The Best Beer Company in a Better World - Anheuser-Busch InBev
The Best Beer Company in a Better World - Anheuser-Busch InBev
The Best Beer Company in a Better World - Anheuser-Busch InBev
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74 | Annual Report 2008 F<strong>in</strong>ancial Report<br />
<strong>The</strong> follow<strong>in</strong>g transactions took place <strong>in</strong> 2008 :<br />
Acquisition of <strong>Anheuser</strong>-<strong>Busch</strong><br />
On 18 November, <strong>InBev</strong> has completed the acquisition of <strong>Anheuser</strong>-<strong>Busch</strong>, follow<strong>in</strong>g approval from shareholders of both companies.<br />
<strong>Anheuser</strong>-<strong>Busch</strong>’s results are <strong>in</strong>cluded with<strong>in</strong> the company’s results from 18 November 2008. <strong>The</strong> comb<strong>in</strong>ation creates the global leader <strong>in</strong><br />
beer and one of the world’s top five consumer products companies. Effective the date of the clos<strong>in</strong>g, <strong>InBev</strong> has changed its name to AB <strong>InBev</strong><br />
to reflect the heritage and traditions of <strong>Anheuser</strong>-<strong>Busch</strong>. Under the terms of the merger agreement, all shares of <strong>Anheuser</strong>-<strong>Busch</strong> were<br />
acquired for 70 US dollar per share <strong>in</strong> cash for an aggregate amount of approximately 52.5b US dollar or 40.3b euro. AB <strong>InBev</strong> f<strong>in</strong>anced the<br />
merger with funds drawn under the new senior and equity bridge facilities (see note 25 Interest bear<strong>in</strong>g loans and borrow<strong>in</strong>gs). On 18 December<br />
the 9.8b US dollar equity bridge facility was reimbursed with the proceeds of the issuance of 986 109 272 new AB <strong>InBev</strong> shares (6.36b euro).<br />
In l<strong>in</strong>e with the company’s risk management policy, AB <strong>InBev</strong> has matched sources (share issuance <strong>in</strong> euro) and uses of proceeds (reimbursement<br />
of 9.8b US dollar equity bridge facility) by pre-hedg<strong>in</strong>g its exposure to the foreign exchange rate between the euro and the US dollar at an<br />
average all-<strong>in</strong>-rate of 1.5409 US dollar per euro. <strong>The</strong> cost of the transaction reaches approximately 0.9b euro (1.2b US dollar) of which<br />
0.2b euro are allocated to goodwill, 0.1b euro relates to the capital <strong>in</strong>crease, 0.1b euro relates to the senior and equity bridge facilities<br />
commitment fees and equity bridge facility arrangement fees and are reported <strong>in</strong> the 2008 <strong>in</strong>come statement and 0.5b euro relates to the<br />
senior facility arrangement fees and will be taken <strong>in</strong> the <strong>in</strong>come statement as an accretion expense over the rema<strong>in</strong><strong>in</strong>g life time of the f<strong>in</strong>anc<strong>in</strong>g<br />
us<strong>in</strong>g the effective <strong>in</strong>terest rate method. Furthermore, as per the terms set <strong>in</strong> the merger agreement, AB <strong>InBev</strong> will assume some 2008<br />
pre-merger obligations. <strong>The</strong>se obligations are estimated at 52m euro (68m US dollar) of which 8m euro are accrued <strong>in</strong> the open<strong>in</strong>g balance<br />
sheet and will be settled <strong>in</strong> cash and of which 44m euro will be settled <strong>in</strong> AB <strong>InBev</strong> options. <strong>The</strong> grant is subject to the approval of the AB <strong>InBev</strong><br />
shareholders at the shareholders’ meet<strong>in</strong>g of 28 April 2009 without any future account<strong>in</strong>g impact, if approved. Should the grant not be<br />
approved, the entire obligation would have to be settled <strong>in</strong> cash and would result <strong>in</strong> an adjustment to the open<strong>in</strong>g balance sheet of 44m euro.<br />
<strong>The</strong> company is <strong>in</strong> the process of f<strong>in</strong>aliz<strong>in</strong>g the allocation of the purchase price to the <strong>in</strong>dividual assets acquired and liabilities assumed <strong>in</strong><br />
compliance with IFRS 3. <strong>The</strong> provisional allocation of the purchase price <strong>in</strong>cluded <strong>in</strong> the 2008 balance sheet and detailed <strong>in</strong> the table below is<br />
based on the current best estimates of AB <strong>InBev</strong>’s management and is based pr<strong>in</strong>cipally on valuations prepared by <strong>in</strong>dependent valuation<br />
specialists. <strong>The</strong> completion of the purchase price allocation may result <strong>in</strong> further adjustment to the carry<strong>in</strong>g value of <strong>Anheuser</strong>-<strong>Busch</strong>’s recorded<br />
assets and liabilities and the determ<strong>in</strong>ation of any residual amount that will be allocated to goodwill.<br />
<strong>The</strong> follow<strong>in</strong>g table presents the provisional allocation of purchase price to the <strong>Anheuser</strong>-<strong>Busch</strong> bus<strong>in</strong>ess as of 18 November 2008 :<br />
Million euro<br />
Before Purchase Price<br />
Allocation<br />
Purchase Price<br />
Allocation<br />
After Purchase Price<br />
Allocation<br />
Non-current assets<br />
Property, plant and equipment 6 742 1 783 8 525<br />
Goodwill 926 (926) -<br />
Intangible assets 487 16 242 16 729<br />
Investment <strong>in</strong> associates 3 163 2 250 5 413<br />
Trade and other receivables 165 (15) 150<br />
Current assets<br />
Income tax receivable 274 (29) 245<br />
Inventories 855 86 941<br />
Trade and other receivables 958 9 967<br />
Assets held for sale 16 - 16<br />
Cash and cash equivalents 378 - 378<br />
M<strong>in</strong>ority <strong>in</strong>terests (37) - (37)<br />
Non-current liabilities<br />
Interest-bear<strong>in</strong>g loans and borrow<strong>in</strong>gs (5 810) 1 010 (4 800)<br />
Employee benefits (1 316) - (1 316)<br />
Provisions (90) (23) (112)<br />
Deferred tax liabilities (973) (8 083) (9 057)<br />
Current liabilities<br />
Trade and other payables (2 258) (166) (2 423)<br />
Net identified assets and liabilities 3 481 12 138 15 619<br />
Goodwill on acquisition 24 661<br />
Consideration paid <strong>in</strong> cash 40 280