Anheuser-Busch Merges Ukraine and Russian Business With Anadolu Efes

Anheuser-Busch  has reached a non-binding agreement with Anadolu Efes (IST: AEFES), the leading brewer in Turkey, regarding a 50:50 merger of AB InBev’s and Anadolu Efes’ existing Russia & Ukraine businesses.

The announcement of this non-binding agreement follows AB InBev’s acquisition of a 24% stake in Anadolu Efes as part of the company’s combination with SABMiller, which completed in October 2016. The transaction remains conditional on the completion of satisfactory due diligence and is subject to regulatory approvals in Russia and Ukraine.

This intended combination of the companies’ operations in Russia and Ukraine would strengthen the competitive position of both AB InBev’s and Anadolu Efes’ brands in these markets, with the potential for further growth. The combined business’ ambitions would be to lead the Russian and Ukrainian markets, with a diverse portfolio of brands and a broader range of beers for consumers. In addition, the combination would enhance AB InBev’s existing relationship with Anadolu Efes and the value of its stake in Anadolu Efes.

Following the closing of the intended transaction, the combined business would be fully consolidated in the Anadolu Efes financial accounts. As a result, AB InBev would stop consolidating its operations in Russia and Ukraine and account for its investment resulting from this transaction under the equity method.

The name of the combined company would be AB InBev-Efes and both AB InBev and Anadolu Efes would have equal representation on the Board of Directors, with Tuncay Özilhan, current Chairman of the Anadolu Group and Anadolu Efes, serving as the Chairman.

Both AB InBev and Anadolu Efes have agreed in principle to the nomination of Dmitry Shpakov, the current president of the AB InBev Russia and Ukraine businesses, as the CEO candidate to lead and run the combined AB InBev-Efes business, and to the nomination of Roy Cornish, the current Managing Director of Efes-Rus, as its CFO candidate.

Commenting on the announcement, Carlos Brito, CEO of AB InBev, said: “Today’s announcement is a significant step in furthering the strategic partnership of AB InBev and Anadolu Efes and we look forward to a successful combination delivering a broader range of beer choices to consumers in both Russia and Ukraine.”

Tuncay Özilhan, Chairman of Anadolu Group and Anadolu Efes said: “We are delighted to further enhance our relationship with AB InBev and believe that the combination of our respective businesses, expertise and best practices in these markets will enable us to better capture the potential growth opportunities and add significant value to both Anadolu Efes and AB InBev Shareholders.”

Both AB InBev and Anadolu Efes will work towards agreeing binding transaction documents in due course and further announcements will be made as the process progresses. We anticipate the transaction could complete by the end of H1 2018. Until completion of the transaction, both AB InBev and Anadolu Efes’ businesses in Russia and Ukraine remain separate and continue business as usual.