Business
It is generally difficult for companies that are not genetically in the financial field to be able to arrange for large sums of capital on their own. Therefore, it is big news that Anheuser- Busch InBev has managed to arrange a loan of as much as $75 Billion in its venture to buy SABMiller in a $100 Billion deal. The loan has been structured in five parts. The effort to arrange such a large amount of capital eclipses Verizon Communications’ effort to raise $ 60 billion two years ago, and reflects the inherent capability of Anheuser-Busch to tap resources and coordinate with a large number of lending agencies. While Anheuser-Busch InBev’s symbiotic links with the banking industry would certainly have helped, the fact that the capital raised rivals the loan arrangement capabilities of leading Wall Street firms puts the effort in the right perspective, as the enormous size of the loan propels the company to the eighteenth place in the list of highest loans arranged in 2014. While an impending sale of 58 percent of SABMiller’s stake in a MillerCoors joint venture would reduce the loan burden by $10 Billion in the short term, it does not take anything away from the enormity of the effort. Through the entire episode, the Board of Anheuser-Busch has been careful to remain parsimonious and have driven hard bargains to reduce the fees being paid to participating banks to the bare minimum of as low as 0.4 percent of the loan proceeds. Such an economy of effort has resulted in the company saving $300 million in outlays. While the amount pales in comparison of the capital involved in the financial merger of Anheuser-Busch InBev and SABMiller, it underlines the financial prudence and acumen to reduce costs on the part of Mr Brito, the Chairman of Anheuser-Busch InBev (Beales).
Work Cited
Beales, Richard. “Anheuser-Busch InBev’s Plan to Finance Beer Deal.” NYTimes.com. 2015. Web. February 17, 2016.
