesburg Stock Exchange, Mexico Stock Exchange and the ADSs arm of the New York Stock Exchange.
Warwick Business School professor John Colley said:
SABMiller shareholders have hit the jackpot, whilst customers are ultimately likely to end up with less choice and higher prices. Cost rationalisation will mean substantial redundancies amongst SABMiller staff. The sheer extent of cost savings which will be extracted by AB InBev together with the growth potential of Africa and Latin America means that AB InBev shareholders might benefit after all.
Value is frequently lost in major deals through paying too much and indecisive integration. AB InBev are paying an enormous price but have clear views on integration. The $1.4bn of annual savings claimed by AB InBev looks a significant underestimate designed to appease affected parties such as governments and employees.
However, AB InBev was forced to top up the all-cash offer to £45 per share after disgruntled investors argued the joint cash and stock option available to the majority shareholders was worth more following the Brexit vote in June and the ensuing drop in sterling.