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. Last Updated: 07/27/2016

Alfa Sells Beer Stake to InBev for $350M

MTAlfa billionaire Mikhail Fridman
BRUSSELS -- Belgium's InBev agreed to buy Alfa Group's stake in SUN Interbrew, Russia's second-largest beermaker, for 260 million euros ($350 million) to foil an attempt by Alfa to gain control of the venture.

InBev, the world's second-biggest beermaker whose brands include Stella Artois and Beck's, said it was buying from Alfa-Eco 21.8 percent of SUN's voting shares and 1.9 percent of the nonvoting shares. Some analysts deemed the price expensive.

SUN Interbrew, brewer of Klinskoye and other brands, is an important foothold for InBev in one of the fastest-growing beer markets in the world.

The deal removes any risk of a bidding contest with Alfa-Eco. Alfa, a financial company controlled by Mikhail Fridman, Russia's sixth-richest man, had been buying Moscow-based SUN shares since July.

After closing the deal sometime in the first quarter, InBev will own 97.3 percent of the voting shares and 98.8 percent of the nonvoting shares of SUN Interbrew, it said.

The deal comes after InBev bought out India's SUN Trade, its partner in SUN Interbrew, in August to get 75.5 percent of the voting shares and 96.1 percent of the nonvoting shares.

For the third quarter, SUN reported a core profit of 54.7 million euros on net sales of 214.1 million euros. Its volume was 5.8 million hectoliters.

InBev agreed to pay 204.7 million euros for the voting and nonvoting shares. It is also to pay up to 55 million euros in recognition of some commitments from Alfa-Eco. InBev declined to explain Alfa-Eco's commitments, but Delta Lloyd analyst Richard Withagen said he suspected it was to prevent Alfa-Eco from buying up the remaining minority shares.

"It is to keep Alfa-Eco out of SUN Interbrew for good," he said. Although InBev said the value of the deal was equivalent to 26.51 euros per share, Kempen & Co analyst Mutlu Gundogan calculated an even higher price.

"Although we understand the strategic rationale for buying out Alfa-Eco, we see a hefty premium in the takeover price, as InBev is paying 33.64 euros per SUN Interbrew share, while in August it paid 27.35 euros per share when buying out SUN Trade," he said in a research note.

Last month, a Russian appeals court rejected a lower court decision to block the deal between InBev and SUN Trade, demanding it reconsider its position, according to InBev.

(Reuters, Bloomberg)