Megabrew Banks May Split $235 Million Fees on Biggest 2015 Deal

  • AB InBev set to pay advisers as much as $115 million
  • SABMiller may pay up to $120 million, according to Freeman

The handful of banks that scored coveted roles advising on Anheuser-Busch InBev NV’s $106 billion planned takeover of SABMiller Plc are set to share as much as $235 million in fees. Among them: five Wall Street stalwarts and one tiny, British boutique with less than a dozen employees. 

AB InBev could pay its advisers from $95 million to $115 million in fees, while SABMiller may pay anywhere in a range of $100 million to $120 million, according to estimates from Freeman & Co. Robey Warshaw LLP, the small firm started in 2013 by two London bankers, as well as JP Morgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. advised SABMiller on the transaction. Lazard Ltd. and Deutsche Bank AG advised AB InBev.

A deal between the brewers would be the biggest globally this year, surpassing Royal Dutch Shell Plc’s $80 billion takeover of BG Group Plc, announced in April, according to data compiled by Bloomberg. Goldman Sachs, JPMorgan, Morgan Stanley and Robey Warshaw also lined up on that deal. AB InBev’s bid adds to a mega year for European mergers, with $1.3 trillion of deals announced in 2015, according to data compiled by Bloomberg.

While AB InBev and SABMiller kept their circle of advisers fairly small, banks that missed out on the lucrative advisory fees can console themselves with renumeration earned from financing the deal.

Companies typically pay 0.3 percent to 0.8 percent of the amounts they raise to the group of financing banks, according to Freeman data. AB InBev lined up banks including Bank of America Corp. and Banco Santander SA to arrange as much as $70 billion in financing for its takeover offer, people familiar with the matter said last month.

A transaction of this size can have a huge impact on the league tables that rank banks’ merger-advisory practices. Goldman Sachs is ranked first in advising on European deals in 2015, followed by JPMorgan and Morgan Stanley. Robey Warshaw -- which has only advised on four deals this year, compared with Goldman Sach’s 166 -- is ranked eighth. Banks on large deals split fees based on the importance of their roles.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE