AB InBev Agrees To Maintain Employment Levels In South Africa

(RTTNews) - Belgian brewer Anheuser-Busch InBev NV, or AB InBev (BUD, AHBIF.PK) and The South African Government agreed an approach on public interest commitments in proposed acquisition of SABMiller Plc. (SBMRY.PK, SAB.L) by AB InBev.

The package of commitments addresses employment, localisation of production and inputs used in the production of beer and cider, empowerment in the company, long-term commitments to South Africa and participation of small beer brewers in the local market.

Carlos Brito, CEO of AB InBev said, "We are pleased to have reached this agreement with the South African Government. As we have stated from the outset, we are excited about the growth opportunities and the role South Africa will play in our combined business."

In a commitment, AB InBev has undertaken to ensure that at no point in the future will there be involuntary job losses in South Africa as a result of the transaction. In addition, the company has committed to maintain its total permanent employment levels in South Africa as at the date of closing, for a period of five years.

The company also agreed to invest R1 billion to support small-holder farmers as well as to promote enterprise development; local manufacturing, exports and jobs; the reduction of the harmful use of alcohol (including making available locally produced low and no-alcohol choices for consumers) and green and water-saving technologies.

As part of the R1 billion commitment, AB InBev will finance 800 new emerging farmers and 20 new commercial farmers to produce barley, hops, maize and malt for the company, with the strategic intent to create additional jobs in the agricultural supply chain. The company committed to expand the production of barley to be malted and to turn a current net import of barley to a net export of malt (the processed form of grain used in beer brewing).

The commitment will also support other enterprise development initiatives, including through coaching and business incubation and the localisation of inputs into the production of beer, which range from agricultural inputs to packaging.

In addition, AB InBev undertook to work closely with government to reduce the harmful use of alcohol, including through introducing and promoting no-alcohol and lower alcohol products to the South African market to encourage consumers to make lower alcohol choices, including through brewing these products locally where possible.

In terms of the agreed approach, the company will support broad-based empowerment and will maintain South African Breweries' current Zenzele share-scheme which provides opportunities for black South Africans (including employees) to participate as shareholders, until the scheme expires in 2020. The company will table a proposal within two years of closure of the deal that will set out its long-term empowerment commitments beyond 2020.

As a further indication of its long-term commitment to investment in the country, AB InBev's regional head-office for Africa will be located in Johannesburg and a secondary listing on the Johannesburg Stock Exchange has already been completed.

The agreement also includes commitments by AB InBev to support the participation of small craft-beer producers in local markets.