Analysis, Implications as Anheuser-Busch InBev Bids for SABMiller (Part 5 of 8)
The Africa Angle in AB–InBev's Bid for SABMiller Beer brewers bullish on prospects for AfricaAnheuser-Busch InBev (BUD) (AHBIF) (ABI.BR), or ABI, expects Africa to play a major role in its growth if ABI and SABMiller (SBMRY) (SAB.L) were to combine. Africa's relatively younger population and growth prospects make it a compelling investment destination for brewers.
In deference to SABMiller's roots in South Africa, as well as to have a presence in the high-growth market, ABI plans a dual listing of its stock on the Johannesburg Stock Exchange if the two companies were to combine. The combined company would also have its regional headquarters in South Africa and have a local board there.
Enlarge Graph SABMiller's positioning Over the past five years, SABMiller's organic revenue in Africa has grown the fastest, compared to the other geographies the company operates in. SABMiller is also well-established, with a century-long presence in South Africa.
SABMiller also holds a leadership position in most African markets where it has a presence. From a distribution standpoint, this would also make it easier for ABI to sell its own brands. According to the annual BrandZ study, ABI is strongly bullish on the international prospects for Budweiser, the world's top-selling beer brand.
Peers focus on AfricaOn October 7, Dutch brewer Heineken (HEINY) (HEIA.NA) and Britain's Diageo (DEO) (DGE.L) announced another beer portfolio realignment. As part of the deal, Diageo bought out Heineken's 20% stake in Guinness Ghana Breweries Limited while selling stakes in other assets in Jamaica, Malaysia, and Singapore to Heineken.
Heineken also announced a new joint venture in the Ivory Coast, Brassivoire, in late September 2015.
The iShares MSCI ACWI ETF (ACWI) has ~1% of its holdings invested in Anheuser-Busch InBev SA, Heineken, Diageo, and SABMiller.
Source: The Africa Angle in AB–InBev's Bid for SABMiller
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