Russia/Ukraine: AB InBev to combine business with Anadolu Efes

AB InBev announced on Wednesday to combine its existing business in Russia and the Ukraine in a 50:50 merger with those of Anadolu Efes.  As already speculated earlier (, 17.11.2016), both companies need to strengthen their position in a declining market and have to catch up with Russia’s leading brewing group Baltika, in which Carlsberg holds 100% of the share since the final buyout of independent shareholders in 2012.

AB InBev’s  already holds a 24% stake in Anadolu Efes since the company’s  combination with SABMiller, which completed in October 2016 and which is still conditional on the completion of satisfactory due diligence and is subject to regulatory approvals in Russia and Ukraine.

The combination of the number two in the Russian beer market (SunInBev , 17% market share) and number four  (Efes Rus, 14%) will create a new beer giant in Russia named AB InBev-Efes , that will have a combined market share of 31% and comes close to market leader Carlsberg (39%). The next biggest player Heineken has only a 15%market share (all figures based on USDA’s Russian Beer Market Update, 19.2.2016, newer unsecured market share figures of2016 suggest for Carlsberg 35%, SunInBev 12% and Efes Rus 16%). Both AB InBev and Anadolu Efes will work towards agreeing binding transaction documents in due course and anticipate completion of the transaction by mid-2018.

According to AB InBev’s press release both AB InBev and Anadolu Efes would have equal representation on the Board of Directors, with Tuncay Özilhan, current Chairman of the Anadolu Group and Anadolu Efes, serving as the Chairman. Both companies  have also agreed in principle to the nomination of Dmitry Shpakov, the current president of the AB InBev Russia and Ukraine businesses, as the CEO candidate to lead and run the combined AB InBev-Efes business, and to the nomination of Roy Cornish, the current Managing Director of Efes-Rus (, 23.11.2016), as its CFO candidate.

Since 2008, when government tightened regulations including a hike in excise tax and restrictions in advertising, sales and available packaging sizes, the Russian beer market shrank by more than 40% and forced 12 breweries to close down production.

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