LONDON -- SABMiller officials met with investors Friday to highlight its strength as an independent company, as the world's second-biggest brewer seeks to head off a takeover by larger rival Anheuser-Busch InBev.
SABMiller said the meetings focused on the company's accelerating growth and a stepped-up cost-cutting program that will target $1.05 billion of savings by March 2020, more than double the previous goal of $500 million by 2018.
"We are continuing to remove duplication across markets, bringing specialist expertise in areas like procurement under one roof, and standardizing common processes," Chief Executive Officer Alan Clark said in a statement. "It results in our markets being freed up to concentrate on what they do best -- growing revenue with local consumers and customers."
The announcement comes two days after SABMiller rejected a $104 billion takeover bid from Anheuser-Busch InBev, the Belgium-based company that makes Budweiser. The offer of $64.62 a share is 11 percent more than Anheuser-Busch InBev's initial proposal and 28 percent higher than SABMiller's stock price before the bid was announced Sept. 16.
Anheuser-Busch InBev is trying to create what it calls "the first truly global beer company" by combining its business, which is focused on the Americas and western Europe, with SABMiller's brands in Africa and eastern Europe. The deal would create a company with 31 percent of the global beer market.
Tensions surrounding the proposal have risen in recent days, with SABMiller Chairman Jan du Plessis saying Anheuser-Busch InBev was "very substantially undervaluing" his company.
In response, Anheuser-Busch InBev CEO Carlos Brito accused SABMiller's board of refusing "to meaningfully engage with us." On Thursday, he appealed directly to SABMiller shareholders, asking them to "voice their views" and not "let this opportunity slip away."
Altria Group, SABMiller's largest shareholder, said Thursday that it supports Anheuser-Busch InBev's offer and believes the merger "would create significant value." Altria, whose companies include cigarette-maker Phillip Morris USA, owns 27 percent of SABMiller.
Kulczyk Investments, the fifth-biggest investor in SABMiller, said Friday that it supports the brewer's decision to reject the offer, saying it doesn't reflect the takeover target's growth potential.
Some combination with Anheuser-Busch InBev could make strategic sense, but the bidder's current proposal is opportunistic, the firm said in an email. Kulczyk owns almost 3 percent of SABMiller.
Under British takeover rules, Anheuser-Busch has until Wednesday to make what is considered a formal offer for SABMiller or walk away for up to six months. Under British law, the proposals so far have not been considered formal offers.
On Friday, SABMiller said about 70 percent of the anticipated cost savings are expected to come from its procurement operations and the remaining 30 percent would come from its manufacturing and distribution arms.
"The measures we are announcing today are a continuation of our existing cost-saving program," Clark said in the statement.
"We are continuing to remove duplication across markets, bringing specialist expertise in areas like procurement under one roof, and standardizing common processes," he added. "It results in our markets being freed up to concentrate on what they do best -- growing revenue with local consumers and customers."
Information for this article was contributed by Danica Kirka of The Associated Press; by Chad Bray of The New York Times; and by Nick Turner of Bloomberg News.
Business on 10/10/2015