M&A Announcement

Aug 30, 2016

Slides

Good day, ladies and gentlemen, and welcome to the AB InBev Analyst Call. Hosting the call today from AB InBev is Mr. Carlos Brito, Chief Executive Officer Mr. Felipe Dutra, Chief Finance and Technology Officer and Grant Staley, Head of Investor Relations. To access the slides accompanying today's call, please visit AB InBev's website now at www.abinbev.com or the recommended transactions microsite atwww.globalbrewer.com and click on the Investors tab. Please note the disclaimer and the relation to forward looking statements on Slides 23 of this presentation. Today's webcast will be available for online demand playback later today. At this time, all participants have been placed in listen only mode and the floor will be open for questions from analysts following the presentation. It is now my pleasure to turn the floor over to Mr. Brito. You may begin. Thank you, Theresa. Good morning, good afternoon, everyone, and thank you for joining us on the call today. I'm here with our CFO, Felipe Dutra and our Head of IR, Graeme Staley. The purpose of today's call is to update you on the path to closing of the recommended combination with SCB Miller. I'll briefly cover the transaction structure and remain in steps to closing, but spend most of my time on the strategic rationale for the combination. I will then hand over to Felipe, who will cover the financial highlights. As you can see on Slide 5, we have received all of the necessary regulatory clearances that were preconditions to launching the formal offer. We received unanimous support from the FCB Miller Board of Directors for our revised cash offer and issued all of the transaction documents necessary for the closing of the combination. Slide 6 contains a summary of the documents published last week, which cover the 3 step closing process, the listing of new Belco shares and the convenience of the general meeting of AB InBev to approve the transaction. Slide 7 outlines the remaining steps to closing. On September 28, AB InBev, SABMiller and New Belco will hold their general meetings. On the same day, there will also be an SABMiller UK scheme court meeting. On October 4, SABMiller will seek sanction of the UK scheme arrangement in the UK Court. And on the following day, SABMiller's shares in the London Stock Exchange and the Johannesburg Stock Exchange will be delisted. The Belgium offer in which ABN and Bao will offer to acquire Neobelco will open and close on October 7. This will be the latest date by which SABMiller shareholders can make or revise their actions for the cash consideration or the partial share alternative, the PSA. We expect the merger of AB InBev into UBELCO to occur on October 10th to be followed immediately by the closing of the combination. The new company's stock exchange listings will come into effect the following day, October 11. Regarding the details of the transaction on Slide 8, the boards of AB InBev and SABMiller had reached an agreement on the recommended acquisition of SABMiller by AB InBev. Under this agreement, SABMiller shareholders will be entitled to receive for each SABMiller share either £45 in cash or a partial share alternative comprised of 0.483969 restricted shares in New Belco plus 4,658,000 in cash. The cash offer was unanimously by the Board of SME on July 29. Slide 9 contains further detail of the cash offer and the PSA. As a reminder, the PSA will take the form of a second class of restricted new Belco shares leading to a maximum of 326,000,000 shares and subject to a 5 year lockup. All SABMiller shareholders are entitled to elect for the PSA, if they so choose, but such an election must be in respect of the entire holding in SABMiller Shares. If demand for restricted Nubelco shares exceeds 326,000,000 shares, all elections, including those made by Altra and Bevco, will be scaled back pro rata. Ultra and Bevco, who collectively own approximately 40.33% of SMB Miller's share capital, have given irrevocable undertakings to vote in favor of the transaction and to elect for the PSA in respect of their entire SABMiller holdings of approximately 655,000,000 SABMiller Shares. This will provide them with approximately 317,000,000 restricted Nubelco shares prior to any pro rata scaled back. We have been very successful in prefunding the transaction with 3 bond issuances completed in the Q1. These issuances, which resulted in net proceeds of $61,900,000,000 coupon of 3.2 percent allowed us to cancel $55,000,000,000 of the $75,000,000,000 senior facilities agreement entered into October last year. Slide 10 summarizes the phase cap closing process, the corporate governance within New Balco and details of New Balco's stock exchange listing, which will become effective on October 11th. These details are consistent with the 2.7% announcement in November last year. Let's now turn to the strategic rationale of the transaction and the exciting opportunities presented by the new company. We believe the rationale for this combination, on page 12, is extremely compelling and would be in the best interest of both company's consumers, shareholders, employees, wholesalers, business partners and the communities which we serve. 1st and foremost, this combination would create the first truly global brewer, which would take its place as one of the world's leading consumer products companies. Importantly, we will bring together a geographic footprint that's largely complementary and that provides access to key high growth regions such as Africa, Asia, Asia and Central and South America. We believe that the African continent in particular has very attractive markets and growth prospects and will be a critical driver of growth for the combined company, building upon SABMiller's strong South African heritage and success in the region. The combined company's joint portfolio of complementary brands will provide more opportunities for consumers everywhere to taste and enjoy the world's best beers. The expertise of both companies would also create innovations to further enhance the consumer experience. The combination of these 2 great companies will bring together the experience, commitment and drive of both organizations' employees to create a world class combined global talent pool. The important resources and expertise, the combined company will be able to make a greater and more positive impact in the communities in which we live and work by providing opportunities all over the supply chain and aspiring to the highest standards of corporate social responsibility. Finally, we believe the transaction will deliver substantial value through the delivery of revenue, cost and cash flow synergies. As you can see on Slide 13, the combination of AB InBev and FB Miller would create one of the world's leading consumer products companies with pro form a revenue of $55,000,000,000 and pro form a EBITDA of $21,000,000,000 excluding synergies. The truly global nature of the new company is a result of AB InBevs and FTD Millers' largely complementary geographic footprints as depicted on Page 14. APMEBAB does not currently have a material presence in Africa, whereas FCB Miller and its associates have an extensive operating history and presence there. SABMiller also has a strong presence in Colombia, Ecuador, Peru, India and Australia, and we are particularly looking forward to working with SABMiller's joint venture partners and associates around the world. Similarly, Avian Mbapp gained a strong presence in the U. S, Mexico, Brazil, Canada, China, Argentina, South Korea and the major markets within Europe. The combination will bring further diversification to our existing footprint as per Page 15, with increased access to developing markets. The more developed markets in North America and Europe will represent approximately 37% of the combined company's revenues compared to 47% of AB InBev's revenues today, with an increased contribution coming from Latin America and very recent contributions from Mexico, Asia Pacific and Africa. The analysis on this slide does not reflect the new zone structure announced on August 4. In due course, we'll be providing reference based data in line with the new structure as we have done in previous combinations. This combination is all about accelerating our revenue growth. In one region, which will drive much of that growth is Africa, as you can see on Page 16. The African continent has several very attractive markets with increasing GDPs, a growing middle class and expanding economic opportunities. It's also becoming more important in the context of the global beer industry. It is a great time to be entering this exciting market to a team that already has a long and impressive track record, strong heritage and deep understanding of the region. Given Africa's potential, along with our SABMiller's expertise and success in the region, we expect the continent to continue to play a vital role in the combined company. South Africa is the largest BO market and we have demonstrated our commitment to the country through the package of initiatives put in place, including a ZAR1 1,000,000,000 investment to support local agriculture and drug creation. We have also created an Africa Board chaired by Mr. Jabun Babuza. Mr. Babuza is currently the Chairman of the Board of Telkom S. A, Sphere Holdings and Business Unity South Africa, and has held a number of other board memberships, including Tanzania Burries Limited, Castle Brewing Company in Kenya and South African Tourism. He is also Group Chief Executive at Sogut Sun Holdings and CEO of 5cos Marketing. We look forward to working with Mr. Mabuza and benefiting from his knowledge, experience and insights in the region. The new company will have access to an exciting enhanced portfolio of great brands, and we're looking forward to expanding these brands into new markets as depicted on Page 17. AB and DAB's 3 global brands, Corona, Stella Artois and Budweiser will capitalize on common consumer values and experience across borders and have the strength to be marketed worldwide. We're also excited by the potential of our multi country brands, which resonate well with consumers in multiple markets, as well as our local brands, which offer locally popular tastes and connect with consumers in their home markets. We're looking forward to further developing our portfolio of brands in the years ahead. Given that consumers around the world are more alike in different, it's not surprising that the commercial priorities, the Pippen and Page 18, of the 2 companies are very similar. We need to use different words to describe them, but the platforms are very consistent. We'll continue to grow our global brands, now with the opportunity to do so in many new markets. We'll also continue to focus on the premiumization and integration of the beer category, bringing excitement and aspiration to the consumers' experience with beer. Our large portfolio of core brands will be a major priority, and our focus will be elevating the perception and relevance of these brands with our consumers. And finally, we remain committed to developing the near beer segment through innovations that compete for greater share of terraulte. Our global growth will be fueled by the exceptional people around the world from both AB InBev and SABMiller, and we look forward to developing and providing opportunities to the talent we will have in the combined company. The passion, dedication and expertise of the combined talent pool will allow us to learn from each other and take advantage of new market and brand opportunities. Turning now to Page 20. We believe strongly that global companies have a responsibility to contribute to the world around them. AD and Devon has been a leader in this area through our Building People Together for a Better World platform. SABMiller has also been focused on strong corporate citizenship with the commitment to improving livelihoods in local communities. We are also developing sustainability strategy for the new company that's designed to drive positive changes in our communities while improving business performance focused on 5 areas: water, climate, agricultural development, economic growth and smart drinking. The new company will build upon the work of both AB InBev and SABMiller to lead the way in sustainability. I'd now like to hand over to Filipe, who will take you briefly through the financial highlights of the transaction. Rodrigo? Thank you, Bruno. The combined annual revenues of the 2 companies on a pro form a basis excluding Synagis and adjusting for divestitures exceeds $55,000,000,000 while the adjusted EBITDA of the 2 companies combined is over $21,000,000,000 as shown on Page 22. These figures reflect the transaction related divestitures, which have already been announced. S and B Miller Central and Eastern European brands and its ownership in the Distel Group have been treated as assets held for sale and excluded from the pro form a results. We expect the combined group to generate attractive synergies creating additional shareholder value as depicted on Page 23. We are reconfirming our expectations of at least $1,400,000,000 per annum in recurring run rate pretax cost synergies consistent with the 2.7% announcement in November last year. This is based on current and constant foreign exchange rates. These cost synergies are in addition to the 1.0 $5,000,000,000 of cost savings previously identified by SABMiller, of which $547,000,000 had been delivered by the 31st March this year and which is reflected in the pro form a financials. We continue to expect the incremental cost synergies to be phased in over 4 years following the completion of the transaction, reaching the recurring run rate of $1,400,000,000 by the end of the 4th year. We expect the delivery of cost synergies to require estimated one off cash costs of approximately $900,000,000 to be incurred in the 1st 3 years after closing. For those functions where integration planning has been possible within the combined group, ABMV currently expects an overall potential job reduction of approximately 3% of the total workforce of the combined group. It is anticipated that these job reductions will be implemented gradually in phases over a 3 year period following completion. There are some functions within the combined group where it has not been possible to advance integration planning because of regulatory restrictions. We are therefore unable to give any view on the impact of the transaction on employment in these functions. Please note that we have updated the split of the sources of cost synergies. We now expect procurement and engineering to generate 25% of the cost synergies rather than 20% as announced in the 2.7 document. Similarly, we now expect realignment of overlapping corporate and regional headquarters to generate 30% of the total cost synergies rather than 35%. The synergies numbers do not include potential revenue and cash flow synergies, which have not been quantified at this time. Moving on to Slide 24, both SABMiller and AB InBev have significant expertise in specific areas and we look forward to sharing our companies have been working together on integration planning, exchange information in a clean room environment and performing market visits to understand each other's ways of working. We are looking forward to continue this work up to and after closing. With that, I will leave you with a summary of next steps that Brito presented early, now on Page 26, and head back to Therese to begin the Q and A section. Thank you. Thank you. And we'll go to the line of Edward Mundy with Jefferies. Please go ahead. Hi, morning afternoon everyone. A couple of questions. For foreign dividends, I think with your Q1 results, you removed any explicit reference to the 3% to 4% dividend yield range. I know the longer term you still aspire for yields comparable with other consumer products companies, but could you provide a bit more of a stay on the payout ratio initially after closing the transaction? Second question is on Slide 12. Relative to your slide deck from the 11th November, there's an additional bullet around further product and service innovations, which presumably picked up from market visits to SAB Mill. I was wondering whether you could perhaps find a bit more color here given you've added this additional bullet. And then thirdly, on Slide 23, could you perhaps find a bit more color as to why you've tweaked down corporate headquarters overlapping regional headquarters down from 35% to 30%? Yes, let me Okay, go ahead. First question on the dividend. Our dividend policy remains unchanged. We see a flow of dividend growth over time. Of course, in the short term, we have to balance that with the deleveraging, which is also a priority. There is no reason why we should expect dividends to be reduced, but shareholders should appreciate that as we balance dividend flow and deleveraging in the short term, dividend growth should be somehow modest. But taking that into account, yes, dividend yield is 1 piece, dividend payout is the other piece. At the end of the day is what matters for the combined company, what makes more sense for the combined company. These are guidelines. These are not straight jackets. And again, the important is we see a growing dividend flow over time. Okay. Thanks. On your second question about the bullet on innovation, I think as we had time, more time to interact with our future colleagues and visit some markets despite all the restrictions, of course, imposed by the panel in terms of what can be done in exchange during the integration planning stage. We got some we got very excited about some of the things we saw in terms of, for example, telesales, which has to do with the route to market piece, with affordability, which has to do with the way we tackle some developing markets and consumers occasions. So that's why we decided to add that bullet because those things as we had the opportunity to talk to people even with the constraints and visit the markets and get a better feel for it, it became clear to us that would be also interesting on the even in that side. So it could be more like give and take from both sides. And that's what the beauty of a combination. I mean, you have companies that are dealing with the deal market, but in different realities. And because of our footprint that's highly complementary, it is so true that they have to develop 2 kits in different markets than the ones we did. And the beauty is now comparing skill sets and toolkits, we're learning more and more about things that can be applied in both sides of the new combined company. In terms of your third question, I mean, the first time we spoke about SAGES and their breakdown, it was a top down approach. It was a desktop type approach. Of course, again, even with the restrictions that we got more into the numbers of what could be exchanged and some traveling and meeting people, it got more clear as in any combination as you go through the plan that some lines could bring more value, some other lines maybe less value. But at the end of the day, we're confirming the same $1,400,000 as we did in November this time around. And the split is a bit different, but that's because we have more detail now than we have done. Thanks, Brito. And just a final follow-up. Have you got a name for the new company yet? The name will be confirmed at a later stage before closing on. Okay. Thanks. And next we'll go to the line of Trevor Stirling. Please go ahead. Hi, Brito, Felipe and Graham. Two questions from my side, please. The first one is the is there any reason, at least probably one more for Felipe, to expect there could be tax synergies in the combined entity? Or should we thinking more to take a blended average of the ABI and the SAB tax rates? And the second question, there's one business that isn't mentioned at all in documentation I can see, which is Castel. Should we assume that SAB's relationship with Castel remains unchanged by the combination? Yes. At this point, Trevor, I would think about the blended between the two companies in terms of tax rate. We are conservatively assuming that part of this incremental debt, for example, or improve the incremental debt is not going to be deductible. Of course, as we get to know more about the business, there is an area of opportunity. But at this point, we are conservatively not assuming any deduction and therefore looking at the plan that is probably the best assumption at this point. Great. Thank you very much, Felipe. And Trevor, on your second question about Castel, of course, Castel is a very important relationship and partnership that SAB has and has developed over the years. Of course, to this point, only after closing that we're going to be more in touch with Castel and his people, Mr. Castel and his people. But of course, a very important relationship that we intend to continue to develop and evolve. Great. Thank you, Richard. Thank you, Joao. And next we'll go to the line of Fernando Ferreira. Please go ahead. Question, please proceed with me. I have two questions, if I may. First one related to the synergy guidance and the other one regarding Fernando, can you speak a bit louder, please? Sure. So two questions. A bit louder. Yes. Can you hear me now? Yes, much louder. Okay. So two questions on my side. First one on the synergy guidance and second the regional structure in South America. So on the synergy guidance, I understand your comments that the €1,000,000,000 estimate provided by SABMiller was probably reflecting the entire cost base of the group and the €1,400,000,000 would come on top of that. So the question is really, if you plan on updating the market into a single synergy guidance at some point or we'll basically have to monitor the progress throughout the quarterly earnings based on this initial figures? And then the second question on South America and when we look at Colombia, Peru and Ecuador, would we be able to extract any synergies with Ambev's contiguous territories like Brazil and Argentina or the structures will have to remain completely separate? Well, on the synergy piece, we will continue to update the market as we've done in previous transactions every quarter during a period of time. So we keep you abreast of what's happening, but we'll do it as one number. So we don't have to do the reconciliation, we'll do it for you. In terms of structure in Latin America, Copac will be a new region. But of course, as we said, I think it's in the documents, it is in the documents, the CAGR number will affect both sides of the new combined company. So there'll be cross synergies on both sides, on the S and B side and the ABI side. Okay. Thank you, Brito. Thanks so much. And next we'll go to the line of Chris Pitcher. Please go ahead. Thank you very much. A couple of questions please. Firstly, could you talk a little bit about key staff retention because obviously you've put out the new executive for the business and maybe give a bit of a sense of the level of retention below that level. You mentioned in the presentation also that you haven't given revenue or cash flow synergies targets yet. The last two transactions, you've held back from given revenue synergy targets. Should we expect that again to be unquantified at some point some cash flow synergies to come through? And can you give us any feel for the regional split between those synergies? That would be very helpful. Thanks. In terms of our future colleagues, I mean, our company, Chris, I mean, people is the key of everything to do. So of course, of the things that we're mostly happy about is that during the trips and the business meetings we had and all that, even with the constraints of the panel, we're able to meet some very, very good people, some great talent. And that's what's important for us because at the end of the day, SMB Miller is really its people and the group. So and we've been from day 1 very keen into travel, getting to know people. Again, I'm excited about what the future company holds for everybody, including them, that it's going to be 1 company and that there'll be lots of opportunities and exciting growth opportunities for all of them. So, of course, we know that there'll be some duplications and some people have to reach. So that of course in any combination is the case. But when you think about this fact that our footprint is highly complementary, it is fair to assume that most people, especially in the zones, will remain the new company and they know that. And of course, they're very excited about being part of a big organization where they see that their careers can flourish even in a more global way. So retention is key for us. We have like every time we have retention mechanisms, we have ways to incentivize people as true owners because at the end of the day, that's what we like. We like owners, not professionals. And that's what we've been talking to them from day 1. Even in the 2.7% announcement back in November, we had already details on some of the retention or equity mechanism that could be offered to everybody and we're pretty much within those boundaries. In terms of revenue and cash flow synergies, we said at this point that we see opportunities, but we decided not to quantify and you're right, that's what we do every time. So we focus on the cost synergies in terms of numbers. But of course, we try to extract the other synergies as well on the cash flow and revenue side. On the revenue side, for example, we've said from day 1 and we're very excited about what our global brands can do in an extended geographical footprint. Those are very interesting markets, ones that our global brands can do very well. And now with, I guess, we know our knowledge and an off to market, we think we'll get those amazing brands to those consumers in a better way. And just in terms of sort of the regional split synergies, is that something you're prepared to give us any feel for? I appreciate there's a limited number of regions you're actually acquiring. At this point, Chris, we'll have to limit ourselves to what is available in the public document. So we cannot go into that level of delays, unfortunately. Sorry, one final point. Britto, you mentioned you've traveled extensively. Have you met with all the key governments as well, key government figures as well as the key SAB staff in the countries involved? Again, the traveling, of course, is mostly to meet our future colleagues, for sure. In South Africa, that's where we're not going to be deficient, that's public in dealing with the public concern and public interest. But that's what's public, yes. Okay. Thank you. Thank you. And next we'll go to the line of Anthony Biccolo. Please go ahead. PepsiCo bottler. I mean, in a practical way, how does that work? How can you balance the interest and needs of your company as well as the 2 big franchise companies? Well, Toni, the transaction is not closed yet. So it's too soon to talk about this. We don't even have access to contracts and stuff at this point. So it's too soon to talk about it. And C. B. Miller, of course, will retain ownership of its nonalcoholic business in Africa and Latin America. And that, of course, has a long standing partnership with Pepsi for bottling operations in several Latin American countries. That's actually by the way, with Pepsi. So I mean but again, the transaction is not closed yet, so it's too soon to comment on this. Thank you, Adam. And another thing, Brito, the Eastern European businesses that you sort of agreed to sell back in April, we haven't heard anything specific about that yet. Is there anything going on? Or is that still an ongoing process? Paul, again, this is something that at this point, we also cannot comment. You have to understand that within the UK takeover Canada rules, we can only come up with what's in the market. So it's clear that, of course, we have to divest our assets. And but at this point, that's it. Okay. Thank you, Bruno. Thank you. And next we'll go to the line of Robert Ottenstein. Please go ahead. Great. Thank you very much. On Africa, can you give us, obviously, you're setting up a board and that's great, but it's hard to govern a business as diverse as that and then as intricate as that by Board. Can you walk us through some of the kind of reasons to believe that you have the right people in place to make the most of the great potential of the business there that you've highlighted as key to this transaction? Well, Robert, again, as in any transaction that we've done in the past, most of the management will remain in place. That's no different this time around. Of course, you still don't have visibility on that. We just announced EBM. But as we announced EBM minus 1, which we should do in the next few weeks before closing for sure, you see that what is done in the past will very likely again be reflected in that, therefore, and then we're drawing, of course, an experience on that of management that FCD has in Africa throughout Africa and different countries. And of course, we'll take advantage and try to get these people to be excited about future quality about the new company as we are. So they remain and they help us continue to build that amazing growth story that Africa has been pressing to be more. So again, I guess it will be more clear as we go through the next layers of management announcement, But at this point, that's what I can say. Great. And then just as a follow-up, you noted that through the process over the last few months, you've been able to get a little bit more visibility on the business and therefore have had more or less confidence from a bottoms up perspective on the synergy numbers. Can you also perhaps outline for us other things that you've learned about SAB's business that you can share with us that perhaps weren't completely clear, weren't completely visible to you when you made the initial offer? No, I think, Juan, it was nice to confirm and it's not new, but it was nice to confirm is that despite calling some same things different names, on the commercial side, as we depicted on Page 18, at the end, we're very focused on the same drivers. It's just that we have sometimes different experience and different learnings on those drivers, which is the part that will enrich a lot of discussion. So I mean, we also want to grow brands from the local to regional to eventually global. So you look at Castle, for example, it's an amazing example of a brand that's originated in South Africa. And today, when you look at East Africa, the countries that actually do manage the business, the cast is pretty much everywhere. So it's becoming more and more of a Pan African brand. So that's the same kind of mindset we have, leading of course, if you continue on that to a global brand. The second thing is that they also are very focused on trying to premiumize the beer experience and trying to grow the beer category. And in the beer category, they even have more experience than we do in trying to enlarge the beer category. But both of us are trying to premiumize the beer experience and premiumize our portfolio. So that again, very, very similar. On the core brands, we both see the need because of the premiumization that's out there to elevate the core proposition that we have because otherwise these core brands become too much outdated given the premiumization that's happening in the marketplace. So again, we have different names for it, But at the end of the day, it's about getting those core brands that have been important for many years that continue to be important to pay the bills to become more contemporary, to become more in tune, to refresh and to continue to be very connected to living drinking age consumers and young adults. And the first one is trying to develop what we call the near beer segment or what's right after beer in the alcohol beverage landscape. And that again, it's something that they had a very similar mindset. Cider, for example, something that we develop with the outside as well and so on. So I think flavored beers. So we have some of the same pillars, but the beauty here is that because they are in different markets, they have different toolkits for the same pillars. And the beer is when you put the 2 together. So those are things that were nice to confirm as we went through different visits and market visits and met new people because at the end we're working on the same logic just with different skill sets and that's the deal with it. Great. And just one last question. After the Anheuser Busch acquisition, the key focus on management incentives or one of the key focuses and triggers was a certain balance sheet target. The sense I'm getting is that the targets here may be more besides obviously the synergy side, may be more focused on organic growth. Can you elaborate at all in terms of how some of the incentive packages that you're putting together for top management, how they look and what those main goals are going to be? And is that correct that a lot of them will be based on organic growth? Well, Robert, again, we can only talk about what's public, but one way to think about it is that when we did the transaction, we were in the middle of a financial global financial crisis and deleveraging, of course, is very important. Today, we're in a different world. I'm not saying deleveraging is not going to be something that is important as well. But of course, we're in a different world, we're not in the crisis type situation. And of course, there'll be more of a balance as we had in the Mexico integration with the same thing. There's more of a balanced approach to growth and value creation as opposed to just a big focus on the leveraging. Thank you very much. And next we'll go to the line of Pablo Zwaneck. Please go ahead. Yes, thank you. Two questions. 1, in some markets like South Africa, for the deal to be agreed by the government, there were some restrictions on your ability to reduce cost. But today, you have not adjusted your synergy or cost savings guidance. So obviously, that means that your ability will not be impeded. But if you look at the cost of the cost of the cost of the cost of the cost, it seems that there were restrictions that I thought were significant and could have affected your ability to cut costs. The second question, if I refer to Slide 31, I think this is going to be the first time that they being in bev control group is going to be diluting itself and then we own 44% of the company. So they have a first right to first refusal when the 5 year local period expires to buy the stake that will be owned by Algae and Bevco? Thanks. Well, on the synergies, Pablo, at this point, again, we have to work with what's public. What we're doing now is we're confirming the $1,400,000,000 The only thing we did is that we changed slightly the breakdown between the 4 major buckets of where the synergies are going to be generated And that accounts for everything you said before because that's all in, right? So that's all in there. On the second question? On the second question, the relationship between shareholders, including Board representation, so on and so forth, is reflected in the documents. And you should expect when and if they decide to sell that the disposal is going to be made on an orderly manner in the marketplace. So that's essentially it. Okay. Thanks. Just a quick follow-up. I mean, I want to ask the Coca Cola question again in a different way, if I may. I understand that not everything is finalized yet. But Coca Cola, one thing is that you own the 57% stake in CCBA, but Coca Cola at the end of the day owns a distribution, right? And it's up to them whether they keep in with CCBA or not in the current ownership structure. So are those conversations still ongoing? And then related to that, my understanding is that the whole operation there bottling and the beer business were not integrated at all. So the distribution production were separate. And even in procurement, there wasn't much being done together. So are there a lot of opportunities on that front as those two businesses are integrated? Thanks. Yes, Pablo, on this one, again, the transaction has not closed yet. Since you should talk about it, we'll come back to the stock pick in the new course after closing. All right. Thanks. Thank you. Next, we'll go to the line of Mark Swartzberg. Please go ahead. Yes, thanks. Good morning, Brito. Good morning, everyone. Good morning. One question on the cost synergy question there. The fact that you have not included customer facing sales and marketing and consumer in your arrival of this 1.4. And in time, that could be a source. Is there any reason not to look at prior transactions and think that they provide some benchmark for us about how that might be a source of added savings? Well, in terms of sales and marketing, what we try to do is we try also to procure better. But we never count on cutting sales and marketing as a way to get to synergies. I mean, just look at the next consideration, we have increased sales and marketing. Look at the U. S. And increased sales and marketing, if you look throughout the year. So but on the procurement side, when I say here procurement and engineering, procurement covers in principle everything with procurement. So to be clear, going forward, post closing, you don't think the customer facing and consumer area of costs will be a source of potential savings? Well, what we can say at this point is what we have there on Page 73 is in terms of source of synergies and where they come from. So in terms of procurement, you said 25% of sales would come from procurement, up from 20%, and that is a source of raw materials and packaging and engineering our associated processes. So that those are broad themes, but that's what we see at this point. Fair enough. Thank you, Brito. Thank you, Mark. And we'll go to the line of Chris Pitcher. Please go ahead. Thanks so much. Apologies for the follow-up. It's a technical question, again, going back to the soft drinks business. Can you update us on how that falls within the Black Economic Empowerment Agreement of Zenzele's scheme in terms of EBITA under the new agreement, whether that the EBIT from the SoftBank business is included in the EBIT on that scheme for working out the value that you talked about. This is Graham, Chris. I'll have to follow-up with that one now. I'm not quite sure of the technical answer on that. I'll have to go and check the documents for you, but I can give you a call after this conference is finished. Okay. Thank you very much. That's it for me. Not a problem, Chris. Thank you. Thank you very much for joining today's call. I would now like to pass the back to Mr. Brito for closing remarks. Well, thank you, Teresa. In my behalf, I'd like to reiterate that we believe the strategic rationale behind the combination with SABMiller is extremely compelling from the immediate value realization that offers to SABMiller's shareholders to the growth prospects it creates for the combined company. To put it simply, we believe more can be achieved together than apart. With that, thanks for your attention and have a great day. Thank you. Thank you very much. This concludes the conference call for today. Thank you all for your participation.