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Bumper US$2bn payday for advisers on SABMiller deal
By Steve Slater
LONDON, Aug 26 (IFR) - Brewers Anheuser-Busch InBev and SABMiller (Frankfurt: 891295 - news) will pay almost US$2bn in fees to banks, lawyers, PR firms and others advisers to complete the largest ever consumer products takeover.
Shareholder documents released on Friday showed the US$104bn takeover by AB InBev of SABMiller will herald some of the biggest fees ever for bankers and other advisers for a single deal.
The documents showed AB InBev and the new company will pay US$1.735bn in fees and expenses and SABMiller will pay US$202m. That amounts to 1.9% of the value of the deal.
The firms said they would pay US$248m for financial and broking advice.
AB InBev will pay US$135m of that to its advisers, which include lead adviser Lazard (Frankfurt: A0DQP8 - news) and also Deutsche Bank (LSE: 0H7D.L - news) , Barclays (LSE: BARC.L - news) , BNP Paribas (LSE: 0HB5.L - news) , Bank of America Merrill Lynch, and Standard Bank.
SABMiller will pay US$113m to its advisers, which include Robey Warshaw, JP Morgan, Morgan Stanley (Xetra: 885836 - news) , Goldman Sachs (NYSE: GS-PB - news) and Centerview Partners.
AB InBev said its fees include US$725m for financing arrangements.
It secured a record US$75bn syndicated loan to back the deal. The financing was provided by 21 banks from Europe, the US, Japan, Australia and Canada.
The two companies will pay US$261m in legal advice, with recipients including Linklaters.
The fees paid to advisers and lawyers are likely to have been bloated by some complex aspects to the deal, including anti-trust reviews, the need for some divestments and a complex scheme of arrangement.
AB InBev and SABMiller are also paying US$29m for public relations advice and US$17m for accounting advice.
AB InBev will also pay US$180m for other professional services, including to management consultants, actuaries and specialist valuers.
It said it will pay an additional US$475m in transaction taxes and other costs and expenses.
Disclosures of such hefty fees could stoke controversy as they were released on the same day AB InBev said it expects to cut 3% of its combined workforce, or 5,500 jobs, after the takeover is completed.
AB InBev is aiming to achieve pre-tax savings of at least US$1.4bn per year within four years after completion of the deal through increased efficiency, sharing best practices and the removal of overlaps in corporate and regional headquarters.
The maker of Budweiser, Stella Artois and Corona expects the potential job losses to take place over a three-year period.
The world's largest brewer still needs backing from SABMiller shareholders for its £45 per share offer, along with a cash-and-share alternative, which values its target at £78.4bn (US$103.6bn). Those shareholders will vote at a meeting on September 28. (Reporting by Steve Slater)
