Interbrew and AmBev face market critics - Brief Article

Modern Brewery Age, March 15, 2004

Interbrew Chief Executive John Brock and AmBev's co-president of the board Marcel Telles met with analysts in New York last week to try to sell the market on the advantages of the $11.5 billion deal that will create the world's largest brewer.

Under the terms of the deal, as reported last week, Interbrew will own 57 percent of AmBev's capital and 85 percent of its voting shares through a complex equity swap, share issue and stock tender. The executives have been repeatedly calling the agreement an alliance, rather than a takeover. In Brazil and the U.S., the companies ran newspaper ads touting the deal.

Analysts have criticized the deal for the high price that Interbrew paid for AmBev, and the now large exposure Interbrew faces in the sometimes volatile South American market.

Interbrew CEO Brock insisted that the worldwide reach of the new company would counterbalance these potential negatives.

"Our platform ... is built on six of the seven-fastest growing beer markets in world, which taken together account for over three fourths of the expected world-wide volume growth over the next several years," Brock said.