AB InBev's plan to sell SABMiller's beer brands in central and Eastern Europe has been presented as yet another sop to the trustbusters.
But unlike the $1.6 billion sale of SABMiller's 49 per cent stake in China Resources Snow Breweries and some of its premium beers to Asahi, this is a disposal where the glass isn't half empty.
Those were strong assets in good markets, which would have been given up semi-ruefully by AB InBev's dealmakers in their pursuit of regulatory approval for the $107.5 billion 'Megabrew' deal.
The latest European sale is born more out of strategic choice.
As Bloomberg Intelligence's Duncan Fox notes, SABMiller targets countries with young, fast-growing populations, flourishing urban areas and strong middle classes. That's why it wants SABMiller, which generates 64 per cent of operating income from Latin America and Africa.
In contrast, slower growing Europe isn't a priority. SABMiller's central and eastern European assets haven't been performing too well either. Lager volumes in Europe fell 1 per cent in its last fiscal year.
Yet the central European assets still represent a sizeable business, estimated to be worth between 10 and 14 times operating profit of about $460 million. That would put the value of the unit at as much as about $6 billion. Those proceeds will come in handy when funding the massive Megabrew deal.
In terms of natural buyers, both Heineken and Carlsberg might face competition issues if they wanted the assets. Carlsberg is the beer market leader in Eastern Europe, with 24 per cent in 2014, followed by Heineken with 16.1 per cent, according to Euromonitor.
Molson Coors could be a suitor as it tries to expand in the region. It has a 5 per cent share in Eastern Europe, although it might have to raise capital. Otherwise, there are financial buyers and brewers outside Europe. Japan's Asahi is buying SABMiller's Peroni, Grolsch and Meantime, and could provide a home to the central European brands.
As Gadfly has noted before, the AB InBev shares have warranted a premium because of its ability to squeeze out higher operating margins than rivals. But costs have risen as it tries get its mainstream US beer brands moving again and it expands into craft beer, where premium ingredients can be expensive.
There are also questions about whether AB InBev can eke out any more savings from the Megabrew deal than the $1.4 billion promised annually, something investors had been hoping for. At least this latest disposal shows that in terms of cutting off dead wood, its reputation as an astute manager of assets remains intact.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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