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ANHEUSER-BUSCH INBEV SA/NV - Detailed terms announcement relating to the unwind of the current SAB Zenzele broad-based black economic empowerment

Release Date: 17/02/2020 08:00
Code(s): ANH     PDF:  
Wrap Text
Detailed terms announcement relating to the unwind of the current SAB Zenzele broad-based black economic empowerment

Anheuser-Busch InBev SA/NV
(Incorporated in the Kingdom of Belgium)
Register of Companies Number: 0417.497.106
Euronext Brussels Share Code: ABI
Mexican Stock Exchange Share Code: ANB
NYSE ADS Code: BUD
JSE Share Code: ANH
ISIN: BE0974293251
(“AB InBev”)

DETAILED TERMS ANNOUNCEMENT RELATING TO THE UNWIND OF THE CURRENT SAB
ZENZELE BROAD-BASED BLACK ECONOMIC EMPOWERMENT OWNERSHIP TRANSACTION
AND IMPLEMENTATION OF THE NEW SAB ZENZELE KABILI BROAD-BASED BLACK
ECONOMIC EMPOWERMENT OWNERSHIP TRANSACTION

Highlights
•    Current SAB Zenzele transaction unwind will deliver R9.7 billion to participants, the highest BEE
     value creation in the FMCG industry
•    SAB Zenzele retailer shareholders who invested R100 in 2010 will receive a pre-tax pay-out of
     c.R76,000 when the transaction unwinds shortly after 31 March 2020 maturity
•    A new BEE ownership transaction will be implemented through a new company called SAB
     Zenzele Kabili that will own R5.4 billion worth of AB InBev shares
•    SAB Zenzele Kabili will be listed on the BEE Segment of the JSE to facilitate liquidity and broaden
     ownership to other BEE investors, including qualifying SAB employees through a new ESOP
•    There will be substantial facilitation from SAB through discounted shares and vendor funding of a
     minimum term of 10-years
•    The transaction will be leveraged through vendor preference share funding at a highly cost-
     effective funding rate of 70% of prime


1.    INTRODUCTION AND BACKGROUND
      In 2010, SABMiller plc (through its South African subsidiary, The South African Breweries
      Proprietary Limited (“SAB”)) implemented a broad-based black economic empowerment (“BEE”)
      ownership transaction known as SAB Zenzele (“Existing Empowerment Transaction”).
      Amongst other things, the Existing Empowerment Transaction involved SAB issuing:
         •   approximately 3.52% of its total issued shares to SAB Zenzele Holdings Limited (“SAB
             Zenzele”), which in turn offered to issue ordinary shares in the share capital of SAB
             Zenzele to qualifying black people who were, at the time, retail liquor licence holders,
             retail liquor licence applicants or registered customers of ABI, which was at the time the
             soft drinks division of SAB (“SAB Zenzele Retailer Shareholders”);
         •   approximately 3.39% of its total issued shares to The SAB Zenzele Employee Trust
             (“Current ESOP”), which holds such shares for the benefit of certain qualifying employees
             of SAB and its subsidiaries and associated companies; and
         •   approximately 1.54% of its total issued shares to The SAB Foundation.
      The Existing Empowerment Transaction is due to unwind shortly after its 31 March 2020 maturity
      in accordance with the amended agreements entered into following the combination of SABMiller
      plc and Anheuser-Busch Inbev SA/NV (“AB InBev”) in 2016. Participants in the Existing
      Empowerment Transaction will receive R9.7 billion worth of ordinary shares in the share capital
      of AB InBev (“AB InBev Shares”), or the cash proceeds from the disposal of such AB InBev
      Shares (less associated taxes and costs), as determined in accordance with the formula set out
      in the aforementioned agreements.

                                                   1

SAB has received consistent feedback from the SAB Zenzele Retailer Shareholders that they
wish to be provided with an opportunity to re-invest some or all of the value to which they will be
entitled to on the unwind of the Existing Empowerment Transaction.

Accordingly, AB InBev is proposing, in conjunction with the contemplated unwind of the Existing
Empowerment Transaction, the implementation of a new R5.4 billion BEE ownership transaction
(“New Empowerment Transaction”) through a new company called SAB Zenzele Kabili
Holdings (RF) Limited (“SAB Zenzele Kabili”). Participants in the New Empowerment
Transaction will include the SAB Zenzele Retailer Shareholders, beneficiaries of the Current
ESOP that choose to re-invest, The SAB Foundation and qualifying employees of SAB through
a new employment share option plan (“New ESOP”).

As part of unwinding the Existing Empowerment Transaction and facilitating the implementation
of the New Empowerment Transaction, the board of directors of SAB Zenzele (“SAB Zenzele
Board”) has resolved that the most efficient and effective way to facilitate the principal further re-
investment by the c.29,000 SAB Zenzele Retailer Shareholders in the New Empowerment
Transaction, is through a scheme of arrangement in terms of section 114 of the Companies Act,
No 71 of 2008, as amended (“Companies Act”), (“SAB Zenzele Scheme”), proposed between
SAB Zenzele and the SAB Zenzele Retailer Shareholders. SAB Zenzele has accordingly
concluded a transaction implementation agreement with, amongst others, AB InBev, SAB and
SAB Zenzele Kabili, setting out the terms and conditions on which the New Empowerment
Transaction will be implemented.

The SAB Zenzele Scheme constitutes an “affected transaction” as defined in section 117(1)(c)(iii)
of the Companies Act, and as such, the SAB Zenzele Scheme is regulated by the Companies Act
and applicable Takeover Regulations (contained in Chapter 5 of the Companies Regulations,
2011) (“Takeover Regulations”).

In connection with proposing the SAB Zenzele Scheme and convening the relevant shareholders’
meeting to approve the special resolutions required to approve implementation of the SAB
Zenzele Scheme (“Shareholders’ Meeting”), SAB Zenzele has prepared a circular to its
shareholders in accordance with the relevant disclosure requirements under the Companies Act
and the applicable Takeover Regulations, which circular incorporates a notice convening the
relevant Shareholders’ Meeting for purposes of proposing for approval the relevant resolutions
required to implement the SAB Zenzele Scheme, and providing SAB Zenzele Retailer
Shareholders with the necessary statutorily-required information regarding the SAB Zenzele
Scheme (“SAB Zenzele Scheme Circular”). The SAB Zenzele Scheme Circular will be posted
to SAB Zenzele Retailer Shareholders on 19 February 2020, and will also be available on SAB
Zenzele’s website, http://www.sab.co.za/sab-zenzele.

If the SAB Zenzele Scheme becomes operative, each SAB Zenzele Retailer Shareholder will
have ceded 15% of its entitlements to receive AB InBev Shares under the Existing Empowerment
Transaction (such full entitlements, the “Settlement Entitlements”) to SAB Zenzele Kabili in
exchange for ordinary shares in the share capital of SAB Zenzele Kabili (“SAB Zenzele Kabili
Ordinary Shares”) of proportional value (“Scheme Consideration”).

In addition, SAB Zenzele Kabili will make an offer to SAB Zenzele Retailer Shareholders and the
beneficiaries of the Current ESOP (“Qualifying Investors”) to re-invest all or a further portion of
their Settlement Entitlement (subject to certain parameters described below and, in the case of
SAB Zenzele Retailer Shareholders, after taking into account the 15% of the Settlement
Entitlements re-invested through the SAB Zenzele Scheme (such 15% of the full entitlements,
the “Scheme Entitlements”)), into SAB Zenzele Kabili (“Reinvestment Offer”) in exchange for
further SAB Zenzele Kabili Ordinary Shares of proportional value.

Simultaneously with, or shortly after the implementation of the SAB Zenzele Scheme, SAB
Zenzele Kabili will be listed on the BEE Segment of the JSE, to create liquidity and allow trading
of SAB Zenzele Kabili Ordinary Shares from the outset with other BEE investors (“BEE Listing”).
In connection with the Reinvestment Offer and the BEE Listing, SAB Zenzele Kabili has prepared
a prospectus in compliance with the applicable substance and form requirements for a prospectus
set out in the Companies Act and the Companies Regulations, 2011 and applicable pre-listing
statement requirements of the JSE Limited (“JSE Listings Requirements”) (“SAB Zenzele
Kabili Prospectus”).


                                               2

2.   SALIENT DETAILS OF THE UNWIND OF THE EXISTING EMPOWERMENT TRANSACTION
     If the SAB Zenzele Scheme becomes operative, Qualifying Investors will have the opportunity to
     re-invest all or a portion of their Settlement Entitlements into SAB Zenzele Kabili, subject to
     certain parameters described below. In respect of the remaining Settlement Entitlements (after
     taking into account any portion thereof which is ceded to SAB Zenzele Kabili pursuant to the SAB
     Zenzele Scheme and/or the Reinvestment Offer), each Qualifying Investor will be entitled to elect
     to be settled as follows (“Settlement Election”):
           •   cash, whereby their remaining Settlement Entitlements will be sold on their behalf and they
               will receive the cash proceeds arising from such sale, less associated taxes and costs
               (“Sale Proceeds Settlement”); and/or
           •   AB InBev Shares, whereby the remaining Settlement Entitlements will be settled in AB
               InBev Shares (“AB InBev Shares Settlement”).
      The SAB Zenzele Board wishes to draw to the attention of the SAB Zenzele Retailer
      Shareholders that their right to receive the Sale Proceeds Settlement and/or the AB InBev
      Shares Settlement (depending on their election) upon unwind of the Existing Empowerment
      Transaction is not conditional on the approval of the SAB Zenzele Scheme, save that if the
      relevant resolutions are not approved, SAB Zenzele Retailer Shareholders who are entitled to
      less than 100 AB InBev Shares upon the unwind of the Existing Empowerment Transaction will,
      consistent with the current memorandum of incorporation of SAB Zenzele (“SAB Zenzele MOI”),
      be deemed to have elected the Sale Proceeds Settlement.
      Although the entitlement to the AB InBev Shares upon the unwind of the Existing Empowerment
      Transaction (and by necessary extension the Settlement Election) is not conditional on the SAB
      Zenzele Scheme becoming operative, the value of the AB InBev Shares that each Qualifying
      Investor is entitled to is contingent on the SAB Zenzele Scheme and the Reinvestment Offer.
      Accordingly, the following two scenarios will impact on how the Settlement Election is applicable
      to a Qualifying Investor:
     I.        if the SAB Zenzele Scheme is approved and the New Empowerment Transaction, which
               includes the Reinvestment Offer, is implemented:
               •   If you are a SAB Zenzele Retailer Shareholder, your Scheme Entitlement (being 15%
                   of your full Settlement Entitlement) will be automatically ceded to SAB Zenzele Kabili
                   under the SAB Zenzele Scheme and you will be left with 85% of your Settlement
                   Entitlement, minus whatever portion thereof you elect to re-invest into SAB Zenzele
                   Kabili under the Reinvestment Offer (if any); or
               •   If you are a beneficiary of the Current ESOP, you will be entitled to elect the Sale
                   Proceeds Settlement or the AB InBev Shares Settlement in respect of 100% of your
                   Settlement Entitlement minus whatever portion thereof you elect to re-invest into SAB
                   Zenzele Kabili under the Reinvestment Offer (if any).
     II.       if the SAB Zenzele Scheme is not approved and the New Empowerment Transaction, which
               includes the Reinvestment Offer, is not implemented:
               The Existing Empowerment Transaction will unwind in accordance with its terms. In
               particular, you will receive the full Settlement Entitlement that you are entitled to receive
               under the Existing Empowerment Transaction (in accordance with your Settlement
               Election) and you will not have the opportunity to re-invest all or part of their Settlement
               Entitlement in the New Empowerment Transaction.
               For the avoidance of doubt, consistent with the terms of the SAB Zenzele MOI, if the
               relevant shareholder resolutions are not approved, a SAB Zenzele Retailer Shareholder
               who is entitled to less than 100 AB InBev Shares on the unwind of the Existing
               Empowerment Transaction shall only be entitled to receive the cash proceeds (less
               associated taxes and costs) arising from a sale of those AB InBev Shares pursuant to the
               unwind of the Existing Empowerment Transaction.


                                                      3

3.   SALIENT DETAILS OF THE NEW EMPOWERMENT TRANSACTION

3.1   SUMMARY OF KEY ELEMENTS
      AB InBev and SAB intend to implement the New Empowerment Transaction, subject to the
      SAB Zenzele Scheme becoming operative, through the establishment of SAB Zenzele Kabili,
      by means of the following key elements:
      •   each SAB Zenzele Retailer Shareholder will re-invest their Scheme Entitlement (being
          15% of their full Settlement Entitlement) into SAB Zenzele Kabili in exchange for SAB
          Zenzele Kabili Ordinary Shares of proportional value in terms of the SAB Zenzele Scheme,
          as described in greater detail in paragraph 3.2 below;
      •   offering (i) the beneficiaries of the Current ESOP the ability to re-invest all or a portion of
          their Settlement Entitlement, subject to certain parameters described below, in exchange
          for SAB Zenzele Kabili Ordinary Shares of proportional value; and (ii) SAB Zenzele
          Retailer Shareholders the ability to re-invest all or a portion of their remaining Settlement
          Entitlement (subject to certain parameters described below and after taking into account
          the Scheme Entitlement ceded to SAB Zenzele Kabili pursuant to the SAB Zenzele
          Scheme) into SAB Zenzele Kabili in exchange for SAB Zenzele Kabili Ordinary Shares of
          proportional value, in terms of the Reinvestment Offer described in greater detail in
          paragraph 3.3 below;
      •   SAB will contribute the equivalent of R600 million worth of AB InBev Shares to SAB
          Zenzele Kabili on behalf of the New ESOP;
      •   SAB will contribute the equivalent of R120 million worth of AB InBev Shares to the New
          ESOP. The New ESOP will sell these AB InBev Shares and use the proceeds to acquire
          SAB Zenzele Kabili Ordinary Shares from those SAB Zenzele Retailer Shareholders who
          voted against the SAB Zenzele Scheme and wish to dispose of their SAB Zenzele Kabili
          Ordinary Shares or, failing that, to acquire further SAB Zenzele Kabili Ordinary Shares in
          the market;
      •   The SAB Foundation has committed to re-invest into SAB Zenzele Kabili the equivalent of
          up to R400 million worth of AB InBev Shares (c. 21% of its Settlement Entitlement), of
          which R344 million will be used upon listing to acquire SAB Zenzele Kabili Ordinary
          Shares. The balance will be used to acquire SAB Zenzele Kabili Ordinary Shares from
          SAB Zenzele Retailer Shareholders who voted against the SAB Zenzele Scheme and wish
          to dispose of their SAB Zenzele Kabili Ordinary Shares or, failing that, to acquire additional
          SAB Zenzele Kabili Ordinary Shares in the market;
      •   SAB will contribute the equivalent of R2 973 million worth of AB InBev Shares to SAB
          Zenzele Kabili, and in return SAB Zenzele Kabili will issue preference shares to SAB,
          representing vendor funding of R2 973 million; and
      •   SAB will contribute the equivalent of R811 million worth of AB InBev Shares (as at 31
          March 2020) at no further cost to SAB Zenzele Kabili (“Discount Shares”) to further
          enhance the capital structure of SAB Zenzele Kabili.

       SAB Zenzele Kabili has sufficient authorised but unissued SAB Zenzele Kabili Ordinary
       Shares to settle the various components of the New Empowerment Transaction as described
       above.

3.2    THE SAB ZENZELE SCHEME
       In terms of the SAB Zenzele Scheme, SAB Zenzele Kabili as offeror, will acquire the Scheme
       Entitlements (being 15% of the full Settlement Entitlements) from the SAB Zenzele Retailer
       Shareholders for the Scheme Consideration. The operation of the SAB Zenzele Scheme is
       subject to the fulfillment or, where appropriate, waiver, of the conditions precedent as
       described in paragraph 5.1 below.
       If the SAB Zenzele Scheme becomes operative it will be binding on all the SAB Zenzele
       Retailer Shareholders (irrespective of whether a SAB Zenzele Retailer Shareholder voted in
       favour of the Scheme or not) and:


                                                 4

•   each SAB Zenzele Retailer Shareholder will be deemed, with effect from the
    implementation date of the SAB Zenzele Scheme, to have ceded its Scheme Entitlements
    (and disposed of the AB InBev Shares underlying the Scheme Entitlements), free and
    clear of encumbrances, to SAB Zenzele Kabili;
•   SAB Zenzele Kabili will be deemed to have acquired all the Scheme Entitlements (and
    the registered and beneficial ownership of the AB InBev Shares underlying the Scheme
    Entitlements) without any further act or instrument being required, for the Scheme
    Consideration; and
•   each SAB Zenzele Retailer Shareholder who will have become entitled to less than 100
    AB InBev Shares upon the unwind of the Existing Empowerment Transaction and
    consequently will have received a cash settlement pursuant to the sale of such AB InBev
    Shares in accordance with the transaction terms will be deemed, with effect from the
    implementation date of the SAB Zenzele Scheme, to have waived its rights to be cash
    settled and shall be deemed to have consented to a settlement pursuant to the terms of
    the SAB Zenzele Scheme.

In consideration for the cession of the Scheme Entitlements, each SAB Zenzele Retailer
Shareholder will be entitled to receive the Scheme Consideration (being such number of SAB
Zenzele Kabili Shares as are proportional to the Scheme Entitlements ceded by such SAB
Zenzele Retailer Shareholders to SAB Zenzele Kabili under the SAB Zenzele Scheme),
subject to the terms and conditions of the SAB Zenzele Scheme Circular.

SAB Zenzele Retailer Shareholders are advised to refer to the SAB Zenzele Scheme Circular
for the full terms and conditions of the SAB Zenzele Scheme.

3.3  THE REINVESTMENT OFFER AND BEE LISTING
In the event the SAB Zenzele Scheme becomes operative, SAB Zenzele Retailer
Shareholders will have the ability to re-invest all or a portion of their remaining Settlement
Entitlement (subject to certain parameters described below and after taking into account the
15% ceded to SAB Zenzele Kabili pursuant to the SAB Zenzele Scheme) into SAB Zenzele
Kabili in exchange for additional SAB Zenzele Kabili Ordinary Shares of proportional value
pursuant to the Reinvestment Offer. Furthermore, beneficiaries of the Current ESOP have the
ability to re-invest all or a portion of their Settlement Entitlement, subject to certain parameters
described below, in exchange for SAB Zenzele Kabili Ordinary Shares of proportional value.
The number of SAB Zenzele Kabili Ordinary Shares being offered by SAB Zenzele Kabili
pursuant to the Reinvestment Offer is capped at 8.6 million SAB Zenzele Kabili Ordinary
Shares or an aggregate Rand amount of R344 million. Accordingly, it is possible that a SAB
Zenzele Retailer Shareholder who applies for SAB Zenzele Kabili Ordinary Shares pursuant
to the Reinvestment Offer may not be allocated the full number of SAB Zenzele Kabili Ordinary
Shares that they applied for. Further details of these allocation principles will be set out in the
SAB Zenzele Kabili Prospectus.
Simultaneously with, or shortly after, implementation of the SAB Zenzele Scheme, SAB
Zenzele Kabili will be listed on the BEE Segment of the JSE pursuant to the BEE Listing,
thereby facilitating trading and liquidity for the participants of the New Empowerment
Transaction who wish to, and are entitled to, trade their SAB Zenzele Kabili Ordinary Shares.
In this respect, the JSE has granted SAB Zenzele Kabili, subject to the SAB Zenzele Scheme
becoming operative, a listing on the BEE Segment of the JSE, under share code “SZK”, ISIN
code ZAE000284196 and the abbreviated name SAB Zenzele Kabili with effect from the
commencement of business on Wednesday, 15 April 2020.




                                            5

        For this purpose, the SAB Zenzele Kabili Prospectus, which provides additional details of the
        New Empowerment Transaction, the Reinvestment Offer and the BEE Listing will be issued
        and sent to the Qualifying Investors on 19 February 2020 and will also accompany the SAB
        Zenzele Scheme Circular, which will be posted to SAB Zenzele Retailer Shareholders on 19
        February 2020. The SAB Zenzele Prospectus will also be available on SAB Zenzele Kabili’s
        website, www.investecsps.co.za.

3.4     FUNDING THE NEW EMPOWERMENT TRANSACTION
        The table below sets out the sources and uses of funding to establish the New Empowerment
        Transaction:
           Sources of funding                                                                     Rm                    %
           Discount Shares                                                                        811                15.0
           Equity contribution – SAB Zenzele Retailer Shareholders                                678                12.5
           Equity contribution by SAB - New ESOP1                                                 600                11.1
           Equity contribution – The SAB Foundation2                                              344                  6.4
           Vendor funding from SAB                                                             2 973                 55.0
           Total                                                                               5 406                  100
           Uses of funding                                                                        Rm                    %
           Acquisition of AB InBev Shares                                                      5 406                  100
           Total                                                                               5 406                  100
      Notes:

      1.    SAB will make a contribution of R720 million to the New ESOP, of which R600 million will be utilised to acquire
            SAB Zenzele Kabili Ordinary Shares. The balance of the contribution will be used by the New ESOP to: (i) acquire
            SAB Zenzele Kabili Ordinary Shares from SAB Zenzele Retailer Shareholders who voted against the SAB Zenzele
            Scheme and wish to dispose of their SAB Zenzele Kabili Ordinary Shares; or (ii) acquire further SAB Zenzele
            Kabili Ordinary Shares in the market; and
      2.    The SAB Foundation has committed to re-invest up to R400 million, of which R344 million will be used upon listing
            to acquire SAB Zenzele Kabili Ordinary Shares. The balance will be used to: (i) acquire SAB Zenzele Kabili
            Ordinary Shares from SAB Zenzele Retailer Shareholders who voted against the SAB Zenzele Scheme and wish
            to dispose of their SAB Zenzele Kabili Ordinary Shares; or (ii) acquire additional SAB Zenzele Kabili Ordinary
            Shares in the market.

4.   ILLUSTRATIVE EXAMPLE OF THE IMPACT OF THE SAB ZENZELE SCHEME ON SAB
     ZENZELE RETAILER SHAREHOLDERS
     In order to enable SAB Zenzele Retailer Shareholders to assess the impact of the SAB Zenzele
     Scheme and broader participation in the New Empowerment Transaction and understand the
     proportional value to be received pursuant to the SAB Zenzele Scheme and any participation in
     the Reinvestment Offer, the worked example below has been prepared for illustrative purposes
     only.
     The worked examples below illustrate the impact of the SAB Zenzele Scheme on a SAB Zenzele
     Retailer Shareholder that invested R100 or R2 500 in 2010. SAB Zenzele Kabili Ordinary Shares
     will be issued at a subscription price of R40 per share. The number of SAB Zenzele Kabili
     Ordinary Shares to be issued to a SAB Zenzele Retailer Shareholder will be determined by
     dividing the 15% Scheme Entitlement by the R40 subscription price.




                                                            6

The worked examples are based on reasonable assumptions and estimates as set out below.

 Example 1 – SAB Zenzele Retailer Shareholder that invested R100 in 2010

 Before the SAB Zenzele Scheme / if the SAB Zenzele Scheme is unsuccessful

                                                 Sale Proceeds          AB InBev Shares
                                                  Settlement              Settlement

  Amount invested in 2010                            R 100                   R 100

  Number of SAB Zenzele shares
  acquired in 2010                                     317                    317

  Value at unwind date1                             R 76 738                R 76 738

  •  Reinvested into SAB Zenzele       0%              R0                     R0
     Kabili2
  • Distributed to SAB Zenzele        100%          R 76 738                R 76 738
     Retailer Shareholders3
  SAB Zenzele Kabili Ordinary                           -                       -
  Shares received4

  AB InBev Shares received5                             -                      69

  Value received                                    R 76 738                R 76 738

  •   Value of SAB Zenzele Kabili                      R0                     R0
      Ordinary Shares7
                                                       R0                   R 76 704
  •   Value of AB InBev Shares8
                                                    R 76 738                  R 34
  •   Cash9


 After the SAB Zenzele Scheme / if the SAB Zenzele Scheme is successful

                                                 Sale Proceeds          AB InBev Shares
                                                  Settlement              Settlement

  Amount invested in 2010                            R 100                   R 100

  Number of SAB Zenzele shares
  acquired in 2010                                    317                     317

  Value at unwind date1                             R 76 738                R 76 738

  •  Reinvested into SAB              15%           R11 511                 R11 511
     Zenzele Kabili2, 6
  • Distributed to SAB Zenzele        85%           R65 227                 R65 227
     Retailer Shareholders3
  SAB Zenzele Kabili Ordinary                         287                     287
  Shares received4

  AB InBev Shares received5                             -                      58

  Value received                                    R 82 478                R 82 478

  •   Value of SAB Zenzele Kabili                   R 17 220                R 17 220
      Ordinary Shares7
                                                      R0                    R 64 476
  •   Value of AB InBev Shares8
                                                    R 65 258                  R782
  •   Cash9

                                         7
Example 2 – SAB Zenzele Retailer Shareholder that invested R2 500 in 2010

Before the SAB Zenzele Scheme / If the SAB Zenzele Scheme is unsuccessful

                                              Sale Proceeds         AB InBev Shares
                                               Settlement             Settlement

Amount invested in 2010                          R 2 500                  R 2 500

Number of SAB Zenzele shares
acquired in 2010                                   634                       634

Value at unwind date1                           R 153 476                R 153 476

•  Reinvested into SAB Zenzele      0%              R0                       R0
   Kabili2
• Distributed to SAB Zenzele       100%         R153 476                 R153 476
   Retailer Shareholders3
SAB Zenzele Kabili Ordinary
Shares received4                                       -                      -

AB InBev Shares received5                              -                     138

Value received                                  R 153 476                R 153 476

•   Value of SAB Zenzele Kabili                    R0                        R0
    Ordinary Shares7
                                                   R0                    R 153 408
•   Value of AB InBev Shares8
                                                R 153 476                   R 68
•   Cash9


After the SAB Zenzele Scheme / If the SAB Zenzele Scheme is successful

                                             Sale Proceeds         AB InBev Shares
                                              Settlement             Settlement

Amount invested in 2010                         R 2 500                   R 2 500

Number of SAB Zenzele shares
acquired in 2010                                  634                       634

Value at unwind date1                          R 153 476                 R 153 476

•  Reinvested into SAB             15%          R23 021                  R23 021
   Zenzele Kabili2, 6
• Distributed to SAB Zenzele       85%         R130 455                  R130 455
   Retailer Shareholders3
SAB Zenzele Kabili Ordinary
Shares received4                                  575                       575

AB InBev Shares received5                          -                        117

Value received                                 R 164 976                 R 164 976

•   Value of SAB Zenzele Kabili                 R 34 500                 R 34 500
    Ordinary Shares7
                                                  R0                     R 130 063
•   Value of AB InBev Shares8
                                               R 130 476                    R413
•   Cash9

                                      8
Notes and assumptions:

1.  Current unwind value calculated based on the provisions of the Amended and Restated Exchange Agreement between AB
    InBev, SAB, SABMiller plc, SAB Zenzele, the Current ESOP and The SAB Foundation using a fixed price of GBP45 per
    SABMiller plc share, adjusted for inflation over time and reduced by the: (i) notional funding repaid as per the repurchase
    mechanism, (ii) R625m upfront special dividend paid in November 2016, (iii) R76m Distell disposal dividend paid in May
    2017 and (iv) R312m CCBA disposal dividend paid in December 2017.
2. Current unwind value multiplied by reinvestment percentage
3. Current unwind value less reinvestment into SAB Zenzele Kabili. SAB Zenzele Retailer Shareholder given election on how
    the balance of the Settlement Entitlement is delivered (i.e. cash proceeds of sale of AB InBev Shares on the open market
    (less associated taxes and costs) or AB InBev Shares)
4. Reinvested value divided by SAB Zenzele Kabili issue price of R40 per SAB Zenzele Kabili Ordinary Share
5. Distributed value divided by an assumed AB InBev market value of R1 112 per AB InBev Share (where applicable)
6. Regardless of election
7. SAB Zenzele Kabili Ordinary Shares received multiplied by SAB Zenzele Kabili net asset value of R60 per SAB Zenzele
    Kabili Ordinary Share. For every R1.00 of equity invested by a SAB Zenzele Retailer Shareholder, SAB will contribute R0.50
    in the form of an incentive discount
8. AB InBev Shares received multiplied by an assumed AB InBev market value of R1 112 per AB InBev Share
9. Unwind value less value of AB InBev Shares received
10. The above is before taxes and other related transaction costs and expenses


5.     CONDITIONS PRECEDENT

5.1          THE SAB ZENZELE SCHEME
             The implementation of the SAB Zenzele Scheme is subject to the fulfilment or, where
             appropriate, waiver of the following conditions (“Scheme Conditions”), which must be fulfilled
             (or deemed fulfilled), or where appropriate, waived, on or before 17:00 on Friday, 3 April 2020
             (“Long Stop Date”), (or such later time and/or date as may be agreed in writing between SAB
             and SAB Zenzele (and approved by the Takeover Regulation Panel (“TRP”)) (“Extended
             Long Stop Date”):
        I.     the approval of certain amendments to the SAB Zenzele MOI by the requisite majority of
               votes of the SAB Zenzele Retailer Shareholders, as required in terms of section 16(1)(c) of
               the Companies Act, as will be described in more detail in the Notice of Shareholder Meeting
               in the SAB Zenzele Scheme Circular;
       II.     the approval of the Scheme by the requisite majority of votes of the SAB Zenzele Retailer
               Shareholders, as required in terms of section 114(1) and section 115(2)(a) of the
               Companies Act (“Scheme Resolution”), as will be described in more detail in the Notice
               of Shareholder Meeting contained in the SAB Zenzele Scheme Circular;
      III.     the receipt of unconditional approvals, consents or waivers from all applicable regulatory
               authorities as may be required in order to implement the SAB Zenzele Scheme and the
               BEE Listing, including, but not limited to, approvals from the TRP (including the compliance
               certificate to be issued by the TRP in relation to the SAB Zenzele Scheme as required by
               section 115(1)(b) read with section 119(4)(b) and section 121(b) of the Companies Act) and
               the JSE, and, to the extent that any such approvals, consents or waivers are subject to
               conditions, in each case on terms and conditions reasonably satisfactory to SAB Zenzele
               Kabili and SAB Zenzele;
      IV.      the Scheme Resolution not being opposed by 15% or more of the voting rights exercised
               on such resolution; or should the Scheme Resolution be opposed by 15% or more of the
               voting rights exercised on it:
                    a. no person who voted against the Scheme Resolution requiring SAB Zenzele to
                       seek the approval of the Court in terms of section 115(3) of the Companies Act; or
                    b. if a person who voted against the Scheme Resolution requires SAB Zenzele to
                       seek the approval of the Court in terms of section 115(3) of the Companies Act,
                       then:
                               i. the SAB Zenzele Scheme being approved by the Court unconditionally, or
                                  if subject to conditions, the person on whom such conditions are imposed
                                  approves such conditions and undertakes in writing to comply therewith;
                                  and



                                                              9

                          ii. SAB Zenzele not treating the Scheme Resolution as a nullity in terms of
                              section 115(5)(b) of the Companies Act;
      V.     no leave is granted by the Court, pursuant to section 115(3)(b) of the Companies Act, to
             any person who voted against the Scheme Resolution and who applied to the Court for a
             review of the Scheme; and
     VI.     with regard to any SAB Zenzele Retailer Shareholders exercising appraisal rights, within
             the period prescribed under section 164(7) of the Companies Act, no valid demands having
             been received by, or remain capable of being given to, SAB Zenzele in terms of such
             section which in aggregate represent more than 5% of the SAB Zenzele shares in issue.
           The Scheme Conditions set out in (I) to (V) above (both inclusive) are not capable of waiver.
           The Scheme Condition set out in (VI) is for the benefit of SAB Zenzele. SAB Zenzele is entitled
           at any time prior to the Long Stop Date, or the Extended Long Stop Date, to waive compliance
           with such Scheme Condition. An announcement will be published in the South African press
           as soon as possible after the fulfilment, waiver or non-fulfilment, as the case may be, of the
           Scheme Conditions.
           For the avoidance of doubt, if the Scheme Conditions are not fulfilled or waived (to the extent
           possible) by the Long Stop Date, or the Extended Long Stop Date, then the SAB Zenzele
           Scheme will not become operative and the New Empowerment Transaction will not proceed.
           Consequently, Qualifying Investors will continue in their present position as participants in the
           Existing Empowerment Scheme, which will unwind in accordance with its terms. In particular,
           Qualifying Investors will receive their full Settlement Entitlement and they will not have the
           benefit of re-investing all or part of it as contemplated under the New Empowerment
           Transaction.

5.2        THE NEW EMPOWERMENT TRANSACTION
           The implementation of the balance of the New Empowerment Transaction, including the BEE
           Listing, is subject to the suspensive condition that the SAB Zenzele Scheme becomes
           unconditional and operative.

6.    SALIENT DATES AND TIMES
      Set out below are the salient dates and times pertaining to the SAB Zenzele Scheme:

                                                                                                               2020
Posting record date for purposes of receiving the SAB Zenzele Scheme Circular                 Friday, 14 February
Terms announcement published in the South African press                                     Tuesday, 18 February

SAB Zenzele Scheme Circular posted to SAB Zenzele Retailer Shareholders                 Wednesday, 19 February

Record date for attending and voting at the Shareholders’ Meeting                                Friday, 13 March
Last day and time to give notice to participate in the Shareholders’ Meeting                   Monday, 16 March
electronically by 10:00 on

For administrative purposes, form of proxy (pink) for Shareholders’ Meeting                   Tuesday, 17 March
should be received by 10:00 on

Last day for any SAB Zenzele Retailer Shareholders to deliver a written notice to             Thursday, 19 March
SAB Zenzele objecting to the Scheme Resolution in accordance with section
164(3) of the Companies Act by 10:00 on


Shareholders’ Meeting held at Johannesburg Expo Centre, in Nasrec at 10:00 on                 Thursday, 19 March


Results of Shareholders’ Meeting published in South African press                          Wednesday, 25 March



                                                     10

If the SAB Zenzele Scheme is duly approved by SAB Zenzele Retailer Shareholders at the
Shareholders’ Meeting:
Last date for SAB Zenzele Retailer Shareholders who voted against the SAB                      Thursday, 26 March
Zenzele Scheme to require SAB Zenzele to seek Court approval for the SAB
Zenzele Scheme in terms of section 115(3)(a) of the Companies Act, if the
Scheme Resolution was opposed by at least 15% of the voting rights that were
exercised



Last date for SAB Zenzele Retailer Shareholders who voted against the Scheme                        Thursday, 2 April
Resolution to be granted leave by a Court to apply for a review of the SAB
Zenzele Scheme in terms of section 115(3)(b) of the Companies Act



Last date for SAB Zenzele to give notice of adoption of the Scheme Resolution                      Thursday, 2 April
(in terms of section 115 of the Companies Act) approving the SAB Zenzele
Scheme in terms of section 164(4) of the Companies Act to SAB Zenzele Retailer
Shareholders who delivered written notices to SAB Zenzele objecting to the
relevant special resolution in accordance with section 164 of the Companies Act


If no SAB Zenzele Retailer Shareholders exercise their rights in terms of section 115(3) of the
Companies Act and all the Scheme Conditions are satisfied:

Expected date for TRP compliance certificate delivered in terms of section 121(b)                     Friday, 3 April
of the Companies Act

Election due date on which SAB Zenzele Retailer Shareholders’ must deliver their                      Friday, 3 April
Settlement Election to SAB Zenzele by 12:00 on

Expected SAB Zenzele Scheme record date, being the date and time on which                          Tuesday, 7 April
SAB Zenzele Retailer Shareholders’ must be recorded in the register to receive
the Scheme Consideration, which is expected to be by 17:00 on

SAB Zenzele Scheme implementation date expected to be                                          Wednesday, 15 April

SAB Zenzele Kabili expected to have AB InBev Shares (underlying the Scheme                     Wednesday, 15 April
Entitlements) credited to its nominated dematerialised securities account

Expected date on which SAB Zenzele Retailer Shareholders having elected the                    Wednesday, 15 April
Sale Proceeds Settlement, will have their bank accounts settled

Listing of SAB Zenzele Kabili expected from commencement of trade                              Wednesday, 15 April

Scheme Qualifying Investors expected to receive Scheme Consideration, being                    Wednesday, 15 April
the date on which SAB Zenzele Kabili Ordinary Shares (and/or additional SAB
Zenzele Kabili Ordinary Shares pursuant to the Reinvestment Offer) are credited
to dematerialised accounts opened with the SAB Zenzele Kabili adminsitrator or
their brokerage accounts

Notes:
1.   All times shown in this announcement are South African Standard Time, unless otherwise stated;
2.   The above dates and times are subject to amendment. Any material amendment will be published in the South
     African press;


                                                     11

3.   If the Shareholders’ Meeting is adjourned or postponed, forms of proxy submitted for the Shareholders’
     Meeting will remain valid in respect of any adjournment or postment of the Shareholders’ Meeting, unless the
     contrary is stated on the relevant form of proxy; and
4.   To the extent that a form of proxy is not received by 10:00 on Tuesday, 17 March 2020, as envisaged in the
     table above, the form of proxy may be handed to the chairperson of the Shareholders’ Meeting, prior to the
     commencement of the meeting.

7.     INDEPENDENT EXPERT REPORT AND SAB ZENZELE BOARD RECOMMENDATION
       BDO Corporate Finance Proprietary Limited ("Independent Expert”) has been appointed as the
       independent expert by the SAB Zenzele Board, to assess the terms and conditions of the SAB
       Zenzele Scheme as well as the Scheme Consideration as required in terms of section 114 of the
       Companies Act and Regulation 90 and 110 of the Companies Regulations (“Independent Expert
       Report”).

       Having considered the terms and conditions of the SAB Zenzele Scheme and based upon and
       subject to the terms and conditions set out in the Independent Expert Report, the Independent
       Expert is of the opinion that the SAB Zenzele Scheme and Scheme Consideration are fair and
       reasonable to the SAB Zenzele Retailer Shareholders.

       SAB Zenzele has constituted an independent board (“Independent Board”), comprised of Mr.
       PM Maduna, Mr. SL Mbatha and Mr. J Awbrey, being the directors that SAB Zenzele has
       indicated are independent directors as envisaged in Regulation 81 of the Companies
       Regulations.
       The Independent Board has considered the terms and conditions of the SAB Zenzele Scheme
       and, taking into account the Independent Expert Report, is of the opinion that the terms and
       conditions of the Scheme are both fair and reasonable to SAB Zenzele Retailer Shareholders
       and recommends that SAB Zenzele Retailer Shareholders vote in favour of the SAB Zenzele
       Scheme at the Shareholders’ Meeting.

8.     MEETING OF SAB ZENZELE RETAILER SHAREHOLDERS
       The SAB Zenzele Scheme Circular will be posted to SAB Zenzele Retailer Shareholders on
       19 February 2020 (and will also be available on SAB Zenzele’s website, www.sab.co.za/sab-
       zenzele), and contains the notice to convene the relevant Shareholders’ Meeting to be held at
       Johannesburg Expo Centre, Corner Nasrec and Randshow Roads at 10:00 (South African
       Standard Time) on Thursday, 19 March 2020 for the purpose of considering and, if deemed fit,
       passing with or without modification, the relevant special resolutions required to implement the
       SAB Zenzele Scheme, as described in more detail in paragraph 5 above and in the SAB Zenzele
       Scheme Circular.

9.     DIRECTORS’ RESPONSIBILITY STATEMENT
       The SAB Zenzele Board individually and collectively accept full responsibility for the accuracy of
       the information contained in this announcement to the extent that it relates solely to SAB Zenzele.
       In addition, the SAB Zenzele Board certifies that to the best of its knowledge and belief, the
       information contained in this announcement solely pertaining to SAB Zenzele is true and, where
       appropriate, does not omit anything that is likely to affect the importance of the information
       contained herein solely pertaining to SAB Zenzele, and that all reasonable enquiries to ascertain
       such information has been made.

       The members of the Independent Board individually and collectively accept full responsibility for
       the accuracy of the information given and certify that, to the best of their knowledge and belief,
       no facts have been omitted that would make any statement in this announcement false or
       misleading or be likely to affect the importance of the information, and that all reasonable
       enquiries to ascertain such facts have been made and that this announcement contains all
       information required by law and the Takeover Regulations.




                                                       12
      The directors of SAB Zenzele Kabili individually and collectively accept full responsibility for the
      accuracy of the information contained in this announcement to the extent that it relates solely to
      SAB Zenzele Kabili. In addition, the board of directors of SAB Zenzele Kabili certifies that to the
      best of its knowledge and belief, the information contained in this announcement solely pertaining
      to SAB Zenzele Kabili is true and, where appropriate, does not omit anything that is likely to affect
      the importance of the information contained herein solely pertaining to SAB Zenzele Kabili, and
      that all reasonable enquiries to ascertain such information has been made.


Bryanston
17 February 2020


Investment bank and financial adviser to SAB Zenzele Kabili, AB InBev and SAB
Rand Merchant Bank (a division of FirstRand Bank Limited)


Legal adviser to SAB Zenzele Kabili, AB InBev and SAB
Bowmans


Independent Legal Advisers to SAB Zenzele and the Independent Board
ENSafrica


Independent Expert
BDO Corporate Finance Proprietary Limited


Reporting accountants
PricewaterhouseCoopers


Transaction Consultant
The Standard Bank of South Africa Limited


JSE Sponsor to AB InBev
Questco Corporate Advisory Proprietary Limited



AB InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with secondary listings
on the Mexico (MEXBOL: ANB) and South Africa (JSE: ANH) stock exchanges and with American
Depositary Receipts on the New York Stock Exchange (NYSE: BUD).




                                                   13

Date: 17-02-2020 08:00:00
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