The cost of fending off AB-InBev

The ongoing USD 100 billion plus takeover of SABMiller by rival AB-InBev has so far cost the London-listed beer giant GBP 111 million (USD 160 million) in banking and legal fees, as well as pay-outs to retain important members of staff. This was disclosed on 18 May 2016, when SABMiller reported full year results.

The fees bonanza will go to a host of firms that advised SABMiller on its battle with AB-InBev. Included in the costs are two-year retention and incentivisation packages for important SABMiller employees, which include a series of cash payments equivalent to 100 percent of salaries, media say. There had been concerns that SABMiller would be hit by a staff exodus given that AB-InBev has a reputation for ruthless cost-cutting. SABMiller’s CEO acknowledged that employee turnover actually has been very low to date.

Additionally, SABMiller reported that in its past financial year it took an USD 572 million charge to close its brewery in strife-hit South Sudan, where foreign hard currency was scarce, and in Angola, where it has been hurt by a sharp depreciation in the local currency and so has cut back its operations.

Most revealingly, SABMiller said that it does not expect the AB-InBev takeover to close before it pays its final dividend on 12 August 2016.