An opportunity to take a stake in one of the beverage packaging companies in the US is set to present itself, with AB InBev hiring Deutsche Bank to explore strategic options for its Metal Container Corporation subsidiary, which manufactures many of the cans, lids and bottles required for its products in the US.
It is stressed that AB InBev is not looking to sell the business outright but that it is mulling options for the sale of a joint or perhaps the establishment of a joint venture with another company. Unofficial sources claim that the company’s management has held preliminary discussions with a number of unnamed private equity companies. However, it is thought that no firm conclusions as to the preferred route have yet been taken and any discussions are still preliminary.
Acquired AB InBev as part of the merger with Anheuser-Busch in 2008, Missouri-based business is a substantial one, with 7 plants across the country, supplying much of Anheuser-Busch’s needs as well as having contracts with outsiders, including PepsiCo and Monster Beverage Corporation.
Analysts suggest that the company would be likely to have a value of US$5-US6bn if it were sold in its entirety, in line with a multiple of around 11x EBITDA seen in most of its leading quoted rivals. They also say that the nature of any supply contract with AB InBev is likely to be a vital consideration to any outside party, as this is crucial to the security and visibility of the company’s cash flows.
AB InBev and Deutsche Bank both decline to comment.