The Kremlin blocks AB InBev’s stake sale to Anadolu Efes in joint venture

RUSSIA – A Russian government commission, led by Finance Minister Anton Siluanov, has reportedly blocked Anheuser-Busch InBev NV’s (AB InBev) proposed sale of its stake in a Russian joint venture to Turkish partner Anadolu Efes AS.  

The decision was reported by the RBC newspaper, citing a commission meeting held on June 20, although no reasons for the refusal were provided. 

The deal, which was agreed upon last December, involved Efes Brewing International, a subsidiary of Anadolu Efes, acquiring AB InBev’s 50 percent share of their AB InBev Efes joint venture.  

However, Anadolu Efes announced in a statement to the Turkish stock exchange on August 6 that it had not received any official notification of the transaction’s rejection by the Russian regulators.  

The company reiterated that the completion of the transaction was contingent upon obtaining necessary regulatory approvals, which were initiated on December 19, 2023. 

Anadolu Efes stated, “There [has] been news in the media indicating that the transaction was rejected by the regulatory bodies; however, we have not received any official response as such.” 

When the deal was initially agreed upon last year, AB InBev declared that “no amount will be paid on closing,” but any payments received by AB InBev after the transaction’s completion would be subject to additional regulatory approvals and were expected to be not material.  

According to KPMG, the deal was valued between US$1.1 billion and US$1.3 billion at the time. Instead of an upfront payment, AB InBev was to receive compensation later based on the business’s performance. 

The filing further elaborated, “EBI shall not make an immediate cash payment upon completion of the transaction, and any future payments shall be determined based on the annual cash flow performance of AB InBev Efes BV’s operating countries and related regulatory restrictions for a certain and reasonable period of time.” 

The AB InBev Efes joint venture, formed in 2018, operates 11 breweries in Russia, producing beer brands such as Klinskoe and Efes Pilsen.  

Following Russia’s invasion of Ukraine in April 2022, AB InBev announced its intention to sell its shareholding in the venture and initiated talks with Anadolu Efes. 

Consequently, the production and sales of the flagship brand Budweiser, marketed as ‘Bud’ in Russia, were halted. 

The CMA is now seeking feedback on its provisional findings before making a final decision on September 5, 2024. 

In the second quarter of 2024, AB InBev reported a 2.7 percent year-over-year increase in revenue, reaching US$15.33 billion, up from US$15.12 billion the previous year. 

Underlying profit rose to US$1.81 billion, compared to US$1.45 billion the prior year. The megabrands category saw a combined revenue increase of 3.3 percent, with Corona leading the charge, experiencing a 5.6 percent revenue growth outside its home market. 

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