Mega-brew merger puts UK jobs at risk as London head office closure confirmed

AB InBev’s (ABI) buyout of UK-listed SABMiller (SAB) is “likely” to involve the loss of UK roles after the offer document today confirmed the plan to established the merged entity’s global HQ in Leuven, Belgium.

The deal’s offer document issued today says the merger will see the wind-down of SABMiller’s existing head office in London within 12 months of deal completion.

Additionally, the shift of head office functions to AB InBev’s global HQ in Leuven “is likely to involve the loss of roles at SABMiller’s global headquarters in Woking in a short period following completion”.

SABMiller currently employs over 500 people in Woking and over 50 in London.

AB InBev said it would “work to mitigate the impact of this by making alternative roles available in integration and business continuity teams that will remain at SABMiller GHQ.”

The potential UK job losses are part of a wider headcount consolidation as part of the integration process which will cut “approximately 3% of the total workforce of the combined group”.

While AB InBev said “the extent of any job reductions in all locations is not yet certain”, this 3% cut means more than 5,000 jobs will likely to be lost as part of the £79bn deal.

A large proportion of those roles will be transferred to the new owners of the various global brewing assets AB InBev is selling off as part of the merger in Europe, the US and China.

AB InBev has already agreed a deal to sell-off Peroni and Grolsch in Europe to Asahi and is inviting bids for SABMiller’s Eastern European brands including Pilsner Urquell.

The offer document states: “The transactions will involve the transfer of SABMiller employees in these businesses to the relevant purchaser.”

Writing in the document, SAB chairman Jan du Plessis said: “While regrettable, the SABMiller directors recognise that AB InBev has agreed to the divestitures in order to obtain the required regulatory clearances for the transaction, and that in order for AB InBev to achieve its expected benefits of the transaction, certain operational and administrative restructurings will be required following completion.”

“The SABMiller directors note that AB InBev’s integration planning is not yet complete and regret that the impact on certain employees and office locations of the SABMiller Group remains uncertain.

”However, it is clear that job losses in the combined group will be required and that AB InBev intends to implement the rationalisation, relocation or closure of a number of SABMiller’s global and regional offices.”

SABMiller shareholders will vote on the deal on on 28 September before the deal completes on 10 October, but shareholder approval remains far from assured.