A new transnational brewer is born with

the Merger of AmBev and Interbrew


If the talks being held in secrecy by AmBev of Brazil and Interbrew of Belgium are confirmed, the creation of one of the major brewers of the world and the major private transnational of Brazil is likely to be announced one of these days, perhaps on Wednesday 3. The new company would have annual sales of US $ 10 billion and might be in a position to compete at global level with US based Anheuser-Busch, so far the indisputable global leader of the sector.


At the beginning, the new combined company AmBev and Interbrew would be split, to merge then in a second stage. According to projections by the international consulting firm Canadean, based on 2002 data of AmBev and Interbrew, this giant company would control more than 11 percent of the beer market. Anheuser-Busch, manufacturer of Budweiser beer, accounts for 12.1 percent of the world beer production.


Brazilian and Belgian capitals shall have equal stake in the new company even though Interbrew is larger than Ambev, both in market value and in volume of production (however the Brazilian company is more "efficient” than Interbrew its operating margin is 22.5 percent, while that of its new partner is hardly 12 percent.)


The South American brewery has a leading position in the region and it also operates in Central America, while the Belgian brewer has major interests in Europe (essentially in Germany, Belgium, Russia and the Czech Republic), North America (Canada is its strong point) and the Asian market. In Mexico, the Belgian company has a 30 percent stake in Femsa, which trades the brands Tecate and Sol. As regards AmBev, during the past four years it acquired almost ten breweries in different Latin American countries, a region where Interbrew has no plants of its own.


While Citibank and the law firm Barbosa, Müssnich & Arago are the legal advisers of AmBev, the European company takes legal advice from Goldman Sachs and the law firm Machado, Meyer, Sendacz & Opice.


The merger operation was approved by high-level representatives of the Brazilian government, such as the Minister for Home Affairs (Casa Civil), José Dirceu, and the Minister of Finance, Antonio Palocci, who were informed about the talks in December.


Once the possibility of a merger with Interbrew was known by the public, the price of AmBev’s shares rose sharply in the Sao Paulo Stock Exchange and reached its highest value.


Daniel Gatti

© Rel-UITA

1 March, 2004


  UITA - Secretaría Regional Latinoamericana - Montevideo - Uruguay

Wilson Ferreira Aldunate 1229 / 201 - Tel. (598 2) 900 7473 -  902 1048 -  Fax 903 0905