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Summary
- Apollo Global Management led consortium is all set to acquire a minority stake in Belgium-based brewing company for $3 billion.
- Brewing company AB InBev will get the undisrupted supply of metal containers such as cans and kegs throughout their strategic alliance.
Leading global alternative investment manager with assets under management of approximately $433 billion Apollo Global Management Inc (NYSE:APO) and a group of institutional investors have made a strategic decision to acquire a 49.9 per cent stake in Anheuser-Busch InBev’s metal container plants in the US. The transaction worth $ 3billion would be carried out between Anheuser-Busch InBev SA/NV (NYSE:BUD) and Apollo Global Management.
The potential strategic relationship between Apollo Global and Anheuser-Busch InBev seems to be a win-win situation for both the parties. Upon successful completion of this transaction, Apollo Global can capitalise the opportunity to make high quality investments for the long-term horizon. The investment manager has offices across continents.
Moreover, AB InBev can leverage upon the expertise of Apollo and its integrated investment platform to unlock additional shareholder value by optimising its asset portfolio amid a challenging trading environment at present. Moreover, AB InBev can utilise the proceeds to reduce its debt.
After the deal, the majority stake will rest with AB InBev, which implies that it would control the US-based metal container plants. AB InBev will get an undisrupted supply of metal containers such as cans and kegs throughout their strategic alliance that is guaranteed through a long-term supply agreement with Apollo Global Management. Due to the pandemic, beer sales have increased and the alliance might help Belgium based brewer.
In addition, AB InBev would be given an option to reacquire the minority stake at a predetermined financial contract after 5 years post transaction.
On the other hand, Apollo Global remains well poised to provide an unconstrained capacity for complex and creative transactions along with efficient custom capital solutions for large corporations. Apollo has a well-integrated platform with less complexity to help large corporations with complex transactions.
Apollo Global delivered a strong performance in the third quarter this year. Apollo’s total AUM (assets under management) grew by $102 billion since December 2019 and were recorded at $433 billion by the end of Q3 FY2020. During the third quarter, the company announced a dividend of $0.51 per share.
