SABMiller Plc (SAB), the world’s second- largest brewer by volume, said the head of its European unit will succeed Graham Mackay as chief executive officer after naming the current CEO as the successor to Chairman Meyer Kahn.
Alan Clark, 52, will succeed Mackay as CEO at the annual shareholder meeting next year, a year after Mackay, 62, takes over from Kahn, who is retiring after 46 years with the brewer, according to a statement today from the London-based brewer. Mackay will be chairman and CEO for a period of one year.
SABMiller has written to shareholders seeking approval of the plans given that U.K. corporate code of governance doesn’t recommend CEOs should become chairman. Management has the “strong backing” of the two biggest shareholders, Altria Group Inc. and Bevco International LLC, the holding company for Colombia’s Santo Domingo family, according to the letter. They hold 27 percent and 14.1 percent respectively, according to data compiled by Bloomberg.
“It again proves there is a lot of stability in this top management team, that for me is the most important conclusion,” Gerard Rijk, an analyst at ING Groep NV in Amsterdam, said by phone. “It’s a continuation of a characteristic which SABMiller is famous.”
Still, many people don’t like chairman becoming CEOs, Rijk said, as the chairman can limit freedom of the new management. “There is a risk on flexibility, new thoughts in the organization, but at this stage of SABMiller, with the big deals done, I think this is risk that can be handled.”
Clark has been SABMiller’s European head since 2003.
SABMiller fell 20.5 pence, or 0.7 percent, to 2,592.5 pence as of 9:02 a.m. in London trading. The decline pared this year’s gain to 14 percent.
SABMiller told shareholders any risk of an “over- concentration of power” by Mackay will be mitigated by the appointment of John Manser as deputy chairman, the one-year timeframe on Mackay’s tenure as executive chairman and Clark’s appointment as a third executive director.
Mackay will become non-executive chairman at the company’s annual general meeting in 2013.
Mackay has led the maker of Grolsch, Peroni and Pilsner Urquell since 1999, overseeing a slew of acquisitions that led to SABMiller becoming the world’s second-biggest brewer by volume. Last year, the company bought Foster’s Group Ltd. in a deal worth about A$10.5 billion ($10.8 billion), helping it to take about half the Australian beer market.
Manser will become deputy chairman, as part of the changes, while Sue Clark, director of corporate affairs, will replace Alan Clark as European head.
Rob Pieterse, an independent non-executive director, will also be retiring from the board on July 26, after four years, SABMiller said in a separate statement.
The brewer said last week it maintained growth in beer volume during the fourth quarter as gains in Africa and Latin America offset a drop in Chinese consumption caused by wet weather. In Europe, lager volumes fell 1 percent due to “subdued” beer market growth and aggressive promotions.
Clark has kept profit margins high compared with rivals and helped the company gain a stake in Turkey’s Anadolu Efes Biracilik & Malt Sanayii AS, ING’s Rijk said.
The executive in 2003 took over the European division, which includes Ukraine, Russia and more developed beer markets including the Czech Republic and U.K. Previously he spent several years overseeing the South Africa beer business.
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