Brewing giant AB InBev says its £79bn buyout of SABMiller will come at the cost of 575 UK jobs.
The Budweiser producer revealed in takeover documents that it will close the SABMiller administrative offices in Woking and London. The combined group's headquarters will be in Leuven, Belgium, and its operations will be managed out of New York.
"SABMiller's existing UK locations will be significantly impacted after the combination completes," a spokeswoman for AB InBev said. "Any changes affecting employees in the UK would be implemented with due respect for applicable legal considerations and consultation requirements."
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SABMiller employs 523 staff in its Woking office, which the Daily Telegraph says will remain open for a transitional period only, and 51 in London.
To clear the deal with competition regulators, AB InBev will sell SABMiller's Grolsch, Peroni and Meantime brands to Japanese brewer Asahi, the BBC reports. The combined business will still boast around a third of all beer sales around the world.
Whether the transaction will go through remains subject to shareholder votes, however, and there has been dissent by SABMiller investors over the two-tier nature of the offer.
Aberdeen Asset Management says that, even after an 11th-hour increase, a £45 per share cash offer that will be considered by most shareholders is worth far less than a £51 cash and shares alternative after a recent market surge since Brexit.
Believing the cash price in fundamental terms undervalues the business, it is urging its peers to reject the deal.
SABMiller's two largest shareholders, Marlboro-owner Altria and Bevco, the investment vehicle of the Santo Domingo family of Colombia, for whom the mixed offer was specifically designed, have pledged to back the deal with their 40 per cent interests.
Budweiser brewer ups bid but faces battle to secure Miller
27 July
Budweiser-owner AB InBev has responded to investor concerns and upped its mega-merger bid for rival SABMiller to an effective £79bn.
However, despite the sweetener, analysts believe the Belgium-based firm faces an uphill battle to convince many Miller investors of the benefits of the tie-up – and one major shareholder has already declared the revised terms "unacceptable".
AB InBev secured the buyout in principle last November, after SABMiller, described by The Times as a "reluctant bride from the start", rejected five earlier approaches.
In the end, a takeover that valued SABMiller at around £71bn was accepted by the company's board. However, some have always been rankled by the controversial dual structure, which means shareholders can choose between an all-cash and a cash-and-shares payout.
Coupled with market ructions since the Brexit vote last month, this unrest has evolved into outright opposition that could yet topple the transaction.
The headline figure was a cash amount of £44 per SABMiller share. Since the pound has slumped against the dollar, AB InBev has boosted this by £1 to £45 per share to prevent the effective return for many overseas investors being eroded.
However, to mitigate the potential tax impact of cashing out on SABMiller's two largest shareholders, Marlboro-owner Altria and Bevco, the investment vehicle of the wealthy Santo Domingo family of Colombia, a mixed payment that involves a five-year lock-up was also tabled.
As AB InBev's share price has surged since last year, this parallel bid has jumped in value from £41.85 to more than £51.
Aberdeen Asset Management, a top ten shareholder in Miller, says the five-year tie-up means most shareholders cannot accept this more lucrative proposal as it would render their holding "illiquid".
In contrast, it believes the cash offer is not high enough – and is angry that Altria and Bevco, which have already given "irrevocable undertakings" to back the buyout, get to use their 40 per cent shareholding to support a deal that hands them a much larger windfall.
"We believe the board’s only choice is to treat Altria and BevCo as a separate class of shareholders and would urge them to make a public statement to this effect," Aberdeen said in a statement.
That would place the merger in serious peril. Even if it doesn't happen, there has been enough opposition to potentially pose a problem getting to the 75 per cent shareholder approval threshold in a vote.
Activist investors, such as Elliott Management, TCI and Davidson Kempner, have voiced discontent. It remains to be seen if the new cash price is enough to get them to back on board.
