InBev concedes defeat in battle for Slovenian Union

Union is the second-largest brewer in Slovenia, and InBev (or Interbrew, as it was called prior to last year's merger with Brazil's AmBev) has been a strategic investor since October 2001. During that time, the Belgian firm has increased its stake in Union from 20 per cent to 41.32 per cent, and had made no secret of its desire to take complete control of the brewer as part of its ongoing expansion in central and eastern Europe.

But Lasko, Slovenia's biggest brewer, had other ideas. Fearing (perhaps rightly) that Interbrew's initial investment in Union would lead to its eventual takeover by the Belgian group, Lasko set about building its own stake in Union, taking it to 48 per cent by 2003.

Not surprisingly, Interbrew challenged Lasko's move, arguing that a combination of the country's top two brewers would lead to a virtual monopoly over the beer market. But in a move which shocked everyone, the Slovenian competition authorities sanctioned Lasko's move in July 2003, arguing that since Lasko did not have majority control over Union, there was no case to answer.

For 18 months, Interbrew, and then InBev, fought the decision, which it argued was unfathomable given Lasko's well-publicised links to other Union shareholders, notably food processor Perutnina Ptuj, in which Lasko is a large shareholder. The combined shareholding of Lasko, Cogito (Lasko's broker) and Perutnina Ptuj amounted to 56 per cent of Union's shares, essentially giving Lasko control over its rival.

The situation changed once again in December 2004, however, when Lasko finally acquired majority control of Union through the purchase of a 5.98 per cent stake in the company from minority shareholders. Lasko immediately said it intended to take complete control over Union, and that it expected no opposition from the competition authorities as they had already given the go-ahead to an eventual takeover provided that a number Union's brands were sold off.

Rather than continue its expensive legal challenge, InBev decided to throw in the towel, and last week agreed to sell its 42 per cent stake in Union to Lasko for €70.7 million, plus a "withdrawal fee"​ of €3.5 million.

"We are pleased to close this challenging chapter in Slovenia in a very constructive way and on good terms with Lasko,"​ said Stefan Descheemaeker, head of InBev's central and eastern European operations. "While, for the period since 2001 until today, we fully recover our initial investment, InBev's 2005 accounts will show a minor capital loss for this transaction."​

Gwendoline Ornigg, InBev's spokesperson, said that the commercial agreements between Union and InBev would continue for now, although they would be evaluated over the next six months. She declined to comment on whether the Lasko-Union merger would be permitted by the competition authorities (especially since Slovenia has joined the EU since making its initial decision to permit the deal) or whether InBev would be interested in taking back its stake in Union should the deal be blocked.

She also refused to say whether InBev would look for other investments in Slovenia.