After you’ve spent more than $100 billion to acquire your biggest competitor, what’s left? Sure, you can buy up that smaller business here and sell off this subsidiary there, but how does a company regain the adrenaline rush of pulling off a transaction so big people need to stop and count the zeros?
Now that AB InBev and SABMilller have gotten all the requisite blessing for their merger marriage and are going through the process of deciding whose furniture to keep and what color to paint the living room, Reuters looks at the various possibilities of deals that remain for the beer goliath.
The most intriguing is a potential move into the cola business, possibly through acquisition of Coca-Cola itself.
AB InBev is already worth close to $200 billion, slightly more than than the $180 billion value for Coca-Cola, and the Belgium-based company will actually have a financial stake in Coke’s operations when the SABMiller deal is finished.
As Reuters points out, SAB owns a majority stake in Coca-Cola’s bottling operations in Africa. Once SAB and ABI have finished their merger, Coca-Cola can then exercise a clause in its contract giving the soda colossus the right to buy those shares, valued at around $4 billion. It’s possible, notes Reuters, that Coca-Cola might pay that high price just to keep AB InBev from its doorstep.
Additionally, SAB owns 24% of Turkish brewer Anadolu Efes, which in turns owns 50.3% of Istanbul-based bottler Coca-Cola Içecek. Contractually, SAB can only sell its shares, worth around $930 million, in the company to Anadolu Efes.
The other big issue is that AB InBev already has a significant involvement in PepsiCo’s global operation. Its Brazil-based subsidiary Ambev isn’t just bottling beer, but is one of the largest Pepsi bottlers in the world, responsible for selling Pepsi products in Brazil and other countries in South America.
Reuters notes that any huge soft drink acquisition attempt by ABI would likely face an uphill battle, but folks said the same thing after the first rumors of a deal between ABI and SABMiller, so you never know.
by Chris Morran via Consumerist
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