AB InBev shareholders plan capital increase

Last month, InBev, the world’s largest brewer, announced that it was in talks with SAB, the world’s number two. SAB’s main shareholders, the American cigarette company Altria and the Colombian Santo Domingo family, said they were only interested in selling in return for AB InBev equity.

In the meantime, the Belgian and Brazilian family shareholders of InBev – EPS and BEC respectively – have been buying up shares to increase their joint holding from 51.4% to 51.9% now, at a cost of €873 million.

The two holding companies representing the families have also taken credit lines from their banks for a value of €3.7 billion, handing over 42.6 million shares as security. That money is thought to be waiting to fund a capital increase in the immediate wake of a takeover of SAB. As a result, the share of the company held by the families would not be diluted by the arrival of new SAB shareholders. The families carried out a similar operation in 2008, when InBev took over American brewer Anheuser-Busch.

In related news, the federal government has responded to a threatened move of the company’s head office from Leuven to London with the offer of a reduction in the levy paid by foreign shareholders on dividend income. The move to London was said to be one of the conditions of the takeover imposed by SAB shareholder Altria, to avoid having to pay tax in Belgium. The British government does not charge tax on foreigners’ share income.

Federal finance minister Johan Van Overveldt proposed a reduction of the tax from its current rate of 25%, 15% or 10%, depending on the type of income involved, to only 1.69% on two conditions: the dividend must be paid out to a British or American enterprise and the enterprise must hold a minimum of €2.5 million in shares of the new merged brewery. The proposal has still to be approved by the full council of ministers.

Photo courtesy Jacques Renier/Wikimedia