AB InBev lists on JSE

Multinational beverage and brewing company Anheuser-Busch InBev (AB InBev) listed on the JSE on Friday at a market cap of R3.1 trillion.

This makes it the biggest inward locally-listed company by market cap. It opened roughly in line with expectations at a price of R1 938 and closed at R1 944. Shares to the value of R1.1bn were traded.

The brewing behemoth’s debut follows an announcement in November last year that the board of AB InBev and SABMiller had reached agreement on the terms of a recommended acquisition of the entire issued share capital of SAB Miller by AB InBev. The merger would, amongst others, help AB InBev to exploit opportunities in African markets.

Donna Oosthuyse, director of JSE Capital Markets says from today (Friday), ordinary shares of AB InBev will be tradable by South African local investors without using their foreign portfolio allowances.

“The listing provides investors with an attractive rand hedge, particularly in light of a weaker currency and an opportunity to invest and participate in the future growth of AB InBev.”

AB InBev’s listing comes after the JSE granted approval for a secondary listing of its ordinary shares and it fulfilled the requirements of the fast track process.

The fast track listing process was introduced to the JSE’s listing requirements two years ago and enables companies to secondary list on the JSE more quickly and easily if they already hold a primary listing on certain international exchanges.

Belgium-based AB InBev’s primary listing is in Brussels.

Carlos Brito, chief executive officer of AB InBev, says it is delighted to be listing on the JSE.

“We were keen to do so as soon as possible as part of our commitment to investing in South Africa, and we appreciate the support we have received from the JSE, South African Reserve Bank and local investment community to make this happen. We look forward to welcoming new shareholders to AB InBev.”

Jean Pierre Verster, portfolio manager at 36ONE Asset Management, says AB InBev has an extremely good track record as a company that has created a lot of value over the years, with a strong company culture in terms of focusing on value creation, minimising waste and maximising shareholder value. Therefore, 36ONE believes it has good investment prospects at the current valuation.

Niël Hougaard, analyst and head of research at Autus Fund Managers, says the fact that AB InBev offers investors another opportunity to protect against rand weakness counts in its favour. The company is also well-diversified.

Hougaard says the global beer industry is currently experiencing some consolidation and generally bigger companies perform better in such an environment. It also offers economies of scale, an opportunity to be more efficient and to cut costs.

The share still has upside potential as it will target growth in markets such as Africa, he says.

AB InBev will be included in the beverage sector of the main board, which has a total market capitalisation of R11.3 trillion and constitutes 14.7% of the overall market cap of the JSE.

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