SOUTH AFRICA – South African-based shareholders will receive more than $100m of the dividend due to be paid by SABMiller in early August if there is a delay in finalising the Anheuser-Busch InBev (AB InBev) transaction.

Moves by the Food and Allied Workers’ Union (Fawu) to secure an accelerated payment for workers participating in SAB’s Zenzele black economic empowerment (BEE) scheme emerged last week as a possible threat to early closure of the $108bn transaction.

That transaction will see South African shareholders receiving about $7.5bn when they sell their shares.

Just hours after Economic Development Minister Ebrahim Patel gave details of an agreement reached with AB InBev CEO Carlos Brito on public interest issues, Fawu general secretary Katishi Masemola said he had “fundamental differences of opinion” with AB InBev over the handling of the Zenzele scheme.

Mr Masemola, who intended thrashing out these differences at the Competition Tribunal hearing, said on Friday he would be writing to SABMiller’s executives and was hoping they would help pay for legal advisers. Mr Masemola will have to be particularly deft if he is to persuade the tribunal to allow consideration of the matter.

At stake for Mr Masemola’s members is a share of the value of the 18.5-million SAB-linked rights in the Zenzele Employee Trust. In the absence of the AB InBev deal, each of these rights has historically been valued at about 25% of the SABMiller share price.

AB InBev’s offer of £44 a share for SABMiller distorts the underlying economics of the relationship, and points to a value of about R4bn for the 18.5-million rights in the trust.

Mr Masemola says his members should benefit from this distortion through acceleration of the scheme’s 2020 maturity date, just as the executives with share option rights are benefiting from the early exercise of their options.

He says workers should pay what is due on the shares and receive the balance of the value. A new BEE scheme would then be launched, in terms of Mr Masemola’s proposal.

AB InBev seems determined to stick with the agreement it has reached with Mr Patel that includes a commitment on job security, support for the Zenzele scheme and a R1bn development fund.

AB InBev backed the BEE objectives of the Zenzele scheme and would continue it until 2020 “rather than accelerating it now”, the company said.

It wants employees to enjoy some upside from the transaction, but so far has been unable to agree on just how generous that should be.

Mr Masemola said his efforts to secure a reasonable deal for his members has been complicated by the opaque structure of the Zenzele scheme. He has asked SAB for clarity on the details of the scheme.

AB InBev executives are due to meet with Mr Masemola this week to see if they can thrash out an agreement to enable the transaction to stay on track for early completion and ensure the dividend stays with AB InBev.

April 25, 2016;