AB InBev

New Union Opposition To SABMiller Takeover

Anheuser-Busch InBev NV faces a new challenge from a key South African union as it seeks approval for the acquisition of rival brewer SABMiller PLC.

South Africa's Food and Allied Workers Union plans to object to the merger at a hearing before the country's Competition Tribunal, said Katishi Masemola, the union's general secretary.

The union opposes AB InBev's plan for handling a shareholder program that SABMiller established for employees, retailers and others in South Africa, he said. The union wants those shareholders to be able to cash out their stake in the company when the deal closes rather than wait until 2020 when their shares mature under terms of the SABMiller shareholder program.

"We're planning for a long fight," Mr. Masemola said, adding that the union would press its case for changes all the way to the Competition Appeal Court if need be.

The union's objection creates a new obstacle to AB InBev's effort to win over regulators in South Africa, one of four markets where regulatory approval is a precondition to closing the roughly $108 billion deal. AB InBev appeared on track for South African approval when the country's Competition Commission recently signed off on the deal. It now heads to South Africa's Competition Tribunal for a hearing and final clearance.

The South Africa Competition Commission's approval came a little over a month after AB InBev pledged to create a $69 million investment fund in South Africa and promised that no employees in the country would lose their jobs as a result of the merger.

--Tripp Mickle

SIGNET

Reports Question Credit; Shares Slide

Shares of Signet Jewelers Ltd. fell on Friday, pushing their decline last week to 12%, amid reports that questioned the credit quality of the company's customers and alleged that some Signet employees had replaced premium diamonds with cheaper, man-made substitutes.

In a statement Friday, the company said: "We strongly object to recent allegations on social media...that our team members systematically mishandle customers' jewelry repairs or engage in 'diamond swapping.' "

Signet owns some of the most prominent jewelry-store brands in the U.S., including Jared, Kay Jewelers and Zales.

Like other sellers of big-ticket items, Signet often provides financing for purchases its customers make.

After the stock market closed Wednesday, "Grant's Interest Rate Observer, " an investment newsletter, issued a negative report on Signet, saying its credit portfolio could be in worse shape than thought because of the way the company accounts for loan delinquencies and losses.

Shares of Signet declined 6.6% the day following the report. Signet didn't immediately respond to a Wall Street Journal request for comment about the credit-quality allegations, though Chief Executive Mark Light on the company's recent earnings call said, "our credit metrics and our credit portfolio are strong."

Citing Bloomberg data, the newsletter said the number of bankruptcy filings that cited Signet's brands as a creditor had jumped 72% in the first quarter from the same period a year earlier.

Last week -- before the newsletter was released -- Signet had said it would undergo a "strategic evaluation" of its credit portfolio and would consider a "full range" of possible outcomes, including potentially outsourcing its credit program. The company said it had tapped Goldman Sachs as an adviser, though it noted its credit metrics in the latest quarter had improved. Alongside that disclosure, the company also reported downbeat comparable-store sales growth.

Shares of Signet closed down about 4.4% at $88.19 in New York on Friday.

--Austen Hufford

 

(END) Dow Jones Newswires

June 06, 2016 02:48 ET (06:48 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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