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Reuters: AB InBev to nominate JAB partner as chairman – sources

March 26, 2015
Food & Drink
(Reuters) – Anheuser-Busch InBev, the world’s largest brewer, is close to proposing JAB Holding Chief Executive Olivier Goudet as its next chairman, according to four sources familiar with the matter.
 
The ascent of Goudet, a Frenchman who has been on the AB InBev board since 2011, highlights the close ties between the associates of JAB and 3G Capital, two of the most important private investors in the global consumer goods industry. 3G Capital has four of its founding partners on the brewer’s board.
 
Goudet, a former Mars Inc CFO, would replace Dutchman Kees Storm whose term expires this year. He would bring expertise in operations and deal-making, both core to AB InBev, which has grown into the world’s largest brewer through a series of cross-border combinations over the years.
 
“When it comes to pursuing organic growth, he’s got a lot of expertise from his Mars days that I’m sure will be relevant but these guys don’t need any help when it comes to knowing how to do deals,” said Bernstein Research analyst Trevor Stirling.
 
Large mega-brewers are struggling with low growth in developed markets as weak economies curb consumer spending and many young drinkers choose cocktails or craft beers often made by independent brewers. They have raced to expand into new corners of emerging markets, where incomes are rising along with a thirst for alcoholic drinks.
 
Goudet’s nomination could occur in the coming days, said the sources, who declined to be identified as the matter is private.
 
A spokeswoman for AB InBev, maker of Budweiser and Stella Artois, declined to comment. Goudet also declined to comment through a spokesman.
 
Storm, who was born in 1942 and is also stepping down this year from his position on the board of consumer goods maker Unilever, was named to the board in 2002, becoming chairman in 2012. He replaced Peter Harf who also led JAB for decades.
 
‘INTERLINKING WORLD’
 
Since June 2012, Goudet, born in 1964, has been partner and CEO of JAB Holding, the investment vehicle of the billionaire Reimann family of Germany, which is in the process of forming the world’s largest standalone coffee company by combining the coffee business of Mondelez International with D.E Master Blenders 1753.
 
3G, which this week announced the roughly $46 billion takeover of Kraft Foods with U.S. investor Warren Buffett, and JAB have become more powerful in recent years, due to a string of large, successful deals.
 
“It’s created more capital for them to reinvest and it’s attracting capital from (other) families,” said Stirling. “It’s an interlinking world of oligarchs.”
 
Stirling and other analysts believe the Kraft deal makes the long-speculated takeover by AB InBev of SABMiller less likely in the near-term, given the overlap of management and resources between 3G and AB InBev.
 
“It’s unlikely they would have sufficient bandwidth to manage the integration of both Heinz/Kraft and ABI/SAB,” Stirling said.
 
JAB’s 2013 deal for D.E Master Blenders involved Alexandre Van Damme, an AB InBev board member with connections to one of AB InBev’s founding families, and Alejandro Santo Domingo, an SABMiller board member connected to the founding family of a brewer SABMiller now owns.
 
JAB’s owners are connected to UK consumer goods company Reckitt Benckiser, fragrance company Coty and shoe label Jimmy Choo.
 
3G’s founders have connections to the Brazilian family founders of AB InBev. Prior to this week’s Kraft deal, 3G and Buffett’s Berkshire Hathaway teamed up to finance the takeover of ketchup maker H.J. Heinz and Burger King’s takeover of Canadian coffee chain Tim Hortons.
 
By Martinne Geller and Olivia Oran (Editing by Anna Willard)

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