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As filed with the Securities and Exchange Commission on December 3, 2009

Registration No. 333-[ ]

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Anheuser-Busch InBev SA/NV

(Exact Name of Registrant as Specified in Its Charter)

 

Belgium

(State or other jurisdiction of

incorporation or organization)

 

2082

(Primary Standard Industrial

Classification Code Number)

 

Not Applicable

(IRS Employer

Identification Number)

Brouwerijplein 1,

3000 Leuven, Belgium

(32) 16 27 61 11

(Address and telephone number of Registrant’s principal executive offices)

(FOR CO-REGISTRANTS, PLEASE SEE “TABLE OF CO-REGISTRANTS” ON THE FOLLOWING PAGE)

 

 

John Blood

Anheuser-Busch InBev Services, LLC

250 Park Avenue

New York, New York 10177

(212) 573-4366

(Name, address and telephone number of agent for service)

 

 

with a copy to:

George H. White

Sullivan & Cromwell LLP

1 New Fetter Lane

London EC4A 1AN

(44) 20 7959 8900

 

 

Approximate date of commencement of proposed sale to the public: As promptly as practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

CALCULATION OF REGISTRATION FEE

 

 
Title of Each Class of
Securities to be Registered
  Amount
to be
Registered
    Proposed
Maximum
Offering Price
Per Note
    Proposed
Maximum
Aggregate
Offering
Price (1)
  Amount of
Registration Fee

3.000% Notes due 2012

  $ 1,500,000,000      100   $ 1,500,000,000   $ 83,700

4.125% Notes due 2015

  $ 1,250,000,000      100   $ 1,250,000,000   $ 69,750

5.375% Notes due 2020

  $ 2,250,000,000      100   $ 2,250,000,000   $ 125,550

6.375% Notes due 2040

  $ 500,000,000      100   $ 500,000,000   $ 27,900

Guarantees of 3.000% Notes due 2012  (2)

    N/A (3)     (3)        (3)     (3)

Guarantees of 4.125% Notes due 2015  (2)

    N/A (3)     (3)        (3)     (3)

Guarantees of 5.375% Notes due 2020 (2)

    N/A (3)     (3)        (3)     (3)

Guarantees of 6.375% Notes due 2040 (2)

    N/A (3)     (3)        (3)     (3)
 

 

(1)

Estimated solely for the purpose of calculating the registration fee under Rule 457(f) of the Securities Act of 1933, as amended (the “Securities Act”).

(2)

See inside facing page for additional registrant subsidiary co- issuers and guarantors.

(3)

Pursuant to Rule 457(n) under the Securities Act, no separate filing fee is required for the guarantees.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 


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TABLE OF CO REGISTRANTS

 

Exact Name as Specified in its Charter

 

State or Other
Jurisdiction

of

Incorporation or
Organization

  Primary
Standard
Industrial
Classification
Number
  I.R.S.
Employer
Identification
Number
 

Address, Including Zip Code and
Telephone Number, Including Area
Code, of Principal Executive Offices

Anheuser-Busch InBev Worldwide Inc.*

 

Delaware,

United States

  2082   43-1162835  

One Busch Place, St. Louis,

Missouri 63118, U.S.A.

Tel: +1 (314) 577-2000

AmBrew S.A. .

  Luxembourg   2082   N/A  

5, Parc d’Activité Syrdall, L-5365 Münsbach, Luxembourg

Tel: +352 26 15 96

Cobrew NV/SA

  Belgium   2082   N/A  

Brouwerijplein 1, 3000 Leuven, Belgium

Tel: +32 16 27 61 11

InBev Belgium NV/SA

  Belgium   2082   N/A  

21, Boulevard Industriel, 1070 Brussels (Anderlecht), Belgium

Tel: +32 16 27 61 11

AB InBev France S.A.S.

  France   2082   N/A  

Immeuble le Crystal Zac Euralille Romarin, 38 Place Vauban,

avenue de la République, 59110,
La Madeleine, France

Tel: +33 3 20 48 30 30

InBev Nederland N.V. .

  The Netherlands   2082   N/A  

Ceresstraat 1, 4811 CA Breda,

The Netherlands.

Tel: +31 76 525 2424

Interbrew Central European Holding B.V.

 

 

The Netherlands

 

 

2082

 

 

N/A

 

 

Ceresstraat 1, 4811 CA Breda,

The Netherlands

Tel: +31 76 525 2398

Interbrew International B.V.

  The Netherlands   2082   N/A  

Ceresstraat 1, 4811 CA Breda,

The Netherlands

Tel: +31 76 525 2398

Nimbuspath Limited

  United Kingdom   2082   N/A  

Porter Tun House, 500 Capability Green, Luton, Bedfordshire,

LU1 3LS, United Kingdom

Tel: +44 (0) 1582 391 166

BrandBrew S.A. .

  Luxembourg   2082   N/A  

5 Parc d’Activité Syrdall, L-5365 Munsbach, Luxembourg

Tel: +352 26 15 96

Anheuser-Busch Companies, Inc.

  Delaware, United States   2082   43-1162835  

One Busch Place, St. Louis,

Missouri 63118, U.S.A.

Tel: +1 (314) 577-2000

 

*

Anheuser-Busch InBev Worldwide Inc. is the issuer of the new notes offered hereby. The other listed registrants are guarantors of the new notes.


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED DECEMBER 3, 2009

PROSPECTUS

LOGO

Anheuser-Busch InBev Worldwide Inc.

Offer to Exchange up to

U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040

all of which have been registered under the Securities Act of 1933 For Any and All Outstanding Unregistered

U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040

We are conducting the exchange offers in order to provide you with an opportunity to exchange your unregistered notes for freely tradable notes that have been registered under the Securities Act.

The Exchange Offers

 

 

We will exchange all outstanding old notes that are validly tendered and not validly withdrawn for an equal principal amount of new notes that are freely tradable.

 

 

You may withdraw tenders of old notes at any time prior to the expiration date of the applicable exchange offer.

 

 

Each exchange offer for old notes expires at 5:00 p.m., New York City time, on                     , 2009, unless extended.

 

 

The terms of the new notes to be issued in the exchange offers are substantially identical to the old notes, except that the new notes will be freely tradable. The new notes will have the same financial terms and covenants as the old notes, and are subject to the same business and financial risks.

All untendered old notes will continue to be subject to the restrictions on transfer set forth in the old notes and in the indenture. In general, the old notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offers, we do not currently anticipate that we will register the old notes under the Securities Act.

Each broker-dealer that receives new notes for its own account pursuant to the exchange offers must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for the old notes where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 90 days commencing on the day the relevant exchange offer is consummated (or such shorter period during which participating broker-dealers are required by law to deliver such prospectus) we will make available a prospectus meeting the requirements of the Securities Act for use by broker-dealers in connection with any such resale. See “Plan of Distribution”.

For a more detailed description of the new notes, see “Description of the New Notes” beginning on page 234.

 

 

See “ Risk Factors ” beginning on page 16 for a discussion of certain risks you should consider before participating in the exchange offers.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the new notes to be issued in the exchange offers or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

                    , 2009


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TABLE OF CONTENTS

 

    

Page

General Information

   ii

Presentation of Financial and Other Data

   iii

Presentation of Market Information

   v

Available Information

   vi

Jurisdiction and Service of Process in the United States and Enforcement of Foreign Judgments in Belgium

   vii

Forward-Looking Statements

   vii

Prospectus Summary

   1

Risk Factors

   16

Use of Proceeds

   38

Exchange Rate Information

   38

Capitalisation

   39

Selected Financial Information

   40

Management’s Discussion and Analysis of Financial Condition and Results of Operations

   43

Business Description

   124

Directors, Senior Management and Employees

   170

Major Shareholders and Related Party Transactions

   200

Description of the Issuer, the Parent Guarantor and the Subsidiary Guarantors

   206

The Exchange Offers

   224

Description of the New Notes

   234

Summary of Material United States Federal Income Tax Considerations

   257

Plan of Distribution

   258

Validity of the New Notes and the Guarantees

   260

Experts

   260

Financial Statements

   260

AB InBev Group Actual Historical Financial Information

   F-1

Unaudited Pro-Forma Condensed Consolidated Financial Information

   PF-1

Anheuser-Busch Companies, Inc. Historical Financial Information

   AF-1

 

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GENERAL INFORMATION

In this registration statement on Form F-4 (“ Form F-4 ”) references to:

 

   

“AB InBev”, “we”, “us” and “our” are, as the context requires, to Anheuser-Busch InBev SA/NV or Anheuser-Busch InBev SA/NV and the group of companies owned and/or controlled by Anheuser-Busch InBev SA/NV (including Anheuser-Busch Companies, Inc., for all periods following the closing of the acquisition of Anheuser-Busch by InBev on 18 November 2008);

 

   

“Parent Guarantor” are to Anheuser-Busch InBev SA/NV

 

   

“AB InBev Group” are to Anheuser-Busch InBev SA/NV and the group of companies owned and/or controlled by Anheuser-Busch InBev SA/NV;

 

   

“InBev” or the “InBev Group” are to InBev SA/NV or InBev SA/NV and the group of companies owned and/or controlled by InBev SA/NV, as existing prior to the closing of the Anheuser-Busch acquisition;

 

   

“Anheuser-Busch” are to Anheuser-Busch Companies, Inc. and the group of companies owned and/or controlled by Anheuser-Busch Companies, Inc., as the context requires; and

 

   

“AmBev” are to Companhia de Bebidas das Américas – AmBev, a Brazilian company listed on the New York Stock Exchange and on the São Paulo Stock Exchange.

 

 

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421.B OF THE NEW HAMPSHIRE REVISED STATUTES (“RSA”) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE IMPLIES THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT ANY EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

 

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PRESENTATION OF FINANCIAL AND OTHER DATA

We have prepared our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 and our unaudited condensed consolidated interim financial statements as of and for the six-month periods ended 30 June 2009 and 2008 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and in conformity with International Financial Reporting Standards as adopted by the European Union (“ IFRS ”). The financial information and related discussion and analysis contained in this item are presented in U.S. dollars except as otherwise specified. Unless otherwise specified the financial information analysis in this Form F-4 is based on our actual audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

The Anheuser-Busch acquisition closed on 18 November 2008, and our audited consolidated financial statements as of, and for the year ended, 31 December 2008, reflect the contribution of the Anheuser-Busch business only for the period between the closing of this acquisition on 18 November 2008 and 31 December 2008. As the impact of this acquisition on our actual 2008 results is limited compared to the impact it would have had if we had owned Anheuser-Busch for the entire fiscal year, we have prepared pro-forma income statement information for the year ended 31 December 2008, the “ 2008 full-year pro-forma financial information ”, based on the assumption that the acquisition occurred on 1 January 2008. The 2008 full-year pro-forma financial information is unaudited. The 2008 full-year pro-forma financial information was prepared to illustrate the effects of including the results of operations of the Anheuser-Busch businesses for the period between 1 January 2008 to 17 November 2008 in our actual audited consolidated financial statements for the year ended 31 December 2008, and reflects various adjustments, as described in further detail in the 2008 full-year pro-forma financial information starting on page PF-1 of this Form F-4. Information included in the 2008 full-year pro-forma financial information was prepared on a basis consistent in all material respects with our accounting policies in accordance with IFRS.

The 2008 full-year pro-forma financial information is provided solely for illustrative purposes. The 2008 full-year pro-forma financial information describes a hypothetical situation, is based on assumptions and is inherently uncertain. For instance, the 2008 full-year pro-forma financial information includes certain purchase accounting adjustments, such as the estimated change in depreciation and amortisation expenses on acquired tangible and intangible assets. The 2008 full-year pro-forma financial information does not, however, include any anticipated cost savings or other effects of the planned integration of Anheuser-Busch. Accordingly, the 2008 full-year pro-forma financial information should not be used as an indicator of how our business, financial condition and results of operations would have developed had the structure upon which the 2008 full-year pro-forma financial information is based been in place from 1 January 2008. The 2008 full-year pro-forma financial information is also not intended to be an indicator of our financial condition or results of operations in the future. You should review the 2008 full-year pro-forma financial information together with our audited consolidated financial statements as of, and for the year ended, 31 December 2008. You should also separately review Anheuser-Busch’s unaudited, consolidated financial statements for the nine months ended 30 September 2008 included in this Form F-4.

Prior to 1 January 2009, we used the euro as our financial statements presentation currency. Effective 1 January 2009, we changed the presentation currency of our consolidated financial statements from the euro to the U.S. dollar, reflecting the post-Anheuser-Busch acquisition profile of our revenue and cash flows, which are now primarily generated in U.S. dollars and U.S. dollar-linked currencies. We believe that this change provides greater alignment of our presentation currency with our most significant operating currency and underlying financial performance. For comparability purposes in this Form F-4, we have also restated our historical audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 from the euro to the U.S. dollar. Unless otherwise specified, all financial information included in this Form F-4 has been stated in U.S. dollars.

 

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You should note that we have recently and may continue to dispose of certain of our assets or businesses, and expect to utilise the proceeds from any such disposals to repay indebtedness incurred to finance the Anheuser-Busch acquisition. Accordingly the financial information presented in this Form F-4 may not reflect the scope of our business as it will be conducted in the future.

For financial periods ending after the date of consummation of the Anheuser-Busch acquisition on 18 November 2008, InBev and its subsidiaries and Anheuser-Busch and its subsidiaries have been consolidated into a common group. Therefore, our actual consolidated financial statements after the date of consummation of the Anheuser-Busch acquisition differ materially from the actual historical financial statements of InBev prior to the consummation of the Anheuser-Busch acquisition and of Anheuser-Busch presented in this Form F-4.

All references in this Form F-4 to (i) “ euro ” or “ EUR ” are to the common currency of the European Union, (ii) “ U.S. dollar ”, “ $ ”, or “ USD ” are to the currency of the United States, (iii) “ RMB ” are to the currency of China, (iv) “ CAD ” are to the currency of Canada, (v) “ real ” or “ reais ” are to the currency of Brazil, (vi) “ KRW ” are to the currency of South Korea and (vii) “ GBP ” (pounds sterling) are to the currency of the United Kingdom.

Unless otherwise specified, volumes, as used in this Form F-4, include both beer and non-beer (primarily carbonated soft drinks) volumes. In addition, unless otherwise specified, our volumes include not only brands that we own or license, but also third-party brands that we brew or otherwise produce as a subcontractor, and third-party products that we sell through our distribution network, particularly in Western Europe. Our volume figures in this Form F-4 reflect 100% of the volumes of entities that we fully consolidate in our financial reporting and a proportionate share of the volumes of entities that we proportionately consolidate in our financial reporting, but do not include volumes of our associates or non-consolidated entities. Our pro rata share of volumes in Grupo Modelo, S.A.B. de C.V. (“ Grupo Modelo ”) and Tsingtao Brewery Co., Ltd. (“ Tsingtao ”) are not included in the reported volumes.

The historical volume information of Anheuser-Busch presented in the AF pages of this Form F-4 is presented in barrels. For informational purposes, we estimate that 1 barrel = 1.1734776 hectoliters.

Certain monetary amounts and other figures included in this Form F-4 have been subject to rounding adjustments. Accordingly, any discrepancies in any tables between the totals and the sums of amounts listed are due to rounding.

 

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PRESENTATION OF MARKET INFORMATION

Market information (including market share, market position and industry data for our operating activities and those of our subsidiaries or of companies acquired by us) or other statements presented in this Form F-4 regarding our position (or that of companies acquired by us) relative to our competitors largely reflect the best estimates of our management. These estimates are based upon information obtained from customers, trade or business organisations and associations, other contacts within the industries in which we operate and, in some cases, upon published statistical data or information from independent third parties. Except as otherwise stated, our market share data, as well as our management’s assessment of our comparative competitive position, has been derived by comparing our sales figures for the relevant period to our management’s estimates of our competitors’ sales figures for such period, as well as upon published statistical data and information from independent third parties, and, in particular, the reports published and the information made available by, among others, the local brewers’ associations and the national statistics bureaus in the various countries in which we sell our products. The principal sources generally used include Plato Logic Limited and AC Nielsen, as well as Beverage Marketing Corp. (for the United States), the Brewers Association of Canada (for Canada), AC Nielsen (for Brazil, Croatia, Guatemala, Hungary and Russia), CCR (for Peru and Ecuador), CIES (for Bolivia), CAVEFACE (for Venezuela), CAMERA de cerveza (for Argentina), Belgian Brewers (for Belgium), MREB (for Montenegro), the Korea Alcoholic Liquor Industry Association (for South Korea), the National Statistics Bureau (for China), the British Beer and Pub Association (for the United Kingdom), Deutscher Brauer-Bund (for Germany), Centraal Brouwerij Kantoor—CBK (for the Netherlands), Brasseurs de France (for France), Associazione degli Industriali della Birra e del Malto (for Italy), Fédération des Brasseurs Luxembourgeois (for Luxembourg), the Czech Beer and Malt Association (for the Czech Republic), the MEMRB (for Romania), Union of Brewers in Bulgaria (UBB) (for Bulgaria), government statistics (for Cuba) and other local brewers’ associations (including for the Dominican Republic, Paraguay, Chile, Uruguay, Ukraine and Serbia). You should not rely on the market share and other market information presented herein as precise measures of market share or of other actual conditions.

 

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AVAILABLE INFORMATION

You may read and copy any reports or other information that we file at the public reference rooms of the Securities and Exchange Commission (“ SEC ”) at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC’s regional offices located at the Woolworth Building, 233 Broadway, New York, New York 10279 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Electronic filings made through the Electronic Data Gathering, Analysis and Retrieval System are also publicly available through the SEC’s website on the Internet at www.sec.gov.

We also make available on our website, free of charge, our annual reports on Form 20-F and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our website address is http://www.ab-inbev.com. The information contained on our website is not incorporated by reference in this document.

We will provide you, free of charge, with a copy of the Notes, the indenture and supplemental indentures governing the Notes and the related registration rights agreement. The indenture and the supplemental indentures governing the Notes and the related registration rights agreement are filed as Exhibits 4.1 through 4.7 to this Form F-4. You may also request these documents by contacting us at Anheuser-Busch InBev SA/NV, Brouwerijplein 1, 3000 Leuven, Belgium.

We have filed our amended and restated articles of association and all other deeds that are to be published in the annexes to the Belgian State Gazette with the clerk’s office of the Commercial Court of Brussels (Belgium), where they are available to the public. A copy of the articles of association dated 22 October 2009 has been filed as Exhibit 3.1 to this Form F-4, and is also available on our website under http://www.ab-inbev.com/go/corporate_governance/bylaws.cfm.

In accordance with Belgian law, we must prepare audited annual statutory and consolidated financial statements. The audited annual statutory and consolidated financial statements and the reports of our Board and statutory auditor relating thereto are filed with the Belgian National Bank, where they are available to the public. Furthermore, as a listed company, we publish an annual announcement preceding the publication of our annual financial report (which includes the audited annual financial statements, the report of our Board and the statutory auditor’s report). In addition, we publish interim management statements. Copies of these documents are available on our website under:

 

   

http://www.ab-inbev.com/go/investors/reports_and_publications/statutory_accounts.cfm

 

   

http://www.ab-inbev.com/go/investors/reports_and_publications/annual_and_hy_reports.cfm

 

   

http://www.ab-inbev.com/go/investors/reports_and_publications/quarterly_reports.cfm

We also disclose price sensitive information (inside information) and certain other information to the public. In accordance with the Belgian Royal Decree of 14 November 2007 on the obligations of issuers of financial instruments that are admitted to trading on a regulated market, such information and documentation is made available through our website, press releases and the communication channels of Euronext Brussels.

Our head office is located at Brouwerijplein 1, 3000 Leuven, Belgium. Our telephone number is +32 16 27 61 11 and our website is www.ab-inbev.com. The contents of such website do not form a part of this Form F-4. Although certain references are made to our website in this Form F-4, no information on our website forms part of this Form F-4.

 

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Documents related to us that are available to the public (reports, our Corporate Governance Charter, written communications, financial statements and our historical financial information for each of the three financial years preceding the publication of this Form F-4) can be consulted on our website (www.ab-inbev.com) and at: Anheuser-Busch InBev SA/NV, Brouwerijplein 1, 3000 Leuven, Belgium.

Unless stated otherwise in this Form F-4, none of these documents form part of this Form F-4.

JURISDICTION AND SERVICE OF PROCESS IN THE UNITED STATES AND ENFORCEMENT OF FOREIGN JUDGMENTS IN BELGIUM

We are a Belgian public limited liability company. Most of the members of our Board of Directors and Executive Board of Management and certain of the persons named herein are non-residents of the United States. A substantial portion of our assets and all or a substantial portion of the assets of such non-resident persons are located outside the United States. As a result, it may not be possible for investors to effect service of process upon such persons or us or to enforce against them or us a judgment obtained in U.S. courts. Original actions or actions for the enforcement of judgments of U.S. courts relating to the civil liability provisions of the federal or state securities laws of the United States are not directly enforceable in Belgium. The United States and Belgium do not currently have a multilateral or bilateral treaty providing for reciprocal recognition and enforcement of judgments, other than arbitral awards, in civil and commercial matters. In order for a final judgment for the payment of money rendered by U.S. courts based on civil liability to produce any effect on Belgian soil, it is accordingly required that this judgment be recognised or be declared enforceable by a Belgian court pursuant to the relevant provisions of the 2004 Belgian Code of Private International Law. Recognition or enforcement does not imply a review of the merits of the case and is irrespective of any reciprocity requirement. A U.S. judgment will, however, not be recognised or declared enforceable in Belgium if it infringes upon one or more of the grounds for refusal which are exhaustively listed in Article 25 of the 2004 Belgian Code of Private International Law. In addition to recognition or enforcement, a judgment by a federal or state court in the United States against us may also serve as evidence in a similar action in a Belgian court if it meets the conditions required for the authenticity of judgments according to the law of the state where it was rendered. In addition certain of the Subsidiary Guarantors (as defined herein) are organized outside the United States. Certain of their respective officers and directors reside outside the United States and all or a substantial portion of the assets of such Subsidiary Guarantors and of such officers and directors are located outside the United States. As a result, it may not be possible for investors to effect service of process outside such Subsidiary Guarantor’s jurisdiction of organisation upon such Subsidiary Guarantor or such persons, or to enforce judgments against them obtained in U.S. courts, including any judgment predicated upon United States federal or state securities laws.

FORWARD-LOOKING STATEMENTS

There are statements in this Form F-4, such as statements that include the words or phrases “ will likely result ”, “ are expected to ”, “ will continue ”, “ is anticipated ”, “ estimate ”, “ project ”, “ may ” or similar expressions that are forward-looking statements. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those suggested by these statements due to, among others, the risks or uncertainties listed below. See also “Risk Factors” for further discussion of risks and uncertainties that could impact our business.

These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict, that may cause actual results or developments to differ materially from any future results or developments expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others:

 

   

Greater than expected costs (including taxes) and expenses, including in relation to the integration of acquisitions such as the Anheuser-Busch acquisition;

 

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The risk of unexpected consequences resulting from acquisitions, including the Anheuser-Busch acquisition;

 

   

Our expectations with respect to expansion, projected asset divestitures, premium growth, accretion to reported earnings, working capital improvements and investment income or cash flow projections;

 

   

Lower than expected revenue;

 

   

Greater than expected customer losses and business disruptions including, without limitation, difficulties in maintaining relationships with employees, following the Anheuser-Busch acquisition;

 

   

Limitations on our ability to contain costs and expenses;

 

   

Local, regional, national and international economic conditions, including the risks of a global recession or a recession in one or more of our key markets, and the impact they may have on us and our customers and our assessment of that impact;

 

   

The monetary and interest rate policies of central banks, in particular the European Central Bank, the Board of Governors of the U.S. Federal Reserve System, the Bank of England, and other G-7 central banks;

 

   

Continued availability of financing and our ability to achieve our targeted coverage and debt levels and terms;

 

   

Market risks, such as interest rate risk, foreign exchange rate risk, commodity risk, asset price risk, equity market risk, inflation or deflation;

 

   

Our ability to continue to introduce competitive new products and services on a timely, cost-effective basis;

 

   

The effects of competition and consolidation in the markets in which we operate, which may be influenced by regulation, deregulation or enforcement policies;

 

   

Changes in pricing environments and volatility in commodity prices;

 

   

Regional or general changes in asset valuations;

 

   

Tax consequences of restructuring and our ability to optimise our tax rate after the Anheuser-Busch acquisition;

 

   

Changes in consumer spending;

 

   

The outcome of pending and future litigation and governmental proceedings;

 

   

Changes in government policies;

 

   

Changes in applicable laws, regulations and taxes in jurisdictions in which we operate including the laws and regulations governing our operations, as well as actions or decisions of courts and regulators;

 

   

Natural and other disasters;

 

   

Any inability to economically hedge certain risks;

 

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Inadequate impairment provisions and loss reserves;

 

   

Technological changes; and

 

   

Our success in managing the risks involved in the foregoing.

The cost savings and synergies information related to the Anheuser-Busch acquisition set forth in “Business Description—Strengths and Strategy—Strengths” of this Form F-4 constitute forward-looking statements and may not be representative of the actual cost savings and synergies that will result from the Anheuser-Busch acquisition. Such information included in this Form F-4 reflects potential opportunities for savings and synergies identified by us based on estimates and assumptions that are inherently subject to significant uncertainties which are difficult to predict, and accordingly there can be no assurance that these cost savings and synergies will be realised. The statements relating to the synergies, cost savings and business growth opportunities we expect to continue to achieve following the Anheuser-Busch acquisition are based on assumptions. However, these expected synergies, cost savings and business growth opportunities may not be achieved. There can be no assurance that we will be able to continue to implement successfully the strategic and operational initiatives that are intended.

Our statements regarding market risks, including interest rate risk, foreign exchange rate risk, commodity risk, asset price risk, equity market risk, inflation and deflation, are subject to uncertainty. For example, certain market risk disclosures are dependent on choices about key model characteristics and assumptions and are subject to various limitations. By their nature, certain of the market risk disclosures are only estimates and, as a result, actual future gains and losses could differ materially from those that have been estimated.

We caution that the forward-looking statements in this Form F-4 are further qualified by the risk factors disclosed in “Risk Factors” that could cause actual results to differ materially from those in the forward-looking statements. Subject to our obligations under Belgian and U.S. law in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

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PROSPECTUS SUMMARY

This summary highlights some information from this Form F-4 and it may not contain all of the information that is important to you. You should read the following summary together with the more detailed information regarding us and the new notes being offered in exchange for the old notes in the exchange offers included in this Form F-4.

BUSINESS OVERVIEW

Overview

We are the world’s largest brewing company by volume, and one of the world’s five largest consumer products companies by 2008 EBITDA, as defined, based on the 2008 full-year pro-forma financial information. As a consumer-centric, sales-driven company, we produce, market, distribute and sell a strong, balanced portfolio of nearly 300 beer brands. These include global flagship brands Budweiser, Stella Artois and Beck’s; multi-country brands such as Leffe and Hoegaarden; and many “local champions” such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske and Jupiler. We also produce and distribute soft drinks, particularly in Latin America.

Our brewing heritage and quality are rooted in brewing traditions that originate from the Den Horen brewery in Leuven, Belgium, dating back to 1366, and those of Anheuser & Co brewery, established in 1860 in St. Louis, U.S.A. As at 31 December 2008, we employed approximately 120,000 people, with operations in over 30 countries across the world. Given the breadth of our operations, we are organised along seven business zones or segments: North America, Latin America North, Latin America South, Western Europe, Central & Eastern Europe, Asia Pacific and Global Export & Holding Companies. The first six correspond to specific geographic regions in which our operations are based. As a result, we have a global footprint with a balanced exposure to developed and developing markets and production facilities spread across our six geographic regions.

On 18 November 2008, InBev completed its acquisition of Anheuser-Busch, the largest brewer of beer and other malt beverages in the United States. Following completion of the Anheuser-Busch acquisition, the combined company has significant brewing operations within our North America business zone. On a pro-forma basis for the combined company, the North America business zone would have accounted for 33.8% of our consolidated volumes for the year ended 31 December 2008 as compared to 4.8% of our actual consolidated volumes for the year ended 31 December 2007. Through Anheuser-Busch, we own a number of subsidiaries that conduct various other business operations, including a major manufacturer of aluminum cans and one of the largest recyclers of aluminum cans in the United States by weight.

We also have significant exposure to fast-growing emerging markets in Latin America North (which on a pro-forma basis for the combined company would have accounted for 24.5% of our consolidated volumes in the year ended 31 December 2008), Central & Eastern Europe (which would have accounted for 11.0% on the same basis), Asia Pacific (which would have accounted for 13.4% on the same basis) and Latin America South (which would have accounted for 8.2% on the same basis).

Based on the 2008 pro-forma information for the combined company, our 2008 volumes (beer and non-beer) would have amounted to 416 million hectoliters and our revenue would have amounted to approximately USD 39.0 billion.

THE ISSUER AND THE SUBSIDIARY GUARANTORS

The issuer of the new notes, under the name of InBev Worldwide S.à.r.l, was incorporated on 9 July 2008 as a private limited liability company ( société à responsabilité limitée ) under the Luxembourg act dated 10 August 1915 on commercial companies, as amended. On 19 November 2008, the issuer was domesticated as a

 

 

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corporation in the State of Delaware in accordance with Section 388 of the Delaware General Corporation Law and, in connection with such domestication, changed its name to Anheuser-Busch InBev Worldwide Inc. The Issuer’s registered office is located at 1209 Orange Street, Wilmington, Delaware 19801.

Each of InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc., which are direct or indirect subsidiaries of Anheuser-Busch InBev SA/NV, will, along with Anheuser-Busch InBev SA/NV, jointly and severally guarantee the new notes, on an unconditional, full and irrevocable basis, subject to certain limitations described in “Description of the New Notes”. In addition, such subsidiaries are guarantors of the Anheuser-Busch InBev Worldwide Inc.’s $45,000,000,000 senior facilities agreement and Anheuser-Busch InBev Worldwide Inc.’s January Notes, May Notes and Euro MTN Notes, which are each described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Acquisition of Anheuser-Busch”.

 

 

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THE EXCHANGE OFFERS

 

General

On 16 October 2009, Anheuser-Busch InBev Worldwide Inc. issued U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, which we refer to together as the “ Old Notes ”, in a private offering. At that time, Anheuser-Busch InBev SA/NV, Anheuser-Busch InBev Worldwide Inc. and certain subsidiary guarantors entered into a registration rights agreement, which we refer to as the “ Registration Rights Agreement ”, with the initial purchasers of the Old Notes, for the benefit of the holders of the Old Notes, under which we are required to use commercially reasonable efforts to complete an offer to exchange the Old Notes for new issues of substantially identical series of notes registered under the Securities Act of 1933, or have one or more shelf registration statements in respect of the Old Notes declared effective, prior to 13 July 2010. We are making the exchange offers (as defined below) to satisfy our obligations under the Registration Rights Agreement.

 

The Exchange Offers

We are offering U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012 registered under the Securities Act of 1933, as amended (“ Securities Act ”), for any and all U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012 issued on 16 October 2009.

We are offering U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015 registered under the Securities Act for any and all U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015 issued on 16 October 2009.

We are offering U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 registered under the Securities Act for any and all U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 issued on 16 October 2009.

We are offering U.S.$500,000,000 principal amount of 6.375% Notes due 2040 registered under the Securities Act for any and all U.S.$500,000,000 principal amount of 6.375% Notes due 2040 issued on 16 October 2009.

We refer to each of the above offers as an “ Exchange Offer ” and to them collectively as the “ Exchange Offers ”. Additionally, we refer to the four series of notes described above that are being offered in exchange for the Old Notes pursuant ot the Exchange Offers as the “ New Notes ”. In this prospectus we sometimes refer to the New Notes and the Old Notes together as the “ notes ”.

In order to exchange an Old Note, you must follow the required procedures and we must accept the Old Note for exchange. We will

 

 

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exchange all Old Notes validly offered for exchange, or “tendered”, and not validly withdrawn.

 

Expiration Date

Each Exchange Offer expires at 5:00 p.m., New York City time, on [•] 2009, unless we extend such date or time for an Exchange Offer, which we refer to as the “expiration date”. We may extend one or more of the expiration dates for any reason. We will complete the Exchange Offers and issue the New Notes promptly after the applicable expiration date.

 

Resale of New Notes

Based on interpretive letters of the Securities and Exchange Commission, or “ SEC ”, staff to third parties, we believe that you may offer for resale, resell and otherwise transfer New Notes issued pursuant to the Exchange Offers without compliance with the registration and prospectus delivery provisions of the Securities Act, if you:

 

   

are not a broker-dealer that acquired the Old Notes from us or in market-making transactions or other trading activities;

 

   

acquire the New Notes issued in the Exchange Offers in the ordinary course of your business;

 

   

are not participating, and do not intend to participate, and have no arrangement or understanding with any person to participate in, the distribution of the New Notes issued in the Exchange Offers; and

 

   

are not an “affiliate” of ours, as defined in Rule 405 under the Securities Act.

By tendering Old Notes as described in “The Exchange Offers—Procedures for Tendering”, you will be making representations to this effect. If you fail to satisfy any of these conditions, you cannot rely on the position of the SEC set forth in the interpretive letters referred to above and you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the New Notes.

If you are a broker-dealer that acquired Old Notes as a result of market-making or other trading activities, you must comply with the prospectus delivery requirements of the Securities Act in connection with a resale of the New Notes as described in this summary under “Restrictions on Sale by Broker-Dealers” below.

We base our belief on interpretations by the SEC staff in interpretive letters issued to other issuers in exchange offers like ours. We cannot guarantee that the SEC would make a similar decision about our Exchange Offers. If our belief is wrong, you could incur liability under the Securities Act. We will not protect you against any loss incurred as a result of this liability under the Securities Act.

 

 

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Restrictions on Sale by Broker-Dealers

If you are a broker-dealer that has received New Notes for your own account in exchange for Old Notes that were acquired as a result of market-making or other trading activities, you must acknowledge that you will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of New Notes. For a period of 90 days commencing on the day the relevant Exchange Offer is consummated (or such shorter period during which participating broker-dealers are required by law to deliver such prospectus) we will make available a prospectus meeting the requirements of the Securities Act for use by broker-dealers in connection with any such resale.

 

Consequences If You Do Not Exchange Your Old Notes

If you are eligible to participate in the Exchange Offers and you do not tender your Old Notes, you will not have any further registration or exchange rights and your Old Notes will continue to be subject to transfer restrictions. These transfer restrictions and the availability of New Notes could adversely affect the trading market for your Old Notes. The Old Notes and the New Notes will not be fungible.

 

Procedures for Tendering Old Notes

If you wish to accept one or more of the Exchange Offers, the following must be delivered to the exchange agent identified below:

 

   

your Old Notes by timely confirmation of book-entry transfer through The Depository Trust Company, or “ DTC ”;

 

   

an agent’s message from DTC, stating that the tendering participant agrees to be bound by the letter of transmittal and the terms of the relevant Exchange Offers as described in “The Exchange Offers—Terms of the Exchange Offers”; and

 

   

all other documents required by the letter of transmittal.

These actions must be completed before the expiration of the relevant Exchange Offers.

You must comply with DTC’s standard procedures for electronic tenders, by which you will agree to be bound by the letter of transmittal.

 

Withdrawal Rights

You may withdraw your tender of Old Notes any time prior to the relevant expiration date.

 

Tax Consequences

The exchange of Old Notes for New Notes pursuant to the Exchange Offers generally should not be a taxable event for U.S. federal income tax purposes. See “Material United States Federal Income Tax Considerations”.

 

Use of Proceeds

We will not receive any cash proceeds from the exchange or the issuance of New Notes in connection with the Exchange Offers. Old Notes that are validly tendered and exchanged will be retired and canceled. We will pay all expenses incident to the Exchange Offers.

 

 

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We used all of the net proceeds from the sale of the Old Notes to repay outstanding amounts under our senior facilities agreement, with USD 4.107 billion applied to the Facility C loan and USD 1.348 billion applied to the Facility A loan. As a result, all amounts due under the Facility A loan have now been repaid. The Facility C loan, the Facility A loan and the senior facilities agreement are described in “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition—Senior Facilities Agreement”. No portion of the proceeds from the sale of the Old Notes was on-lent to any member of the AB InBev Group.

 

Exchange Agent

The Bank of New York Mellon Trust Company, N.A. is serving as exchange agent in connection with the Exchange Offers. The address and telephone number of the exchange agent are set forth under “The Exchange Offers—Exchange Agent ”. The Bank of New York Mellon Trust Company, N.A. is also the trustee under the indenture, as supplemented, governing both the New Notes and the Old Notes.

 

 

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THE NEW NOTES

A summary of the terms of the New Notes, which have the same financial terms and covenants as the Old Notes, follows. This summary contains basic information about the New Notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete description of the New Notes, please refer to “Description of the New Notes”.

 

Issuer

Anheuser-Busch InBev Worldwide Inc., a Delaware corporation, which we refer to as the “ Issuer ”.

 

Parent Guarantor

Anheuser-Busch InBev SA/NV, a Belgium public limited liability company, which we refer to as the “ Parent Guarantor ”.

 

Subsidiary Guarantors

Each of the following companies, which are direct or indirect subsidiaries of the Parent Guarantor and are referred to together as the “ Subsidiary Guarantors ”, will, along with the Parent Guarantor, jointly and severally guarantee the New Notes on an unconditional, full and irrevocable basis, subject to certain limitations described in “Description of the New Notes”: InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. We refer to the Subsidiary Guarantors and the Parent Guarantor together as the “ Guarantors ”.

 

New Notes Offered

$1,500,000,000 aggregate principal amount of 3.000% senior notes due 2012, which we refer to as the “ 2012 Notes ”.

$1,250,000,000 aggregate principal amount of 4.125% senior notes due 2015, which we refer to as the “ 2015 Notes ”.

$2,250,000,000 aggregate principal amount of 5.375% senior notes due 2020, which we refer to as the “ 2020 Notes ”.

$500,000,000 aggregate principal amount of 6.375% senior notes due 2040, which we refer to as the “ 2040 Notes ”.

The New Notes will mature on 15 October 2012, 15 January 2015, 15 January 2020 and 15 January 2040, respectively, and are redeemable prior to maturity as described in “Description of the New Notes—Optional Redemption” and “Description of the New Notes—Optional Tax Redemption”.

 

Ranking of the Notes

The New Notes will be senior unsecured obligations of the Issuer and will rank equally with all other existing and future unsecured and unsubordinated debt obligations of the Issuer.

 

Ranking of the Guarantees

Subject to certain limitations described herein, each New Note will be jointly and severally guaranteed by each of the Guarantors, on an unconditional, full and irrevocable basis. We refer to each of such guarantees as a “ Guarantee ” and to such guarantees collectively as the “ Guarantees ”. The Guarantees will be the direct, unconditional,

 

 

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unsecured and unsubordinated general obligations of the Guarantors. The Guarantees will rank pari passu among themselves, without any preference of one over the other by reason of priority of date of issue or otherwise, and at least equally with all other unsecured and unsubordinated general obligations of the Guarantors from time to time outstanding. Each of the Guarantors other than the Parent Guarantor shall be entitled to terminate its Guarantee in certain circumstances as further described under “Description of the New Notes—Guarantees”.

 

Minimum Denomination

The New Notes will be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Interest

The 2012 Notes will bear interest at the rate per annum of 3.000%, the 2015 Notes will bear interest at the rate per annum of 4.125%, the 2020 Notes will bear interest at the rate per annum of 5.375% and the 2040 Notes will bear interest at the rate per annum of 6.375%, in each case from 16 October 2009. Interest on the 2012 Notes will be payable semi-annually in arrears on 15 April and 15 October of each year, and interest on the 2015 Notes, 2020 Notes and 2040 Notes will be payable semi-annually in arrears on 15 January and 15 July of each year, commencing on 15 April 2010, with respect to the 2012 Notes, and 15 July 2010, with respect to the 2015 Notes, 2020 Notes and 2040 Notes (or, if any such date is not a business day, on the next succeeding business day) until the principal of the New Notes is paid or duly made available for payment. Interest on the New Notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest on the New Notes will be paid to the persons in whose names the New Notes (or one or more predecessor notes) are registered at the close of business on 1 April and 1 October, with respect to the 2012 Notes, and 1 January and 1 July, with respect to the 2015 Notes, 2020 Notes and 2040 Notes, as the case may be, immediately preceding the applicable interest payment date, whether or not such date is a business day.

 

Business Day

The term “ business day ” means any day other than a day on which commercial banks or foreign exchange markets are permitted or required to be closed in New York City, London or Brussels. If the date of maturity of interest on or principal of the New Notes or the date fixed for redemption of any New Note is not a business day, then payment of interest or principal need not be made on such date, but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue as a result of the delayed payment.

 

Additional Amounts

To the extent any Guarantor is required to make payments in respect of the New Notes, such Guarantor will make all payments in respect of the New Notes without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organised, or otherwise tax resident or any political subdivision or

 

 

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any authority thereof or therein having power to tax, which we refer to as the “ relevant taxing jurisdiction ”, unless such withholding or deduction is required by law, in which event, such Guarantor will pay to the holders such additional amounts, which we refer to as the “ additional amounts ”, as shall be necessary in order that the net amounts received by the holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such additional amounts shall be payable on account of any taxes or duties in the circumstances described in the prospectus under “Description of the New Notes—Additional Amounts”.

References to principal or interest in respect of the New Notes include any additional amounts, which may be payable as set forth in the indenture governing the New Notes (the “ Indenture ”).

The covenant regarding additional amounts will not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States, but shall apply to the Issuer at any time that the Issuer is incorporated in any jurisdiction outside the United States.

 

Optional Redemption

Each series of New Notes may be redeemed at any time, at the Issuer’s option, as a whole or in part, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to the greater of:

 

   

100% of the aggregate principal amount of the New Notes to be redeemed; and

 

   

as determined by the independent investment banker (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest on the New Notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate described herein plus 25 basis points in the case of the 2012 Notes, 30 basis points in the case of the 2015 Notes and 35 basis points in the case of each of the 2020 Notes and the 2040 Notes;

plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) the redemption date.

 

Optional Tax Redemption

Each series of New Notes may be redeemed at any time, at the Issuer’s or the Parent Guarantor’s option, as a whole, but not in part, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of the New Notes of such series then outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all additional amounts, if any) to (but excluding) the redemption date, if (i) as a result of any

 

 

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change in, or amendment to, the laws, treaties, regulations or rulings of a relevant taxing jurisdiction or in the interpretation, application or administration of any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the issue date (any such change or amendment, a “ change in tax law ”), the Issuer (or, if a payment were then due under a Guarantee, the relevant Guarantor) would be required to pay additional amounts and (ii) such obligation cannot be avoided by the Issuer (or the relevant Guarantor) taking reasonable measures available to it, provided, however , that any series of New Notes may not be redeemed to the extent such additional amounts arise solely as a result of the Issuer assigning its obligations under such New Notes to a Substitute Issuer (as defined in “Description of the New Notes”), unless this assignment to a Substitute Issuer is undertaken as part of a plan of merger by the Parent Guarantor.

No notice of redemption may be given earlier than 90 days prior to the earliest date on which the Issuer or the Guarantor would be obligated to pay the additional amounts if a payment in respect of such series of New Notes were then due.

 

Holders’ Option to Require Repayment upon a Change in Control

As is described in detail below under “Description of the New Notes—Holders’ Option to Require Repayment upon a Change in Control”, in the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs, which we refer to together as an “early redemption event”, (i) the Issuer will (A) within 30 days after becoming aware of the early redemption event, provide written notice thereof to the holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment, which we refer to as the “ effective date ” and which must be a business day not less than 60 and not more than 90 days after the giving of the notice regarding the early redemption event pursuant to subparagraph (i)(A); and (ii) any holder may, by submitting a redemption notice, demand from the Issuer repayment as of the effective date of any (in integral multiples of $1,000) or all of its New Notes which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the effective date (and all additional amounts, if any).

The above provisions on holders’ option to require repayment upon a Change in Control will not be effective unless and until they are approved by a resolution of the general meeting of shareholders of the Parent Guarantor.

The terms “Change of Control”, “Change of Control Period” and “Ratings Downgrade” are defined in “Description of the New Notes—Holders’ Option to Require Repayment upon a Change of Control”.

 

 

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Interest Rate Adjustment Based on Rating Events

As further described below under “Description of the New Notes—Interest Rate Adjustment Based on Rating Events”, the interest rate payable on a series of New Notes will be subject to adjustment from time to time if any of three rating agencies downgrades (or subsequently upgrades) its rating assigned to that series of New Notes below an investment grade rating, based on the lowest two ratings assigned. The interest rate on a series of New Notes will be increased by 25 basis points for every one notch downgrade below an investment grade rating subject to a cap of 200 basis points. Similarly, if at any time the interest rate on a series of New Notes has been increased as a result of a ratings downgrade by a rating agency, and such rating agency subsequently increases its rating of that series of New Notes, the interest rate on that series of New Notes will be decreased by 25 basis points for every one notch upgrade until it reverts to the interest rate payable on that series of New Notes at the date of their issuance. If any of the rating agencies subsequently increases its rating of a series of New Notes to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that rating agency shall no longer apply, and unless one or more other rating agencies rates that series of Notes BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on that series of New Notes at the date of their issuance.

In addition, if at any time during the term of the New Notes, any series of the Notes is rated A-/A3 or above by any two of the specified rating agencies, the interest rate adjustment provision will cease to apply to such series and the effective interest rate on such series of New Notes at original issuance will remain in effect until the maturity or redemption of that series of New Notes.

 

Book-Entry Form

The New Notes will initially be issued to investors in book-entry form only. Fully-registered global notes representing the total aggregate principal amount of the New Notes will be issued and registered in the name of a nominee for DTC, the securities depositary for the New Notes, for credit to accounts of direct or indirect participants in DTC, including Euroclear and Clearstream. Unless and until New Notes in definitive certificated form are issued, the only holder will be Cede & Co., as nominee of DTC, or the nominee of a successor depositary. Except as described in this prospectus, a beneficial owner of any interest in a global note will not be entitled to receive physical delivery of definitive New Notes. Accordingly, each beneficial owner of any interest in a global note must rely on the procedures of DTC, Euroclear, Clearstream, or their participants, as applicable, to exercise any rights under the New Notes.

 

Governing Law

The New Notes, the Guarantees and the Indenture related thereto, will be governed by, and construed in accordance with, the laws of the State of New York.

 

Listing and Trading

The New Notes will not be listed on any securities exchange.

 

Trustee, Principal Paying Agent, Transfer Agent and Registrar

The Trustee, principal paying agent, transfer agent and registrar is The Bank of New York Mellon Trust Company, N.A.

 

 

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SUMMARY FINANCIAL INFORMATION

The summary historical financial information presented below as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, has been derived from our audited consolidated financial statements, which were prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and in conformity with International Financial Reporting Standards as adopted by the European Union, which we refer to as “ IFRS ”. The summary historical financial information presented below as of and for the six-month periods ended 30 June 2009 and 2008 has been derived from our unaudited IFRS condensed consolidated interim financial statements. The interim data include all adjustments, consisting of normally recurring adjustments, necessary for a fair statement of the results for the interim period.

The summary historical financial information presented in the tables below should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements and the accompanying notes and our unaudited condensed consolidated interim financial statements and the accompanying notes that, in each case, have been included in this Form F-4.

Effective 1 January 2009, we changed the presentation currency of our consolidated financial statements from the euro to the U.S. dollar, reflecting the post-Anheuser-Busch acquisition profile of our revenue and cash flows, which are now primarily generated in U.S. dollars and U.S. dollar-linked currencies. We believe that this change provides greater alignment of our presentation currency with our most significant operating currency and underlying financial performance. For comparability purposes in this Form F-4, we have also restated our historical audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, and the summary financial information as of and for the years ended 31 December 2005 and 2004 set out below, from the euro to the U.S. dollar. Unless otherwise specified, all financial information included in this Form F-4 has been stated in U.S. dollars.

For a summary of recent developments affecting us, see “—Recent Developments”.

 

     Six months ended
30 June
   Year ended 31 December (restated)  
     2009    2008    2008    2007    2006    2005     2004  
     (USD million, unless otherwise indicated)  
Income Statement Data    (unaudited)    (audited)    (unaudited)  

Revenue ( 1 )

   17,698    10,563    23,507    19,735    16,692    14,577      10,598   

Profit from operations

   4,928    2,508    5,340    5,872    3,925    2,749      1,625   

Profit

   2,343    1,766    3,126    4,167    2,667    1,753      1,111   

Profit attributable to our equity holders

   1,787    1,207    1,927    3,005    1,770    1,131      889   

EBITDA, ( 2 ) as defined

   6,289    3,350    7,252    7,280    5,296         (3)          (3)  

Ratio of earnings to fixed charges ( 4 )

   2.29    *    2.90    5.88    4.87    3.38      3.75   

Weighted average number of ordinary shares (million shares) ( 5 ) (8)

   1,582    960    999    976    972    960      768   

Diluted weighted average number of ordinary shares (million shares) ( 6 ) (9)

   1,590    963    1,000    981    980    964      773   

Basic earnings per share (USD) ( 7 ) (9)

   1.13    1.26    1.93    3.08    1.82    1.18      1.16   

Diluted earnings per share (USD) ( 8 ) (9)

   1.12    1.25    1.93    3.06    1.81    1.17      1.15   

Dividends per share (USD)

   n/a    n/a    0.35    3.67    0.95    0.57      0.52   

Dividends per share (EUR)

   n/a    n/a    0.28    2.44    0.72    0.48      0.39   

 

*

Not applicable

 

 

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     Six months ended
30 June
    Year ended 31 December
(restated)
 
     2009     2008     2008     2007     2006  
     (USD million, unless otherwise indicated)  
Cash Flow Data    (unaudited)     (audited)  

Cash flow from operating activities

   5,067      1,829      6,158      5,557      4,122   

Cash flow from investing activities

   157      (2,019   (55,503   (3,225   (4,365

Cash flow from financing activities

   (1,452   (330   49,879      (1,327   261   

 

     As of 30 June    As of 31 December (restated)
     2009    2008    2007    2006    2005    2004
     (USD million, unless otherwise indicated)
Balance Sheet Data    (unaudited)    (audited)    (unaudited)

Total assets

   117,699    113,160    42,247    34,566    27,795    25,395

Equity

   27,999    24,431    21,949    17,308    13,979    11,841

Equity attributable to our equity holders

   25,586    22,442    20,057    16,149    13,532    11,331

Issued capital

   1,731    1,730    559    558    554    605

Other Data

                 

Volumes (million hectoliters)

   200    285    271    247    224    154

Book value per share

   16.17    22.46    20.55    16.61    14.09    14.75

 

(1)

Turnover less excise taxes and discounts. In many jurisdictions, excise taxes make up a large proportion of the cost of beer charged to our customers (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Results of Operations—Excise Taxes”).

 

(2)

The following table shows the calculation of our EBITDA, as defined, for the periods shown. A performance measure such as EBITDA, as defined, is a non-IFRS measure. The most directly comparable financial measure to EBITDA, as defined, presented in accordance with IFRS in our consolidated financial statements is profit. EBITDA, as defined, is a measure used by our management to evaluate our business performance and is defined as profit from operations before depreciation, amortisation and impairment. EBITDA, as defined, does, however, have limitations as an analytical tool. It is not a recognised term under IFRS and does not purport to be an alternative to profit as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. As a result, you should not consider EBITDA, as defined, in isolation from, or as a substitute analysis for, our results of operations.

 

    

For a discussion of how we use EBITDA, as defined, and its limitations, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operation—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”.

 

         Six months ended 30 June         Year ended 31 December  
     2009     2008     2008     2007     2006  
     (USD million)  
     (unaudited)     (audited)  

Profit

   2,343      1,766      3,126      4,167      2,667   

Income tax expense

   820      232      674      888      666   

Net finance cost

   1,993      513      1,600      818      593   

Share of result of associates

   (228   (3   (60   (1   (1
                              

Profit from operations

   4,928      2,508      5,340      5,872      3,925   

Depreciation, amortisation and impairment

   1,361      842      1,912      1,408      1,371   
                              

EBITDA, as defined

   6,289      3,350      7,252      7,280      5,296   
                              

 

(3)

EBITDA, as defined, is not available for the years ended 31 December 2005 and 2004.

 

 

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(4)

The ratio of earnings to fixed charges represents the number of times fixed charges are covered by earnings. For the purposes of computing this ratio, earnings consist of profit from operations before taxes and share of results of associates, plus fixed charges, minus interest capitalized during the period. Fixed charges consist of interest and accretion expense, interest on finance lease obligations, interest capitalized, plus one-third of rent expense on operating leases, estimated by the company as representative of the interest factor attributable to such rent expense. We did not have any preferred stock outstanding and did not pay or accrue any preferred stock dividends during the periods presented above. Set forth below is an overview of how we calculate the ratio of earnings to fixed charges for the six months ended 30 June 2009 and each of the five years ended 31 December 2008, 2007, 2006, 2005 and 2004:

 

     Six months
ended
30 June 2009
   Year ended 31 December
        2008    2007    2006    2005    2004
     (USD million)
     (unaudited)    (audited)    (unaudited)

Earnings:

                 

Profit from operations before taxes and share of results of associates

   2,935    3,740    5,054    3,332    2,244    1,412

Add: Fixed charges (below)

   2,281    1,965    1,035    860    941    514

Less: Interest Capitalized (below)

   1    -    -    -    -    -
                             

Total earnings

   5,215    5,705    6,089    4,192    3,185    1,926
                             

Fixed charges:

                 

Interest expense and similar charges

   2,030    1,761    926    771    849    454

Accretion expense

   208    127    49    30    23    7

Interest capitalized

   1    -    -    -    -    -

Estimated interest portion of rental expense

   42    77    60    59    69    53
                             

Total fixed charges

   2,281    1,965    1,035    860    941    514
                             

Ratio of earnings to fixed charges

   2.29    2.90    5.88    4.87    3.38    3.75

 

(5)

Weighted average number of ordinary shares means, for any period, the number of shares outstanding at the beginning of the period, adjusted by the number of shares cancelled, repurchased or issued during the period multiplied by a time-weighting factor.

 

(6)

Diluted weighted average number of ordinary shares means the weighted average number of ordinary shares, adjusted by the effect of share options issued.

 

(7)

Earnings per share means, for any period, profit attributable to our equity holders for the period divided by the weighted average number of ordinary shares.

 

(8)

Diluted earnings per share means, for any period, profit attributable to our equity holders for the period divided by the diluted weighted average number of ordinary shares.

 

(9)

In accordance with IAS33, we have adjusted historical data per share for each of the years ended 31 December 2007, 2006, 2005 and 2004 by an adjustment ratio of 0.6252 as a result of the capital increase pursuant to the rights offering we completed in December 2008 to restate (i) the weighted average number of ordinary shares; (ii) the diluted weighted average number of ordinary shares; (iii) the basic earnings per share; and (iv) the diluted earnings per share.

Recent Developments

For a discussion of our interim financial results for the three months and nine months ended 30 September 2009 and for details of recent transactions impacting our business, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments”.

 

 

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Results of Operations for the Three Months and Nine Months Ended 30 September 2009 Compared to the Three Months and Nine Months Ended 30 September 2008

The table below presents our condensed consolidated results of operations for the three-month and nine-month periods ended 30 September 2009 and 2008. The data for the three months and the nine months ended 30 September 2009 are reported figures and include Anheuser-Busch data for such periods. The data for the three months and the nine months ended 30 September 2008 are also reported figures and, therefore, do not include Anheuser-Busch figures for such periods.

 

     Reported
Three
months
ended 30

September
2009
    Reported
Three
months
ended 30

September
2008
    Reported
Nine
months
ended 30

September
2009
    Reported
Nine
months
ended 30

September
2008
 
    

(USD million, except volumes)

 

Volumes (thousand hectoliters)

   106,609      71,832      306,884      199,295   

Revenue

   9,763      6,061      27,461      16,624   

Cost of sales

   (4,505   (2,559   (12,894   (7,024

Gross profit

   5,259      3,502      14,567      9,600   

Distribution expenses

   (694   (711   (1,970   (2,006

Sales and marketing expenses

   (1,311   (884   (3,582   (2,578

Administrative expenses

   (528   (340   (1,619   (1,071

Other operating income/expenses

   117      104      467      288   

EBITDA, as defined (1)

   3,961      2,020      10,250      5,363   

 

(1)

The following table shows the calculation of our EBITDA, as defined, for the periods shown. For a discussion of how we use EBITDA, as defined, and its limitations, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operation—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”.

 

     Three
months
ended 30

September
2009
    Three
months
ended 30

September
2008
    Nine
months
ended 30

September
2009
    Nine
months
ended 30

September
2008
 
    

(USD million)

 

Profit

   1,844      998      4,187      2,764   

Income tax expense

   601      275      1,421      507   

Net finance cost

   966      281      2,958      794   

Share of result of associates

   (157   (1   (385   (4

Profit from operations

   3,254      1,553      8,181      4,061   
                        

Depreciation, amortisation and impairment

   707      467      2,069      1,302   

EBITDA, as defined

   3,961      2,020      10,250      5,363   
                        

 

 

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RISK FACTORS

We expect to be exposed to some or all of the risks described below in our future operations. Risks to us include, but are not limited to, the risk factors described below. Any of the risk factors described below could also affect our business operations and have a material adverse effect on our business activities, financial condition, results of operations and prospects and cause the value of the New Notes to decline. Moreover, if and to the extent that any of the risks described below materialise, they may occur in combination with other risks which would compound the adverse effect of such risks on our business activities, financial condition, results of operations and prospects.

You should carefully consider the following information in conjunction with the other information contained or incorporated by reference in this document before making any investment decision. The sequence in which the risk factors are presented below is not indicative of their likelihood of occurrence or of the potential magnitude of their financial consequence.

Risks Related to the Exchange Offers

If you do not properly tender your Old Notes, you will continue to hold unregistered Old Notes and your ability to transfer Old Notes will continue to be subject to transfer restrictions, which may adversely affect their market price.

If you do not properly tender your Old Notes for New Notes in the applicable Exchange Offer, you will continue to be subject to restrictions on the transfer of your Old Notes. In general, the Old Notes may not be offered or sold unless they are registered under the Securities Act, as well as applicable state securities laws, or exempt from registration thereunder. Except as required by the Registration Rights Agreement, we do not intend to register resales of the Old Notes under the Securities Act. You should refer to “The Exchange Offers—Procedures For Tendering” for information about how to tender your Old Notes. The tender of Old Notes under the Exchange Offers will reduce the outstanding amount of each series of the Old Notes, which may have an adverse effect upon, and increase the volatility of, the market prices of the Old Notes due to a reduction in liquidity.

Late deliveries of Old Notes and other required documents could prevent you from exchanging your Old Notes.

Holders are responsible for complying with all procedures of the Exchange Offers. The issuance of New Notes in exchange for Old Notes will occur only upon completion of the procedures described under “The Exchange Offers—Procedures For Tendering”. Therefore, holders of Old Notes who wish to exchange them for New Notes should allow sufficient time for timely completion of the exchange procedure. Neither we nor the exchange agent are obligated to extend the Exchange Offers or notify you of any failure to follow the proper procedure or waive any defect if you fail to follow the proper procedure.

If you are a broker-dealer, your ability to transfer the New Notes may be restricted.

A broker-dealer that purchased Old Notes for its own account as part of market making or trading activities must comply with the prospectus delivery requirements of the Securities Act when it sells the New Notes. Our obligation to make this prospectus available to broker-dealers is limited. Consequently, we cannot guarantee that a proper prospectus will be available to broker-dealers wishing to resell their New Notes.

Risks Relating to Our Business

We are exposed to the risks of an economic recession, credit and capital market volatility and economic and financial crisis, which could adversely affect the demand for our products and adversely affect the value of our shares and American depositary shares and the New Notes.

We are exposed to the risk of a global recession or a recession in one or more of our key markets, credit and capital market volatility and economic and financial crisis, which could result in lower revenue and reduced

 

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profit. Any such development could adversely affect demand for beer, which could result in a deterioration in our results of operations.

Beer consumption in many of the jurisdictions in which we operate is closely linked to general economic conditions, with levels of consumption tending to rise during periods of rising per capita income and fall during periods of declining per capita income. Additionally, per capita consumption is inversely related to the sale price of our products.

Besides moving in concert with changes in per capita income, beer consumption also increases or decreases in accordance with changes in disposable income.

Currently, disposable income is low in many of the emerging market countries in which we operate compared to disposable income in more developed countries. Any decrease in disposable income resulting from an increase in inflation, income taxes, the cost of living, or other factors would likely adversely affect demand for beer. Moreover, because a significant portion of our brand portfolio consists of premium beers, our volumes and revenue may be impacted to a greater degree than those of some of our competitors, as some consumers may choose to purchase value or discount brands rather than super-premium, premium or mainstream/mid-market brands. For additional information on segmentation of the beer market and our positioning, see “Business Description—Principal Activities and Products—Beer”.

Capital and credit market volatility, such as has been experienced recently, may result in downward pressure on stock prices and credit capacity of issuers. A continuation or worsening of the levels of market disruption and volatility seen in the last two years could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition, and on the value of our shares and American depositary shares and the New Notes.

We may not be able to obtain the necessary funding for our future capital or refinancing needs.

We may be required to raise additional funds for our future capital needs or refinance our current indebtedness through public or private financing, strategic relationships or other arrangements. There can be no assurance that the funding, if needed, will be available on attractive terms, or at all. We may be required to issue additional equity under unfavourable conditions, which could dilute our existing shareholders. Furthermore, any debt financing, if available, may involve restrictive covenants.

We have incurred substantial indebtedness in connection with the Anheuser-Busch acquisition (see “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition” and “—Risks Relating to the Anheuser-Busch Acquisition”).

Our failure to raise additional equity capital or debt financing or to realise proceeds from asset sales when needed could adversely impact our business, results of operations and financial condition.

Our results could be negatively affected by increasing interest rates.

We use issuances of debt and bank borrowings as a source of funding and, following the Anheuser-Busch acquisition, our level of debt has increased significantly. Nevertheless, pursuant to our capital structure policy, we aim to optimise shareholder value through tax efficient maximisation of cash flow distribution to us from our subsidiaries, while maintaining an investment-grade rating and minimising cash and investments with a return below our weighted average cost of capital.

Some of the debt we have issued or incurred was issued or incurred at variable interest rates, which exposes us to changes in such interest rates. Moreover, a significant part of our external debt is denominated in non-U.S. dollar currencies, including the euro, Brazilian real and the Canadian dollar. Further, the USD 31.396 billion that remained outstanding as of 30 June 2009 under the financing arrangements we entered

 

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into in connection with the Anheuser-Busch acquisition is based on variable interest rates and has therefore increased our exposure to interest rate risk substantially. Although we enter into interest rate swap agreements to manage our interest rate risk, and also enter into cross-currency interest rate swap agreements to manage both our foreign currency risk and interest-rate risk on interest-bearing financial liabilities, there can be no assurance that such instruments will be successful in reducing the risks inherent in exposures to interest rate fluctuations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments” and note 30 to our audited financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further detail on our approach to foreign currency and interest-rate risk. See also “—Risks Relating to the Anheuser-Busch Acquisition—We will face financial risks in refinancing the Anheuser-Busch acquisition due to our increased level of debt and challenging market conditions”.

Changes in the availability or price of raw materials, commodities and energy could have an adverse effect on our results of operations.

A significant portion of our operating expenses are related to raw materials and commodities, such as malt, hops, wheat, corn grits, corn syrup, adjuncts, sugar, aluminium cans, polyethylene terephthalate (“ PET ”), steel, metal closures, plastic closures, labels, preforms, folding carton, soda ash, bottle caps and glass bottles.

The supply and price of raw materials and commodities used for the production of our products can be affected by a number of factors beyond our control, including the level of crop production around the world, export demand, quality and availability of supply, speculative movements in the raw materials or commodities markets, currency fluctuations, governmental regulations and legislation affecting agriculture, trade agreements among producing and consuming nations, adverse weather conditions, economic factors affecting growth decisions, various plant diseases and pests.

We cannot predict future availability or prices of the raw materials or commodities required for our products. The markets in certain raw materials or commodities have experienced and may in the future experience shortages and significant price fluctuations. The foregoing may affect the price and availability of ingredients that we use to manufacture our products, as well as the cans and bottles in which our products are packaged. We may not be able to increase our prices to offset these increased costs or increase our prices without suffering reduced volume, revenue and operating income. We use both fixed price purchasing contracts and commodity derivatives to minimise our exposure to commodity price volatility. To some extent, derivative financial instruments and the terms of supply agreements can protect against increases in materials and commodities costs in the short term. However, derivatives and supply agreements expire and upon expiry are subject to renegotiation and therefore cannot provide complete protection over the medium or longer term. To the extent we fail to adequately manage the risks inherent in such volatility, including if our hedging and derivative arrangements do not effectively or completely hedge changes in commodity prices, our results of operations may be adversely impacted. In addition, it is possible that the hedging and derivative instruments we use to establish the purchase price for commodities in advance of the time of delivery may lock us into prices that are ultimately higher than actual market prices at the time of delivery. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments” for further detail on our approach to hedging commodity price risk.

The production and distribution of our products consumes material amounts of energy, including the consumption of oil-based products and electricity. Energy prices have been subject to significant price volatility in the recent past and may be again in the future. High energy prices over an extended period of time, as well as changes in energy taxation and regulation in certain geographies, may result in a negative effect on operating income and could potentially challenge our profitability in certain markets. There is no guarantee that we will be able to pass along increased energy costs to our customers in every case.

 

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Our results of operations are affected by fluctuations in exchange rates.

As from 1 January 2009, we have reported our consolidated results in U.S. dollars, and we have restated our historical financial statements included in this Form F-4 from the euro to the U.S. dollar. In 2008 on a pro-forma basis for the combined company based on the 2008 full-year pro-forma financial information, we derived approximately 57% of our revenue from operating companies that have non-U.S. dollar functional currencies (that is, in most cases, the local currency of the respective operating company). Consequently, any change in exchange rates between our operating companies’ functional currencies and the U.S. dollar will affect our consolidated income statement and balance sheet when the results of those operating companies are translated into U.S. dollars for reporting purposes. Decreases in the value of our operating companies’ functional currencies against the U.S. dollar will tend to reduce those operating companies’ contributions in dollar terms to our financial condition and results of operations.

In addition to currency translation risk, we incur currency transaction risks whenever one of our operating companies enters into transactions using currencies other than their respective functional currencies, including purchase or sale transactions and the issuance or incurrence of debt. Although we have hedge policies in place to manage commodity price and foreign currency risks to protect our exposure to currencies other than our operating companies’ functional currencies, there can be no assurance that such policies will be able to successfully hedge against the effects of such foreign exchange exposure, particularly over the long-term.

Moreover, although we seek to match borrowing currency liabilities to functional currency cash flows, following the Anheuser-Busch acquisition, much of our debt is denominated in U.S. dollars, while a significant portion of our cash flows are denominated in currencies other than the U.S. dollar. From time to time we enter into financial instruments to mitigate currency risk, but these transactions and any other efforts taken to better match the effective currencies of our liabilities to our cash flows could result in increased costs.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments” and note 30 to our audited financial information as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further detail on our approach to hedging commodity price and foreign currency risk.

Certain of our operations depend on independent distributors or wholesalers to sell our products.

Certain of our operations are dependent on government-controlled or privately owned but independent wholesale distributors for distribution of our products for resale to retail outlets. See “Business Description—Distribution of Products” and “Business Description—Regulations Affecting Our Business” for further information in this respect. There can be no assurance that these distributors, who often act both for us and our competitors, will not give our competitors’ products higher priority, thereby reducing their efforts to sell our products.

In the United States, for instance, we sell substantially all of our beer to independent wholesalers for distribution to retailers and ultimately consumers. As independent companies, wholesalers make their own business decisions that may not always align themselves with our interests. If our wholesalers do not effectively distribute our products, our financial results could be adversely affected.

In addition, contractual restrictions and the regulatory environment of many markets may make it very difficult to change distributors in a number of markets. In certain cases, poor performance by a distributor or wholesaler is not a sufficient reason for replacement. Our consequent inability to replace unproductive or inefficient distributors could adversely impact our business, results of operations and financial condition.

 

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Competition could lead to a reduction of our margins, increase costs and adversely affect our profitability.

Globally, brewers compete mainly on the basis of brand image, price, quality, distribution networks and customer service. Consolidation has significantly increased the capital base and geographic reach of our competitors in some of the markets in which we operate, and competition is expected to increase further as the trend towards consolidation among companies in the beer industry continues.

Competition may divert consumers and customers from our products. Competition in our various markets could cause us to reduce pricing, increase capital investment, increase marketing and other expenditures, prevent us from increasing prices to recover higher costs, and thereby cause us to reduce margins or lose market share. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. Innovation faces inherent risks, and the new products we introduce may not be successful.

Additionally, the absence of level playing fields in some markets and the lack of transparency, or even certain unfair or illegal practices, such as tax evasion and corruption, may skew the competitive environment, with material adverse effects on our profitability or ability to operate.

The ability of our subsidiaries to distribute cash upstream may be subject to various conditions and limitations.

To a large extent, Anheuser-Busch InBev SA/NV is organised as a holding company and our operations are carried out through subsidiaries. Our domestic and foreign subsidiaries’ and affiliated companies’ ability to upstream or distribute cash (to be used, amongst other things, to meet our financial obligations) through dividends, intercompany advances, management fees and other payments is, to a large extent, dependent on the availability of cash flows at the level of such domestic and foreign subsidiaries and affiliated companies and may be restricted by applicable laws and accounting principles. In particular, 29.5% (USD 11.5 billion) of our total pro-forma revenue for the combined company of USD 39.0 billion in 2008 based on our 2008 full-year pro-forma financial information came from our Brazilian listed subsidiary Companhia de Bebidas das Américas—AmBev (“ AmBev ”), which is not wholly-owned and is listed on the São Paulo Stock Exchange and the New York Stock Exchange. Certain of our equity investments (such as our investment in Grupo Modelo) contribute cash flow to us through dividend payments but are not controlled by us, and our receipt of dividend payments from these entities is therefore outside our control. In addition to the above, some of our subsidiaries are subject to laws restricting their ability to pay dividends or the amount of dividends they may pay. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Transfers from Subsidiaries” for further information in this respect.

If we are not able to obtain sufficient cash flows from our domestic and foreign subsidiaries and affiliated companies, this could adversely impact our ability to pay our substantially increased debt resulting from the Anheuser-Busch acquisition and otherwise negatively impact our business, results of operations and financial condition.

An inability to reduce costs could affect profitability.

Our future success and earnings growth depend in part on our ability to be efficient in producing, advertising and selling our products and services. We are pursuing a number of initiatives to improve operational efficiency. Failure to generate significant cost savings and margin improvement through these initiatives could adversely affect our profitability and our ability to achieve our financial goals.

We are exposed to emerging market risks.

A substantial proportion of our operations, representing approximately 36% of 2008 revenue on a pro-forma basis for the combined company based on the 2008 full-year pro-forma financial information, are carried out in emerging markets, including Brazil, Argentina, Venezuela, Bolivia, China, Russia, Ukraine and

 

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other emerging European and Latin American markets. We also have equity investments in brewers in China and Mexico and own breweries in China.

Our operations and equity investments in these markets are subject to the customary risks of operating in developing countries, which include potential political and economic uncertainty, application of exchange controls, nationalisation or expropriation, crime and lack of law enforcement, political insurrection, external interference, currency fluctuations, changes in government policy, political and economic changes, changes in the relations between the countries, actions of governmental authorities affecting trade and foreign investment, regulations on repatriation of funds, interpretation and application of local laws and regulations, enforceability of intellectual property and contract rights, local labour conditions and regulations. Such factors could affect our results by causing interruptions to our operations or by increasing the costs of operating in those countries or by limiting our ability to repatriate profits from those countries. Financial risks of operating in emerging markets also include risks of liquidity, inflation (for example, Brazil, Argentina and Russia have periodically experienced extremely high rates of inflation), devaluation (for example, the Brazilian and Argentine currencies have been devalued frequently during the last four decades), price volatility, currency convertibility and country default. These various factors could adversely impact our business, results of operations and financial condition. Due to our specific exposure, these factors could affect us more than our competitors with less exposure to emerging markets, and any general decline in emerging markets as a whole could impact us disproportionately compared to our competitors.

We may not be able to successfully carry out further acquisitions and business integrations.

We have made in the past and may make in the future acquisitions of, investments in, and joint venture and similar arrangements with, other companies and businesses. We cannot make further acquisitions unless we can identify suitable candidates and agree on the terms with them. Such transactions also involve a number of risks. We may not be able to successfully complete such transactions. After completion of a transaction, we may be required to integrate the acquired companies, businesses or operations into our existing operations. In addition, such transactions may involve the assumption of certain actual or potential, known or unknown, liabilities, which may have a potential impact on our financial risk profile. Further, the price we may pay in any future acquisition may prove to be too high as a result of various factors, such as a significant change in market conditions, the limited opportunity to conduct due diligence prior to a purchase or unexpected changes in the acquired business. See also in this respect “—Risks Relating to the Anheuser-Busch Acquisition”.

We rely on the reputation of our brands.

Our success depends on our ability to maintain and enhance the image and reputation of our existing products and to develop a favourable image and reputation for new products. The image and reputation of our products may be reduced in the future; concerns about product quality, even when unfounded, could tarnish the image and reputation of our products. An event, or series of events, that materially damages the reputation of one or more of our brands could have an adverse effect on the value of that brand and subsequent revenues from that brand or business. Restoring the image and reputation of our products may be costly and may not be possible. Moreover, our marketing efforts are subject to restrictions on the permissible advertising style, media and messages used. In a number of countries, for example, television is a prohibited medium for advertising alcoholic products, and in other countries, television advertising, while permitted, is carefully regulated. Any additional restrictions in such countries, or the introduction of similar restrictions in other countries, may constrain our brand building potential and thus reduce the value of our brands and related revenues.

Negative publicity may harm our business.

Media coverage, and publicity generally, can exert significant influence on consumer behaviour and actions. If the social acceptability of beer or soft drinks were to decline significantly, sales of our products could materially decrease. In recent years, there has been increased public and political attention directed at the alcoholic beverage and soft drink industries. This attention is a result of public concern over alcohol-related

 

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problems, including drunk driving, underage drinking and health consequences resulting from the misuse of beer (for example, alcoholism and obesity), as well as soft-drink related problems, including health consequences resulting from the excessive consumption of soft drinks (for example, obesity). Negative publicity regarding alcohol or soft drink consumption, publication of studies that indicate a significant health risk from consumption of alcohol or soft drinks, or changes in consumer perceptions in relation to alcohol or soft drinks generally could adversely affect the sale and consumption of our products and could harm our business, results of operations, cash flows or financial condition as consumers and customers change their purchasing patterns.

Key brand names are used by us, our subsidiaries, associates and joint ventures, and licensed to third-party brewers. To the extent that we, one of our subsidiaries, associates, joint ventures or licensees are subject to negative publicity, and the negative publicity causes consumers and customers to change their purchasing patterns, it could have a material adverse effect on our business, results of operations, cash flows or financial condition. As we continue to expand our operations into emerging and growth markets, there is a greater risk that we may be subject to negative publicity, in particular in relation to labour rights and local work conditions. Negative publicity that materially damages the reputation of one or more of our brands could have an adverse effect on the value of that brand and subsequent revenues from that brand or business, which could adversely impact our business, results of operations, cash flows and financial condition.

Demand for our products may be adversely affected by changes in consumer preferences and tastes.

We depend on our ability to satisfy consumer preferences and tastes. Consumer preferences and tastes can change in unpredictable ways due to a variety of factors, such as changes in demographics, consumer health concerns about obesity, product attributes and ingredients, changes in travel, vacation or leisure activity patterns, weather, negative publicity resulting from regulatory action or litigation against us or comparable companies or a downturn in economic conditions. Consumers also may begin to prefer the products of competitors or may generally reduce their demand for products in the category. Failure by us to anticipate or respond adequately to changes in consumer preferences and tastes could adversely impact our business, results of operations and financial condition.

Seasonal consumption cycles and adverse weather conditions may result in fluctuations in demand for our products.

Seasonal consumption cycles and adverse weather conditions in the markets in which we operate may have an impact on our operations. This is particularly true in the summer months, when unseasonably cool or wet weather can affect sales volumes. Demand for beer is normally more depressed in our major markets in the Northern Hemisphere during the first and fourth quarters of each year, and our consolidated net revenue from those markets is therefore normally lower during this time. Although this risk is somewhat mitigated by our relatively balanced footprint in both hemispheres, we are relatively more exposed to the markets in the Northern Hemisphere than to the markets in the Southern Hemisphere since the closing of the Anheuser-Busch acquisition, which could adversely impact our business, results of operations and financial condition.

If any of our products is defective or found to contain contaminants, we may be subject to product recalls or other liabilities.

We take precautions to ensure that our beverage products are free from contaminants and that our packaging materials (such as bottles, crowns, cans and other containers) are free of defects. Such precautions include quality-control programmes for primary materials, the production process and our final products. We have established procedures to correct problems detected.

In the event that contamination or a defect does occur in the future, it may lead to business interruptions, product recalls or liability, each of which could have an adverse effect on our business, reputation, prospects, financial condition and results of operations.

 

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Although we maintain insurance policies against certain product liability (but not product recall) risks, we may not be able to enforce our rights in respect of these policies, and, in the event that contamination or a defect occurs, any amounts that we recover may not be sufficient to offset any damage we may suffer, which could adversely impact our business, results of operations and financial condition.

We may not be able to protect our intellectual property rights.

Our future success depends significantly on our ability to protect our current and future brands and products and to defend our intellectual property rights, including trademarks, patents, domain names, trade secrets and know-how. We have been granted numerous trademark registrations covering our brands and products and have filed, and expect to continue to file, trademark and patent applications seeking to protect newly developed brands and products. We cannot be sure that trademark and patent registrations will be issued with respect to any of our applications. There is also a risk that we could, by omission, fail to renew a trademark or patent on a timely basis or that our competitors will challenge, invalidate or circumvent any existing or future trademarks and patents issued to, or licensed by, us.

We cannot be certain that the steps we have taken to protect our portfolio of intellectual property rights (including trademark registration and domain names) will be sufficient or that third parties will not infringe upon or misappropriate proprietary rights. Moreover, some of the countries in which we operate, such as China, offer less intellectual property protection than is available in Europe or the United States. If we are unable to protect our proprietary rights against infringement or misappropriation, it could have a material adverse effect on our business, results of operations, cash flows or financial condition, and in particular, on our ability to develop our business.

We rely on key third parties, including key suppliers, and the termination or modification of the arrangements with such third parties could negatively affect our business.

We rely on key third-party suppliers, including third-party suppliers for a range of raw materials for beer and soft drinks, and for packaging material, including aluminium cans, glass, kegs and PET bottles. We seek to limit our exposure to market fluctuations in these supplies by entering into medium- and long-term fixed-price arrangements. We have a limited number of suppliers of aluminium cans, glass and PET bottles. Consolidation of the aluminium can industry, glass and PET bottle industry in certain markets in which we operate has reduced local supply alternatives and increased the risk of disruption to aluminium can, glass and PET bottle supplies. Although we generally have other suppliers of raw materials and packaging materials, the termination of or material change to arrangements with certain key suppliers, disagreements with suppliers as to payment or other terms, or the failure of a key supplier to meet our contractual obligations or otherwise deliver materials consistent with current usage would or may require us to make purchases from alternative suppliers, in each case at potentially higher prices than those agreed with this supplier, and this could have a material impact on our production, distribution and sale of beer and have a material adverse effect on our business, results of operations, cash flows or financial condition.

A number of key brand names are both licensed to third-party brewers and used by companies over which we do not have control. For instance, our global brand Stella Artois is licensed to third-parties in Algeria, Australia, New Zealand, Tanzania, South Africa and Greece, and another global brand, Beck’s, is licensed to third parties in Algeria, Turkey, Australia, New Zealand, Tunisia, Nigeria and Mauritius. Finally, Budweiser is licensed to third-parties in, amongst other countries, Argentina, Canada, Ireland, Japan, Korea, Panama and Spain. See “Business Description—Licensing” for more information in this respect. To the extent that one of these key brand names or our joint ventures, investments in companies in which we do not own a controlling interest and our licensees are subject to negative publicity, it could have a material adverse effect on our business, results of operations, cash flows or financial condition.

For certain packaging supplies, raw materials and commodities, we rely on a small number of important suppliers. If these suppliers became unable to continue to meet our requirements, and we are unable to develop alternative sources of supply, our operations and financial results could be adversely affected.

 

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The consolidation of retailers may adversely affect us.

The retail industry in Europe, the United States and in other countries in which we operate continues to consolidate. Large retailers may seek to improve profitability and sales by asking for lower prices or increased trade spending. Although retailers purchase products from wholesalers (including in a limited number of markets, from our wholesaler operations), rather than directly from us, the efforts of retailers could result in reduced profitability for the beer industry as a whole and indirectly adversely affect our financial results.

We could incur significant costs as a result of compliance with, and/or violations of or liabilities under various regulations that govern our operations.

Our business is highly regulated in many of the countries in which we operate. The regulations adopted by the authorities in these countries govern many parts of our operations, including brewing, marketing and advertising (in particular to persons under the legal drinking age), transportation, distributor relationships and sales. We may be subject to claims that we have not complied with existing laws and regulations, which could result in fines and penalties. We are also routinely subject to new or modified laws and regulations with which we must comply in order to avoid claims, fines and other penalties, which could adversely impact our business, results of operations and financial condition. There can be no assurance that we will not incur material costs or liabilities in connection with compliance with applicable regulatory requirements, or that such regulation will not interfere with our beer or soft drinks businesses.

The level of regulation to which our businesses are subject can be affected by changes in the public perception of beer consumption. In recent years, there has been increased social and political attention in certain countries directed at the alcoholic beverage industry, and governmental bodies may respond to any public criticism by implementing further regulatory restrictions on opening hours, drinking ages or advertising. Such public concern and any resulting restrictions may cause the social acceptability of beer to decline significantly and consumption trends to shift away from beer to non-alcoholic beverages, which would have a material adverse effect on our business, financial condition and results of operations.

We are exposed to the risk of litigation.

We are now and may in the future be party to legal proceedings and claims and significant damages may be asserted against us. See “Business Description—Legal and Arbitration Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Contingencies—Contingencies” and note 33 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for a description of certain material contingencies which we believe will possibly (but not probably) be realised. Given the inherent uncertainty of litigation, it is possible that we might incur liabilities as a consequence of the proceedings and claims brought against us, including those not currently believed by us to be possible.

Moreover, companies in the alcoholic beverage industry are, from time to time, exposed to collective suits (class actions) or other litigation relating to alcohol advertising, alcohol abuse problems or health consequences from the excessive consumption of alcohol. As an illustration, certain beer and alcoholic beverage producers from the United States, Canada and Europe were recently involved in class actions in the U.S. seeking damages for alleged marketing of alcoholic beverages to underage consumers. If any of these types of litigation result in fines, damages or reputational damage for us, this could have a material adverse effect on our business, results of operations, cash flows or financial position.

See “Legal and Arbitration Proceedings” for additional information on litigation matters.

The beer and beverage industry may be subject to changes in taxation.

Taxation on our beer and non-beer products in the countries in which we operate is comprised of different taxes specific to each jurisdiction, such as excise and other indirect taxes. In many jurisdictions, such

 

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excise and other indirect taxes make up a large proportion of the cost of beer charged to customers. Increases in excise and other indirect taxes applicable to our products either on an absolute basis or relative to the levels applicable to other beverages tend to adversely affect our revenue or margins, both by reducing overall consumption and by encouraging consumers to switch to lower-taxed categories of beverages. These increases also adversely affect the affordability of our products and our ability to raise prices. For example, in November 2008 the Brazilian Congress approved certain changes (effective 1 January 2009) to the taxable basis and tax rates of the Imposto Sobre Produtos Industrializados (the Brazilian federal excise tax) and the PIS/COFINS (Brazilian social contributions). Under the previous system, these taxes were paid as a fixed rate per hectoliter by all taxpayers. The new system provides that higher priced brands will pay higher taxes per hectoliter than lower priced brands. The actual increase in AmBev’s federal excise tax and PIS/COFINS tax burden will depend on AmBev’s price, packaging and brand mix, but we estimate that AmBev’s total tax burden regarding such taxes will increase approximately 15%.

Similarly, the United States brewing industry is subject to significant taxation. The United States federal government currently levies an excise tax of $18 per barrel (equivalent to 1.1734776 hectoliters) of beer sold for consumption in the United States. All states also levy excise and/or sales taxes on alcoholic beverages. From time to time, there are proposals to increase these taxes, and as a result of the current economic climate and the fiscal difficulties of some states, these proposals have become more prevalent. Earlier this year, the State of New York increased its excise tax on alcohol, and the State of Kentucky increased its retail tax rate on off-premise alcohol sales. In addition, although no legislation has been introduced to this effect, there have been proposals to increase federal excise taxes on alcohol to raise revenue to pay the costs of health care proposals. Increase in excises taxes on alcohol could adversely affect our United States business or its profitability.

In the second half of 2009, the governments of Russia and the Ukraine have considered increasing the excise tax rates on beer. A 200% increase in the excise tax on regular-strength beer has been adopted by the Russian parliament, with the upper legislative chamber and the president still considering the legislation. If enacted, this tax could result in average price increases of up to 25%, and would likely cause our volumes of beer sold in Russia to decrease. In the Ukraine, the proposed increase seeks to double excise taxes on all beers. Such an increase could result in an average price increase of up to 14%, and would likely cause our volumes of beer sold in the Ukraine to decrease.

To the extent that the effect of the tax reforms described above or other proposed changes to excise and other indirect duties in the countries in which we operate is to increase the total burden of indirect taxation on our products, the results of our operations in those countries could be adversely affected.

In addition to excise and other indirect duties, we are subject to income and other taxes in the countries in which we operate. There can be no assurance that the operations of our breweries and other facilities will not become subject to increased taxation by national, local or foreign authorities or that we and our subsidiaries will not become subject to higher corporate income tax rates or to new or modified taxation regulations and requirements. Any such increases or changes in taxation would tend to adversely impact our results of operations.

We are exposed to antitrust and competition laws in certain jurisdictions and the risk of changes in such laws or in the interpretation and enforcement of existing antitrust and competition laws.

We are subject to antitrust and competition laws in the jurisdictions in which we operate and may be subject to regulatory scrutiny in certain of these jurisdictions, including due to our size and market share in such jurisdictions. In a number of the jurisdictions in which we operate, we produce and/or sell a significant portion of the beer consumed. Our ability to grow through acquisitions in certain countries might be limited due to our important position in those markets. For instance, our Brazilian listed subsidiary, AmBev, has been subject to monitoring by Brazilian antitrust authorities (see “Business Description—Legal and Arbitration Proceedings—AmBev and its Subsidiaries—Antitrust Matters”). There can be no assurance that the introduction of new competition laws in the jurisdictions in which we operate, the interpretation of existing antitrust or competition

 

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laws or the enforcement of existing antitrust or competition laws, or any agreements with antitrust or competition authorities, against us or our subsidiaries, including AmBev, will not affect our business or the businesses of our subsidiaries in the future.

Our operations are subject to environmental regulations, which could expose us to significant compliance costs and litigation relating to environmental issues.

Our operations are subject to environmental regulations by national, state and local agencies, including, in certain cases, regulations that impose liability without regard to fault. These regulations can result in liability which might adversely affect our operations. The environmental regulatory climate in the markets in which we operate is becoming stricter, with greater emphasis on enforcement.

While we have budgeted for future capital and operating expenditures to maintain compliance with environmental laws and regulations, there can be no assurance that we will not incur substantial environmental liability or that applicable environmental laws and regulations will not change or become more stringent in the future.

We operate a joint venture in Cuba, in which the Government of Cuba is our joint venture partner. Cuba has been identified by the U.S. Department of State as a state sponsor of terrorism and is targeted by broad and comprehensive economic and trade sanctions of the United States. Our operations in Cuba may adversely affect our reputation and the liquidity and value of our securities.

We own indirectly a 50% equity interest in Cerveceria Bucanero S.A., a Cuban company in the business of producing and selling beer. The other 50% equity interest is owned by the Government of Cuba. Cerveceria Bucanero S.A. is operated as a joint venture, in which we appoint the general manager. Cerveceria Bucanero S.A.’s main brands are Bucanero and Cristal. In 2008, Cerveceria Bucanero S.A. sold 1.07 million hectoliters, representing about 0.3% of our global volume of 416 million hectoliters based on pro-forma information for our combined company. Although Cerveceria Bucanero S.A.’s production is primarily sold in Cuba, a small portion of its production is exported and sold by certain of our non-U.S. affiliates in other countries outside Cuba (but not the United States). Cerveceria Bucanero S.A. also imports and sells in Cuba a small quantity of Becks branded products produced by one of our German subsidiaries.

Cuba has been identified by the United States government as a state sponsor of terrorism, and the U.S. Treasury Department’s Office of Foreign Assets Control and the U.S. Commerce Department together administer and enforce broad and comprehensive economic and trade sanctions based on U.S. foreign policy towards Cuba. Although our operations in Cuba are quantitatively immaterial, our overall business reputation may suffer or we may face additional regulatory scrutiny as a result of our activities in Cuba based on its identification as a state sponsor of terrorism and target of U.S. economic and trade sanctions. In addition, there are initiatives by federal and state lawmakers in the United States, and certain U.S. institutional investors, including pension funds, to adopt laws, regulations or policies requiring divestment from, or reporting of interests in to facilitate divestment from, companies that do business with countries designated as state sponsors of terrorism, including Cuba. If investors decide to liquidate or otherwise divest their investments in companies that have operations of any magnitude in Cuba, the market in and value of our securities could be adversely impacted.

In addition, the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (known as the “ Helms-Burton Act ”) authorises private lawsuits for damages against anyone who traffics in property confiscated without compensation by the Government of Cuba from persons who at the time were, or have since become, nationals of the United States. Although this section of the Helms-Burton Act is currently suspended by discretionary presidential action, the suspension may not continue in the future. Claims accrue notwithstanding the suspension and may be asserted if the suspension is discontinued. The Helms-Burton Act also includes a section that authorises the U.S. Department of State to prohibit entry into the United States of non-U.S. persons who traffic in confiscated property, and corporate officers and principals of such persons, and their families. We have received notice of claims purporting to be made under the Helms-Burton Act relating to Cerveceria

 

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Bucanero S.A.’s use of a trademark, which is alleged to have been confiscated by the Cuban government and trafficked by us through our ownership and management of Cerveceria Bucanero S.A. Although we have attempted to review and evaluate the validity of the claims, due to the uncertain underlying circumstances, we are currently unable to express a view as to the validity of such claims, or as to the standing of the claimants to pursue them.

We may not be able to recruit or retain key personnel.

In order to develop, support and market our products, we must hire and retain skilled employees with particular expertise. The implementation of our strategic business plans could be undermined by a failure to recruit or retain key personnel or the unexpected loss of senior employees, including in acquired companies.

Our success following the Anheuser-Busch acquisition will also depend, among other things, on our capacity to retain the key employees of Anheuser-Busch and InBev. These key employees could leave their employment because of the uncertainties about their roles in our combined company, difficulties related to the combination, or a general desire not to remain with us. Redundancies and early retirements at Anheuser-Busch, made in connection with the integration of InBev and Anheuser-Busch following the Anheuser-Busch acquisition, could also impact our ability to retain key personnel at Anheuser-Busch and relations with the Anheuser-Busch workforce. Moreover, we will have to address issues inherent in the management of a greater number of employees in some very diverse geographic areas. Therefore, it is not certain that we will be able to attract or retain our key employees and successfully manage them, which could disrupt our business and have an unfavourable material effect on our financial position, our income from operations and our competitive position.

Our success also depends upon maintaining good relations with our workforce. A substantial majority of our workforce in several of our operations is unionised. For instance, a majority of the hourly employees at breweries in the U.S. are represented by the International Brotherhood of Teamsters. Any work stoppages or strikes—which tend to arise at the occasion of the renegotiation of collective bargaining agreements—could adversely affect our ability to operate our businesses. The reorganisation and restructuring of our business to meet current market challenges or as a result of the Anheuser-Busch acquisition has also led to a more strained relationship with unions in certain of our business zones. There can be no assurance that any increase in labour costs would not adversely impact our business, results of operations and financial condition.

Information technology failures could disrupt our operations.

We increasingly rely on information technology systems to process, transmit, and store electronic information. A significant portion of the communication between our personnel, customers, and suppliers depends on information technology. As with all large systems, our information systems may be vulnerable to a variety of interruptions due to events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers or other security issues. These or other similar interruptions could disrupt our operations, cash flows or financial condition.

We depend on information technology to enable us to operate efficiently and interface with customers, as well as to maintain in-house management and control. We have also entered into various information technology services agreements (with, among others, IBM Belgium, BT Limited Belgian Branch and LogicaCMG SA/NV) pursuant to which our information technology infrastructure is outsourced. The concentration of processes in shared services centres means that any disruption could impact a large portion of our business within the operating zones served. If we do not allocate, and effectively manage, the resources necessary to build and sustain the proper technology infrastructure, we could be subject to transaction errors, processing inefficiencies, loss of customers, business disruptions, or the loss of or damage to intellectual property through security breach. As with all information technology systems, our system could also be penetrated by outside parties intent on extracting information, corrupting information or disrupting business processes. Such interruptions could disrupt our business and could have a material adverse effect on our business, results of operations, cash flows or financial condition.

 

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Natural and other disasters could disrupt our operations.

Our business and operating results could be negatively impacted by social, technical or physical risks such as earthquakes, hurricanes, flooding, fire, power loss, loss of water supply, telecommunications and information technology system failures, political instability, military conflict and uncertainties arising from terrorist attacks, including a global economic slowdown, the economic consequences of any military action and associated political instability.

Our insurance coverage may not be sufficient.

The cost of some of our insurance policies could increase in the future. In addition, some types of losses, such as losses resulting from wars, acts of terrorism, or natural disasters, generally are not insured because they are either uninsurable or it is not economically practical to obtain insurance. Moreover, insurers recently have become more reluctant to insure against these types of events. Should an uninsured loss or a loss in excess of insured limits occur, this could adversely impact our business, results of operations and financial condition.

Risks Relating to the Anheuser-Busch Acquisition

We face financial risks due to our increased level of debt and challenging market conditions.

We financed the Anheuser-Busch acquisition with a combination of a fully committed USD 45 billion senior debt facility (of which USD 44 billion was ultimately drawn) and a fully committed bridge facility of USD 9.8 billion. On 18 December 2008, we repaid the debt incurred under the bridge facility with the net proceeds of our rights offering, which closed on 16 December 2008, and cash proceeds we received from hedging the foreign exchange rate between the euro and the U.S. dollar in connection with the rights offering. We have also refinanced a portion of the debt incurred under the senior facility with a combination of the net proceeds from certain debt offerings, the net proceeds of the disposal of certain assets and businesses, and cash from operations, as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Net debt and Equity”. The terms of the senior financing arrangements, as well as their intended uses, are described under “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”.

The senior debt facility we entered into in connection with the Anheuser-Busch acquisition could have significant consequences, including:

 

   

whether or not we are able to refinance the indebtedness incurred in connection with the Anheuser-Busch acquisition through asset disposals, the portion of our consolidated balance sheet represented by debt will remain significantly higher as compared to our historical position.

Our consolidated liabilities following the Anheuser-Busch acquisition also include any outstanding Anheuser-Busch indebtedness, including indebtedness not refinanced in connection with the acquisition. As at 30 June 2009, the total long-term indebtedness of Anheuser-Busch was USD 5.8 billion after purchase price allocation. Our increased level of debt could have significant consequences, including:

 

   

increasing our vulnerability to general adverse economic and industry conditions;

 

   

limiting our ability to fund future working capital and capital expenditure, to engage in future acquisitions or development activities or to otherwise realise the value of our assets and opportunities fully because of the need to dedicate a substantial portion of our cash flow from operations to payments of interest and principal on our debt or to comply with any restrictive terms of our debt;

 

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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

 

   

impairing our ability to obtain additional financing in the future;

 

   

requiring us to issue additional equity (possibly under unfavourable conditions); and

 

   

placing us at a competitive disadvantage compared to our competitors that have less debt.

Further, a credit rating downgrade affecting us as a result of increased leverage or other reasons could have a material adverse affect on our ability to finance our ongoing operations or to refinance our existing indebtedness. In addition, if we fail to comply with the covenants or other terms of any agreements governing these facilities, our lenders will have the right to accelerate the maturity of that debt.

We may reduce the amount of dividends we will pay in the next two to three years and may have to make further reductions or reduce dividends for a longer period as a result of our increased level of debt, our strategy to reduce our leverage and the effect of the financial covenants in the debt facilities entered into to fund the Anheuser-Busch acquisition. See “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition—Senior Facilities Agreement—Financial Condition Undertaking” for a description of the main covenants under our senior facilities agreement.

Our ability to repay our outstanding indebtedness will depend upon market conditions. The capital and credit markets have been experiencing volatility and disruption for more than twelve months. In the final months of 2008, for example, the volatility and disruption reached unprecedented levels. In some cases, the markets produced downward pressure on stock prices and credit capacity for certain issuers without regard to those issuers’ underlying financial strength. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and institutional investors have reduced, and in some cases, ceased to provide funding to borrowers. If such unfavourable conditions continue or worsen, our costs could increase beyond what is anticipated. Such costs could have a material adverse impact on our cash flows, results of operations or both. In addition, an inability to refinance all or a substantial amount of our debt obligations when they become due would have a material adverse effect on our financial condition and results of operations.

We may fail to realise the anticipated business growth opportunities, cost savings, increased profits, synergies and other benefits anticipated from the Anheuser-Busch acquisition.

Achieving the advantages of the Anheuser-Busch acquisition will depend partly on the continued rapid and efficient combination of the activities of InBev and Anheuser-Busch, two companies of considerable size that functioned independently and were incorporated in different countries, with geographically dispersed operations, and with different business cultures and compensation structures.

The integration process involves inherent costs and uncertainties, and there is no assurance that the Anheuser-Busch acquisition will achieve anticipated business growth opportunities, cost savings, increased profits, synergies and other benefits. We believe the consideration paid for the Anheuser-Busch acquisition was justified, in part, by the business growth opportunities, cost savings, increased profits, synergies, revenue benefits and other benefits we anticipate achieving by combining our InBev operations with those of Anheuser-Busch. However, these anticipated business growth opportunities, cost savings, increased profits, synergies and other benefits may not develop, and the assumptions upon which we determined the consideration paid for the Anheuser-Busch acquisition may prove to be incorrect because, among other things, such assumptions were based on publicly available information. In addition, benefits may be lower than anticipated if we are not able to successfully introduce the Anheuser-Busch brands (such as Budweiser) into the markets outside the United States in which we intend to do so, or if we fail to successfully use the intellectual property rights of any such brands in

 

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those markets, for example if we are legally restricted in using such rights, including as a result of third-party ownership of the relevant trademarks in various countries. Further, anticipated benefits may be adversely affected by a negative reaction of consumers or customers to the acquisition.

Implementation of the acquisition and the successful integration of Anheuser-Busch will also require a significant amount of management time and, thus, may affect or impair management’s ability to run our business effectively during the period of the acquisition and integration. In addition, we may not have, or be able to retain, employees with the appropriate skill sets for the tasks associated with our integration plan, which could adversely affect the integration of Anheuser-Busch. In addition, employee departures and early retirements in the process of achieving synergies and company integration may create management challenges in respect of the businesses that have been acquired.

Although the estimated expense savings and revenue synergies contemplated by the Anheuser-Busch acquisition are significant, there can be no assurance that we will realise these benefits in the time expected, or at all. Any failures, material delays or unexpected costs of the integration process could therefore have a material adverse effect on our business, results of operations and financial condition.

An impairment of goodwill or other intangible assets would adversely affect our financial condition and results of operations.

As a result of the Anheuser-Busch acquisition, we have recognised USD 32.2 billion of goodwill on our balance sheet and have recorded several brands from the Anheuser-Busch business (including brands in the Budweiser brand family, the Michelob brand family, the Busch brand family and the Natural brand family) as intangible assets with indefinite life with a fair value of USD 21.5 billion. Under IFRS, goodwill and intangible assets with indefinite life are not amortised but are tested for impairment annually, or more often if an event or circumstance indicates that an impairment loss may have been incurred. Other intangible assets with a finite life are amortised on a straight-line basis over their estimated useful lives and reviewed for impairment whenever there is an indication of impairment. In particular, if the combination of the businesses meets with unexpected difficulties, or if our business does not develop as expected, impairment charges may be incurred in the future that could be significant and that could have an adverse effect on our results of operations and financial condition.

We may not be able to complete any planned or other restructuring or divestitures in connection with the Anheuser-Busch acquisition promptly, or at all.

Following the Anheuser-Busch acquisition, we have recently and may continue to dispose of certain assets or businesses of InBev or Anheuser-Busch, and we expect to utilise the proceeds from any such disposals to repay indebtedness incurred to finance the acquisition. However, we may not be able to affect any restructuring or divestitures at the time intended, or at all, or at the desired price, especially in challenging market conditions. In addition, any restructuring or divestiture could be the subject of challenges or litigation, and a court could delay any such transactions or prohibit them from occurring on their proposed terms, or from occurring at all, which could adversely affect the funding, synergies and cost savings sought to be achieved in connection with the Anheuser-Busch acquisition.

Actions taken to enjoin the integration of our InBev and Anheuser-Busch businesses could significantly reduce the expected advantages thereof and could have a material adverse effect on us.

On 10 September 2008 an action brought under Section 7 of the Clayton Antitrust Act entitled Ginsburg et al. v. InBev NV/SA et al., C.A. No. 08-1375, was filed against InBev, Anheuser-Busch and Anheuser-Busch, Inc. in the United States District Court for the Eastern District of Missouri. The complaint alleges that the Anheuser-Busch acquisition will have certain anticompetitive effects and consequences on the beer industry and

 

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will create a monopoly in the production and sale of beer in the United States. Plaintiffs generally seek declaratory relief that the Anheuser-Busch acquisition violates Section 7 of the Clayton Antitrust Act, injunctive relief to prevent consummation of the acquisition, and fees and expenses. On 18 November 2008 plaintiffs’ request for injunctive relief was denied. On 3 August 2009 the Court granted defendants’ Motion to Dismiss plaintiffs claims with prejudice. On 4 August 2009 the Court entered judgment in favour of the defendants. On 19 August 2009, plaintiffs filed an appeal of such judgment. We continue to vigorously defend against these claims through the appellate process.

On 16 October 2008, Grupo Modelo, Diblo S.A. de C.V. and the Grupo Modelo series A shareholders filed a notice of arbitration, under the arbitration rules of the United Nations Commission on International Trade Law, against Anheuser-Busch, Anheuser-Busch International Inc. and Anheuser-Busch International Holdings Inc. The notice of arbitration claimed the transaction between Anheuser-Busch and InBev violated provisions of the 1993 investment agreement, governed by the law of the United Mexican States, between the Anheuser-Busch entities, Grupo Modelo, Diblo and the series A shareholders. It seeks post-closing relief, including (i) a declaration that Anheuser-Busch breached the 1993 investment agreement, (ii) rescission of certain continuing rights and obligations under the 1993 investment agreement, (iii) a permanent injunction against Anheuser-Busch or its successors from exercising governance rights under the 1993 investment agreement, (iv) suspension of Anheuser-Busch’s right to exercise a right of first refusal to purchase the stock of Grupo Modelo held by the series A shareholders, (v) “rectification” of the 1993 investment agreement to add additional restrictions on the Anheuser-Busch entities and (vi) money damages of up to $2.5 billion. The respondents believe that the claims are without merit because, among other things, there is no change of control clause in the investment agreement and no sale or transfer of the shares of Grupo Modelo and Diblo held by Anheuser-Busch International Holdings Inc. occurred. However, the relief sought by Grupo Modelo, Diblo and its series A shareholders in the arbitral proceeding or any other equitable or other relief they may seek may have an adverse effect on us, including by limiting our ability to exercise governance rights under the investment agreement with Grupo Modelo after the closing of the Anheuser-Busch acquisition. On 2 February 2009, the arbitration panel denied Grupo Modelo’s request for interim measures that would have prevented Anheuser-Busch from exercising its corporate governance rights pending the final arbitration proceeding. The panel also ruled that Anheuser-Busch was to provide 90 days notice if it intends to sell its shares. In August 2009, the final arbitration proceeding was conducted in New York City. The arbitration panel has not yet issued a ruling.

See “Business Description—Legal and Arbitration Proceedings—Anheuser-Busch—Grupo Modelo Arbitration”.

Any of the proceedings or actions that seek equitable or other relief that affects our combination with Anheuser-Busch and our operations in specific jurisdictions or our ability or that of our subsidiaries to exercise rights under existing agreements, such as the Grupo Modelo investment agreement, or that may require us to take other actions, including the divestiture of any of our assets or businesses, could diminish substantially the synergies and the advantages which we expect from the Anheuser-Busch acquisition, and have a material adverse effect on us and on the trading price of our securities.

The Anheuser-Busch acquisition was subject to the review and authorisation of various governmental authorities, which imposed conditions that could have an unfavourable impact on InBev and Anheuser-Busch.

On 14 November 2008, we reached a proposed consent final judgment with Anheuser-Busch and the U.S. Department of Justice that permitted the completion of our acquisition of Anheuser-Busch subject to certain actions being taken in accordance with the terms of the proposed consent final judgment, filed on 14 November 2008 in the U.S. District Court for the District of Columbia. These actions were completed in February 2009 with our sale of InBev USA LLC (d/b/a Labatt USA) to KPS Capital Partners, LP. See “Legal and Arbitration Proceedings—Anheuser-Busch—Acquisition Antitrust Matters—United States”. The proposed consent final judgment received final approval by the U.S. District Court for the District of Columbia on 11 August 2009.

 

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In addition, the U.S. antitrust laws enable the Department of Justice and others, such as U.S. state governments and private individuals, to bring antitrust actions contending that an already completed merger substantially lessens competition or has created a monopoly or otherwise violates the antitrust laws in different or additional respects not contemplated by the action filed on 14 November 2008 and resolved by the final judgment described above.

Authorisation, approval and/or clearance under applicable antitrust/competition laws was also obtained in Bosnia and Herzegovina, Brazil, China, Germany, Mexico, Montenegro, Serbia, Uruguay and the United Kingdom, and the regulatory review in Argentina is ongoing.

The terms and conditions of any authorisations, approvals and/or clearances still to be obtained, or any other action taken by a governmental authority following the consummation of the Anheuser-Busch acquisition, may require, among other things, the divestiture of our assets or businesses to third-parties, changes to operations in connection with the completion of the Anheuser-Busch acquisition, restrictions on our ability to operate in certain jurisdictions following the acquisition, restrictions on the combination of the InBev and Anheuser-Busch operations in certain jurisdictions or other commitments to regulatory authorities regarding ongoing operations. Any such actions could have a material adverse effect on our business and diminish substantially the synergies and the advantages which we expect to achieve from the Anheuser-Busch acquisition. Any event that delays our integration of the InBev and Anheuser-Busch businesses and operations in any jurisdiction could have a material adverse effect on us and the trading price of our shares.

In addition, divestitures and other commitments, if any, may have an adverse effect on our business, results of operations, financial condition and prospects. These or any conditions, remedies or changes also could have the effect of reducing the anticipated benefits of the transaction or imposing additional costs on us or limiting our revenues following the completion of the Anheuser-Busch acquisition, any of which might have a material adverse effect on us.

The uncertainties about the effects of the Anheuser-Busch acquisition could materially and adversely affect our businesses and operations.

Uncertainty regarding the effect of the Anheuser-Busch acquisition could cause disruptions to our businesses. These uncertainties may materially and adversely affect our businesses and their operations and could cause customers, distributors, other business partners and other parties that have business relationships with us to defer the consummation of other transactions or other decisions concerning our businesses, or to seek to change existing business relationships.

Risks Relating to the New Notes

Since the Issuer and the Parent Guarantor are holding companies that conduct operations through subsidiaries, your right to receive payments on the New Notes and the Guarantees is subordinated to the other liabilities of the Issuer’s subsidiaries and those of the Parent Guarantor who are not Subsidiary Guarantors.

The Parent Guarantor is organised as a holding company for our operations, and the Issuer is the holding company for Anheuser-Busch. As a result, substantially all of the Issuer’s and the Parent Guarantor’s operations are carried on through subsidiaries. The Issuer’s principal source of income is the dividends and distributions the Issuer receives from its subsidiaries. The Parent Guarantor had guaranteed a total of USD 52.598 billion of debt as of 31 August 2009. Following the completion of the acquisition of Anheuser-Busch by InBev, the Parent Guarantor has guaranteed all of the outstanding capital markets debt issued or guaranteed by Anheuser-Busch and any outstanding debt under the senior and bridge facilities established to fund the acquisition and may guarantee certain indebtedness of certain of its subsidiaries.

The Issuer’s and the Parent Guarantor’s ability to meet their financial obligations is dependent upon the availability of cash flows from their domestic and foreign subsidiaries and affiliated companies through dividends, intercompany advances, management fees and other payments. The Issuer’s and the Parent

 

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Guarantor’s subsidiaries and affiliated companies are not required and may not be able to pay dividends to the Issuer or the Parent Guarantor. Only certain of the Parent Guarantor’s subsidiaries are Guarantors of the New Notes. Claims of the creditors of the Issuer’s or the Parent Guarantor’s subsidiaries who are not Subsidiary Guarantors have priority as to the assets of such subsidiaries over the claims of creditors of the Issuer or the Parent Guarantor. Consequently, noteholders are structurally subordinated, on the Issuer’s or the Parent Guarantor’s insolvency, to the prior claims of the creditors of the Issuer’s or the Parent Guarantor’s subsidiaries who are not Subsidiary Guarantors.

The Guarantees to be provided by the Parent Guarantor and the Subsidiary Guarantors are subject to certain limitations that may affect the validity or enforceability of the Guarantees.

Enforcement of each Guarantee will be subject to certain generally available defences. Local laws and defences may vary, and may include those that relate to corporate benefit ( ultra vires ), fraudulent conveyance or transfer ( actio pauliana ), voidable preference, financial assistance, corporate purpose, subordination and capital maintenance or similar laws and concepts. They may also include regulations or defences which affect the rights of creditors generally.

If a court were to find a Guarantee given by a Guarantor, or a portion thereof, void or unenforceable as a result of such local laws or defences, or to the extent that agreed limitations on Guarantees apply (see “Description of the New Notes—Guarantee Limitations”), holders would cease to have any claim in respect of that Guarantor and would be creditors solely of the Issuer and any remaining Guarantors and, if payment had already been made under the relevant Guarantee, the court could require that the recipient return the payment to the relevant Guarantor.

The Guarantees provided by AmBrew, Brandbrew, AB InBev France, Interbrew Central European Holding, Interbrew International and InBev Nederland (each as defined below), respectively, are subject to certain limitations.

For the purposes of the Guarantee provided by AB InBev France, such Guarantee shall not include any obligation or liability which if incurred would constitute the provision of financial assistance within the meaning of article L.225-216 of the French Commercial Code and/or would constitute a misuse of corporate assets within the meaning of article L.241-3 or L.242-6 of the French Commercial Code or any other law or regulations having the same effect, as interpreted by French courts. In addition, the obligations and liabilities of AB InBev France under its Guarantee shall be limited, at any time, to an amount equal to the aggregate principal amount of the New Notes to the extent, however, directly or indirectly on-lent or otherwise provided by the Issuer to AB InBev France or its subsidiaries under intercompany loans or similar arrangements and outstanding at the date a payment is to be made by AB InBev France under its Guarantee.

For the purposes of the Guarantees provided by AmBrew and Brandbrew (the “ Luxembourg Guarantors ”) respectively, the maximum aggregate liability, in the case of AmBrew’s Guarantee, and in the case of Brandbrew, Brandbrew’s Guarantee and as Guarantor of the Brandbrew Guaranteed Facilities (as defined below) (excluding its Guarantee), shall not exceed an amount equal to the aggregate of (without double counting): (A) the aggregate amount of all moneys received by the relevant Luxembourg Guarantor and the relevant Luxembourg Guarantor’s subsidiaries as a borrower or issuer under the relevant Luxembourg Guarantor’s Guaranteed Facilities (as defined below); (B) the aggregate amount of all outstanding intercompany loans made to the relevant Luxembourg Guarantor and the relevant Luxembourg Guarantor’s Subsidiaries by other members of the AB InBev Group which have been directly or indirectly funded using the proceeds of borrowings under the relevant Luxembourg Guarantor’s Guaranteed Facilities; and (C) an amount equal to 100% of the greater of: (I) the sum of the relevant Luxembourg Guarantor’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (other than any subordinated debt already accounted above) (both as referred to in the Law of 2002) as reflected in the relevant Luxembourg Guarantor’s then most recent annual accounts approved by the competent organ of the relevant Luxembourg Guarantor (as audited by its réviseur

 

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d’entreprises (external auditor), if required by law); and (II) the sum of relevant Luxembourg Guarantor’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (both as referred to in article 34 of the Law of 2002) as reflected in its filed annual accounts available as of the date of the relevant Guarantee.

In addition, the obligations and liabilities of a Luxembourg Guarantor under its Guarantee and under any of its Guaranteed Facilities shall not include any obligation which, if incurred, would constitute a breach of the provisions on financial assistance as defined by article 49-6 of the Luxembourg Law on Commercial Companies dated 10 August 1915, as amended, to the extent such or an equivalent provision is applicable to the relevant Luxembourg Guarantor.

The Guarantees granted by Interbrew International, Interbrew Central European Holding and InBev Nederland, respectively, shall not apply to any liability to the extent that it would result in such Guarantee constituting unlawful financial assistance.

The Guarantees provided by the Subsidiary Guarantors (but not the Parent Guarantor) may be released in certain circumstances.

Each of the Guarantors, other than the Parent Guarantor, may terminate its Guarantee in the event that (i) the relevant Guarantor is released from its Guarantee of, or is no longer a Guarantor under, the Issuer’s USD 45 billion senior facilities agreement and (ii) the aggregate amount of indebtedness for borrowed money for which the relevant Guarantor is an obligor (as a guarantor or borrower) does not exceed 10% of the consolidated gross assets of the Parent Guarantor as reflected in the balance sheet included in its most recent publicly released interim or annual consolidated financial statements. In addition, each Subsidiary Guarantor whose Guarantee is subject to the limitations described below under “Description of the New Notes—Guarantee Limitations” may terminate its Guarantee in the event that under the rules, regulations or interpretations of the SEC such Subsidiary Guarantor determines that it would be required to include its financial statements in any registration statement filed with the SEC with respect to any series of notes or guarantees issued under the Indenture or in periodic reports filed with or furnished to the SEC (by reason of such limitations or otherwise). For more information see “Description of the New Notes—Guarantees”.

In relation to any future periodic or other filings of ours with the SEC, the rules and regulations of the SEC require that the Guarantees be “full and unconditional” obligations of each of the Subsidiary Guarantors, otherwise, in connection with such filing, separate financial statements of the Subsidiary Guarantors would be required to be filed as well. As discussed below under “Description of the New Notes—Guarantee Limitations”, such Guarantee may be terminated or amended or modified in order to ensure compliance with the SEC’s rules and regulations and to ensure that separate financial statements of such Subsidiary Guarantor need not be provided. It may not be possible to amend the limitations on the Guarantees in a manner that would meet the SEC’s requirements for “full and unconditional” guarantees and be consistent with local law requirements for guarantees. For more information see “Description of the New Notes—Guarantees”.

If the Guarantees by the Subsidiary Guarantors are released, the Issuer and the Parent Guarantor are not required to replace them, and the New Notes will have the benefit of fewer or no Subsidiary Guarantees for the remaining maturity of the New Notes.

AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., InBev Nederland N.V., AmBrew S.A and BrandBrew S.A., the six Subsidiary Guarantors whose Guarantees are subject to limitations, accounted for approximately two percent (2%) of the total consolidated EBITDA of AB InBev Group for the first six months of 2009 and approximately two percent (2%) of the total consolidated debt of AB InBev Group as of 30 June 2009.

 

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Since the New Notes are unsecured, your right to receive payments may be adversely affected.

The New Notes that the Issuer is offering for exchange will be unsecured. The New Notes are not subordinated to any of the Issuer’s other debt obligations, and therefore, they will rank equally with all its other unsecured and unsubordinated indebtedness. As of 1 December 2009, neither the Parent Guarantor nor the Subsidiary Guarantors had any secured indebtedness outstanding. If the Issuer defaults on the New Notes or the Guarantors default on the Guarantees, or after bankruptcy, examinership, liquidation or reorganisation, then, to the extent that the Issuer or the Guarantors have granted security over their assets, the assets that secure their debts will be used to satisfy the obligations under that secured debt before the Issuer or the Guarantors can make payment on the New Notes or the Guarantees. There may only be limited assets available to make payments on the New Notes or the Guarantees in the event of an acceleration of the New Notes. If there is not enough collateral to satisfy the obligations of the secured debt, then the remaining amounts on the secured debt would share equally with all unsubordinated unsecured indebtedness.

Your rights as a holder may be inferior to the rights of holders of a different series of the Issuer’s notes issued under the Indenture.

The New Notes are governed by the Indenture described under “Description of the Exchange Notes” among the Issuer, the Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A. The Issuer may issue additional series of notes under the Indenture that have different terms from the New Notes. The Issuer may also issue series of notes under the Indenture that provide holders of those notes with rights superior to the rights attaching to the New Notes or that may be granted in the future to note holders of other series. You should read carefully the specific terms of the New Notes.

Should the Guarantors default on their Guarantees, your right to receive payments on the Guarantees may be adversely affected by the insolvency laws of the jurisdiction of organisation of the defaulting Guarantors.

The Parent Guarantor and Subsidiary Guarantors are organized under the laws of various jurisdictions, and it is likely that any insolvency proceedings applicable to a Guarantor would be governed by the law of its jurisdiction of organisation. The insolvency laws of the various jurisdictions of organisation of the Guarantors may vary as to treatment of unsecured creditors and may contain prohibitions on the Guarantor’s ability to pay any debts existing at the time of the insolvency.

Since the Parent Guarantor is a Belgian company, Belgian insolvency laws may adversely affect a recovery by the holders of amounts payable under the New Notes.

There are two types of insolvency procedures under Belgian law: (i) the judicial restructuring ( réorganisation judiciaire/gerechtelijke reorganisatie ) procedure and (ii) the bankruptcy ( faillite/faillissement ) procedure, each of which is described below.

A proceeding for a judicial restructuring may be commenced if the continuation of the debtor’s business is, either immediately or in the future, at risk. The continuation of the debtor’s business is, in any event, deemed to be at risk if, as a result of losses, the debtor’s net assets have declined to less than 50% of its stated capital.

A request for a judicial restructuring is filed on the initiative of the debtor by a petition. The court can consider a preliminary suspension of payments during an initial period of six months, which can be extended by up to a maximum period of six months at the request of the company. In exceptional circumstances and in the interest of the creditors, there may be an additional extension of six months. In principle, during the initial suspension period, the debtor cannot be dissolved or declared bankrupt. However, the initial suspension period can be terminated if it becomes manifestly clear that the debtor will not be able to continue its business. Following early termination of the initial suspension period, the debtor can be dissolved or declared bankrupt. As a rule, creditors cannot enforce their rights against the debtor’s assets during the period of preliminary suspension

 

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of payments, except in the following circumstances: (i) failure by the debtor to pay interest or charges falling due in the course of the preliminary suspension period, (ii) failure by the debtor to pay any new debts ( e.g. , debts which have arisen after the date of the preliminary suspension of payments), or (iii) enforcement by a creditor of security (or certain netting arrangements and relating accelerated termination arrangements) pursuant to the Belgian Act of 15 December 2004 on financial collateral.

During the preliminary suspension period, the debtor must draw up a restructuring plan which must be approved by a majority of its creditors who were present at a meeting of creditors and whose aggregate claims represent over half of all outstanding claims of the debtor. The restructuring plan must have a maximum duration of five years. This plan will be approved by the court provided the plan does not violate the formalities required by the judicial restructuring legislation nor public policy. The plan will be binding on all creditors listed in the plan. Enforcement rights of creditors secured by certain types of in rem rights are not bound by the plan. Such creditors may, as a result, enforce their security from the beginning of the final suspension period. Under certain conditions, and subject to certain exceptions, enforcement by such creditors can be suspended for up to 24 months (as from the filing of the request for a judicial restructuring with the relevant court). Under further conditions, this period of 24 months may be extended by a further 12 months.

Any provision providing that an agreement would be terminated as the result of a debtor entering a judicial composition is ineffective, subject to exceptions set forth in the Belgian Act of 15 December 2004 on financial collateral.

The above essentially describes the so-called judicial restructuring by collective agreement of the creditors. The judicial restructuring legislation also provides for alternative judicial restructuring procedures, including (i) by amicable settlement between the debtor and two or more of its creditors and (ii) by court-ordered transfer of part or all of the debtor’s business.

A company which, on a sustained basis, has ceased to make payments and whose credit is impaired will be deemed to be in a state of bankruptcy. Within one month after the cessation of payments, the company must file for bankruptcy. If the company is late in filing for bankruptcy, its directors could be held liable for damages to creditors as a result thereof. Bankruptcy procedures may also be initiated on the request of unpaid creditors or on the initiative of the public prosecutor.

Once the court decides that the requirements for bankruptcy are met, the court will establish a date before which claims for all unpaid debts must be filed by creditors. A bankruptcy trustee will be appointed to assume the operation of the business and to organize a sale of the debtor’s assets, the distribution of the proceeds thereof to creditors and the liquidation of the debtor.

Payments or other transactions (as listed below) made by a company during a certain period of time prior to that company being declared bankrupt (the “ suspect period ”) ( période suspecte/verdachte periode ) can be voided for the benefit of the creditors. The court will determine the date of commencement and the duration of the suspect period. This period starts on the date of sustained cessation of payment of debts by the debtor. The court can only determine the date of sustained cessation of payment of debts if it has been requested to do so by a creditor proceeding for a bankruptcy judgment or if proceedings are initiated to that effect by the bankruptcy trustee or by any other interested party. This date cannot be earlier than six months before the date of the bankruptcy judgment, unless a decision to dissolve the company was made more than six months before the date of the bankruptcy judgment, in which case the date could be the date of such decision to dissolve the company. The ruling determining the date of commencement of the suspect period or the bankruptcy judgment itself can be opposed by third parties, such as other creditors, within 15 days following the publication of that ruling in the Belgian Official Gazette.

The transactions which can or must be voided under the bankruptcy rules for the benefit of the bankrupt estate include (i) any transaction entered into by a Belgian company during the suspect period if the value given to creditors significantly exceeded the value the company received in consideration, (ii) any transaction entered

 

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into by a company which has stopped making payments if the counter party to the transaction was aware of the suspension of payments, (iii) security interests granted during the suspect period if they intend to secure a debt which existed prior to the date on which the security interest was granted, (iv) any payments (in whatever form, i.e.  money or in kind or by way of set-off) made during the suspect period of any debt which was not yet due, as well as all payments made during the suspect period other than with money or monetary instruments ( i.e . checks, promissory notes, etc.), and (v) any transaction or payment effected with fraudulent intent irrespective of its date.

Following a judgment commencing a bankruptcy proceeding, enforcement rights of individual creditors are suspended (subject to exceptions set forth in the Belgian Act of 15 December 2004 on financial collateral). Creditors secured by in rem rights, such as share pledges, will regain their ability to enforce their rights under the security after the bankruptcy trustee has verified the creditors’ claims.

The New Notes lack a developed trading market, and such a market may never develop. The trading price for the New Notes may be adversely affected by credit market conditions.

The Issuer does not intend to list the New Notes on any securities exchange. There can be no assurance that an active trading market will develop for the New Notes, nor any assurance regarding the ability of holders to sell their New Notes or the price at which such holders may be able to sell their New Notes. If a trading market were to develop, the New Notes could trade at prices that may be higher or lower than the initial offering price depending on many factors, including, among other things, prevailing interest rates, the Issuer’s or the Parent Guarantor’s financial results, any decline in the Issuer’s or the Parent Guarantor’s credit-worthiness and the market for similar securities. The trading market for the New Notes will be affected by general credit market conditions, which in recent periods have been marked by significant volatility and price reductions, including for debt issued by investment-grade companies.

The change in control clause may not be effective.

The change in control clause, as detailed under “Description of the New Notes—Holder’s Option to Require Repayment upon a Change of Control” is subject to the approval of our shareholders. The approval of the change in control clause is expected to be raised at the next general meeting of our shareholders. In the event that the shareholders do not approve the change in control clause it will not be effective.

The Issuer may not be able to repurchase all of the notes upon a change of control, which would result in a default under the notes.

Upon the occurrence of specific kinds of change of control events, each holder will have the right to require the Issuer to repurchase all or any part of such holder’s notes at a price equal to 101% of its principal amount, plus accrued and unpaid interest, if any, to the date of repurchase. If such change of control event occurs, there can be no assurance that the Issuer would have sufficient financial resources available to satisfy its obligations to repurchase the notes. In addition, the Issuer’s ability to repurchase the notes for cash may be limited by law or by the terms of other agreements relating to its indebtedness outstanding at that time. The Issuer’s failure to repurchase the notes within the applicable time period would result in a default under the Indenture, which could have material adverse consequences for the Issuer and for holders.

 

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USE OF PROCEEDS

We will not receive any cash proceeds from the issuance of the New Notes pursuant to the Exchange Offers. In consideration for issuing the New Notes as contemplated in this Form F-4, we will receive in exchange a like principal amount of Old Notes, the terms of which are identical in all material respects to the New Notes. The Old Notes surrendered in exchange for the New Notes will be cancelled.

We used all of the net proceeds from the sale of the Old Notes to repay outstanding amounts under our senior facilities agreement, with USD 4.107 billion applied to the Facility C loan and USD 1.348 billion applied to the Facility A loan. As a result, all amounts due under the Facility A loan have now been repaid. The Facility C loan, the Facility A loan and the senior facilities agreement are described in “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition—Senior Facilities Agreement”. No portion of the proceeds from the sale of the Old Notes was on-lent to any member of the AB InBev Group.

EXCHANGE RATE INFORMATION

The following tables set forth, for the periods and dates indicated, certain information regarding the exchange rate between the euro and the U.S. dollar, based on the closing spot rates as published by Bloomberg at 5:00 p.m. (New York time) on each business day during the period. These rates may differ from the actual rates used in the preparation of the financial statements and other financial information appearing in this Form F-4. Inclusion of these exchange rates is not meant to suggest that the U.S. dollar amounts actually represent such euro amounts or that such amounts could have been converted into euro at any particular rate, if any. The following tables have been set out solely for the purpose of convenience.

 

Years ended 31 December

   High    Low    Average (1)    Period
End
     (U.S. dollars per euro)

2008

   1.5991    1.2453    1.4710    1.3971

2007

   1.4872    1.2893    1.3796    1.4589

2006

   1.3343    1.1820    1.2657    1.3197

2005

   1.3465    1.1670    1.2387    1.1849

2004

   1.3637    1.1822    1.2494    1.3554

 

(1)

The average of the exchange rates on the last business day of each month during the relevant period.

 

Months

       High            Low    
     (U.S. dollars per euro)

December 2009 (through 2 December)

   1.5081    1.5044

November 2009

   1.5134    1.4724

October 2009

   1.5033    1.4545

September 2009

   1.4790    1.4224

August 2009

   1.4412    1.4082

July 2009

   1.4257    1.3884

June 2009

   1.4303    1.3803

 

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CAPITALISATION

The following table shows our cash and cash equivalents and capitalisation as of 30 September 2009 on an actual basis and on an as adjusted basis to give effect to (i) the offering of the Old Notes and (ii) the application of the net proceeds of the offering of the Old Notes. You should read the information in this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and the accompanying notes included in this Form F-4.

 

     As of 30 September 2009 (unaudited)
         Actual            As Adjusted for Sale    
of Old Notes
     (USD million)

Cash and cash equivalents, less bank overdrafts

   4,482    4,482
         

Current interest-bearing liabilities

     

Secured bank loans

   85    85

Unsecured bank loans

   1,557    1,557

Unsecured bond issues

   515    515

Unsecured other loans

   6    6

Finance lease liabilities

   5    5

Non-current interest-bearing liabilities

     

Secured bank loans

   68    68

Unsecured bank loans(1)

   30,389    24,934

Unsecured bond issues(1)

   22,896    28,396

Secured other loans

   6    6

Unsecured other loans

   211    211

Finance lease liabilities

   46    46
         

Total interest-bearing liabilities

   55,784    55,829
         

Equity attributable to equity holders of InBev

   27,675    27,675

Minority interests

   2,644    2,644
         

Total capitalisation:

   86,103    86,148
         

 

(1)

As a result of the sale of the Old Notes, non-current unsecured bond issues increased by USD 5.455 billion. We used all of the net proceeds from the sale of the Old Notes to repay outstanding amounts under our senior facilities agreement, with USD 4.107 billion applied to the Facility C loan and USD 1.348 billion applied to the Facility A loan. In addition to the repayments made from the net proceeds of the sale of the Old Notes, between 30 September 2009 and 5 November 2009, we repaid an additional USD 833 billion under the Facility A loan. The Facility A loan, the Facility C loan and the senior facilities agreement generally are described in “Business Description—Material Contracts—Financing the Anheuser-Bush Acquisition—Senior Facilities Agreement”.

 

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SELECTED FINANCIAL INFORMATION

The selected historical financial information presented below as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, has been derived from our audited consolidated financial statements, which were prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and in conformity with International Financial Reporting Standards as adopted by the European Union, which we refer to as “ IFRS ”. The selected historical financial information presented below as of and for the six-month periods ended 30 June 2009 and 2008 has been derived from our unaudited IFRS condensed consolidated interim financial statements. The interim data include all adjustments, consisting of normally recurring adjustments, necessary for a fair statement of the results for the interim period.

The selected historical financial information presented in the tables below should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements and the accompanying notes and our unaudited condensed consolidated interim financial statements and the accompanying notes that, in each case, have been included in this Form F-4.

Effective 1 January 2009, we changed the presentation currency of our consolidated financial statements from the euro to the U.S. dollar, reflecting the post-Anheuser-Busch acquisition profile of our revenue and cash flows, which are now primarily generated in U.S. dollars and U.S. dollar-linked currencies. We believe that this change provides greater alignment of our presentation currency with our most significant operating currency and underlying financial performance. For comparability purposes in this Form F-4, we have also restated our historical audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, and the selected financial information as of and for the years ended 31 December 2005 and 2004 set out below, from the euro to the U.S. dollar. Unless otherwise specified, all financial information included in this Form F-4 has been stated in U.S. dollars.

For a summary of recent developments affecting us, see “—Recent Developments”.

 

     Six months ended
30 June
   Year ended 31 December (restated)  
     2009    2008    2008    2007    2006    2005     2004  
     (USD million, unless otherwise indicated)  
Income Statement Data    (unaudited)    (audited)    (unaudited)  

Revenue ( 1 )

   17,698    10,563    23,507    19,735    16,692    14,577      10,598   

Profit from operations

   4,928    2,508    5,340    5,872    3,925    2,749      1,625   

Profit

   2,343    1,766    3,126    4,167    2,667    1,753      1,111   

Profit attributable to our equity holders

   1,787    1,207    1,927    3,005    1,770    1,131      889   

EBITDA, ( 2 ) as defined

   6,289    3,350    7,252    7,280    5,296    ( 3 )     (3 )  

Ratio of earnings to fixed charges ( 4 )

   2.29    *    2.90    5.88    4.87    3.38      3.75   

Weighted average number of ordinary shares (million shares) ( 5 ) (8)

   1,582    960    999    976    972    960      768   

Diluted weighted average number of ordinary shares (million shares) ( 6 ) (9)

   1,590    963    1,000    981    980    964      773   

Basic earnings per share (USD) ( 7 ) (9)

   1.13    1.26    1.93    3.08    1.82    1.18      1.16   

Diluted earnings per share (USD) ( 8 ) (9)

   1.12    1.25    1.93    3.06    1.81    1.17      1.15   

Dividends per share (USD)

   n/a    n/a    0.35    3.67    0.95    0.57      0.52   

Dividends per share (EUR)

   n/a    n/a    0.28    2.44    0.72    0.48      0.39   

 

*

Not applicable.

 

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     Six months ended
30 June
    Year ended 31 December
(restated)
 
     2009     2008     2008     2007     2006  
     (USD million, unless otherwise indicated)  
Cash Flow Data    (unaudited)     (audited)  

Cash flow from operating activities

   5,067      1,829      6,158      5,557      4,122   

Cash flow from investing activities

   157      (2,019   (55,503   (3,225   (4,365

Cash flow from financing activities

   (1,452   (330   49,879      (1,327   261   

 

     As of 30 June    As of 31 December (restated)
     2009    2008    2007    2006    2005    2004
     (USD million, unless otherwise indicated)
Balance Sheet Data    (unaudited)    (audited)    (unaudited)

Total assets

   117,699    113,160    42,247    34,566    27,795    25,395

Equity

   27,999    24,431    21,949    17,308    13,979    11,841

Equity attributable to our equity holders

   25,586    22,442    20,057    16,149    13,532    11,331

Issued capital

   1,731    1,730    559    558    554    605

Other Data

                 

Volumes (million hectoliters)

   200    285    271    247    224    154

Book value per share

   16.17    22.46    20.55    16.61    14.09    14.75

 

(1)

Turnover less excise taxes and discounts. In many jurisdictions, excise taxes make up a large proportion of the cost of beer charged to our customers (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Results of Operations—Excise Taxes”).

 

(2)

The following table shows the calculation of our EBITDA, as defined, for the periods shown. A performance measure such as EBITDA, as defined, is a non-IFRS measure. The most directly comparable financial measure to EBITDA, as defined, presented in accordance with IFRS in our consolidated financial statements is profit. EBITDA, as defined, is a measure used by our management to evaluate our business performance and is defined as profit from operations before depreciation, amortisation and impairment. EBITDA, as defined, does, however, have limitations as an analytical tool. It is not a recognised term under IFRS and does not purport to be an alternative to profit as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. As a result, you should not consider EBITDA, as defined, in isolation from, or as a substitute analysis for, our results of operations.

 

    

For a discussion of how we use EBITDA, as defined, and its limitations, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”.

 

         Six months ended 30 June         Year ended 31 December  
     2009     2008     2008     2007     2006  
     (USD million)  
     (unaudited)     (audited)  

Profit

   2,343      1,766      3,126      4,167      2,667   

Income tax expense

   820      232      674      888      666   

Net finance cost

   1,993      513      1,600      818      593   

Share of result of associates

   (228   (3   (60   (1   (1
                              

Profit from operations

   4,928      2,508      5,340      5,872      3,925   

Depreciation, amortisation and impairment

   1,361      842      1,912      1,408      1,371   
                              

EBITDA, as defined

   6,289      3,350      7,252      7,280      5,296   
                              

 

(3)

EBITDA, as defined, is not available for the years ended 31 December 2005 and 2004.

 

(4)

The ratio of earnings to fixed charges represents the number of times fixed charges are covered by earnings. For the purposes of computing this ratio, earnings consist of profit from operations before taxes and share of results of associates, plus fixed charges, minus interest capitalized during the period. Fixed charges consist of interest and accretion

 

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expense, interest on finance lease obligations, interest capitalized, plus one-third of rent expense on operating leases, estimated by the company as representative of the interest factor attributable to such rent expense. We did not have any preferred stock outstanding and did not pay or accrue any preferred stock dividends during the periods presented above. Set forth below is an overview of how we calculate the ratio of earnings to fixed charges for the six months ended 30 June 2009 and each of the five years ended 31 December 2008, 2007, 2006, 2005 and 2004:

 

     Six months
ended
30 June 2009
   Year ended 31 December
        2008    2007    2006    2005    2004
     (USD million)
     (unaudited)    (audited)    (unaudited)

Earnings:

                 

Profit from operations before taxes and share of results of associates

   2,935    3,740    5,054    3,332    2,244    1,412

Add: Fixed charges (below)

   2,281    1,965    1,035    860    941    514

Less: Interest Capitalized (below)

   1    -    -    -    -    -
                             

Total earnings

   5,215    5,705    6,089    4,192    3,185    1,926
                             

Fixed charges:

                 

Interest expense and similar charges

   2,030    1,761    926    771    849    454

Accretion expense

   208    127    49    30    23    7

Interest capitalized

   1    -    -    -    -    -

Estimated interest portion of rental expense

   42    77    60    59    69    53
                             

Total fixed charges

   2,281    1,965    1,035    860    941    514
                             

Ratio of earnings to fixed charges

   2.29    2.90    5.88    4.87    3.38    3.75

 

(5)

Weighted average number of ordinary shares means, for any period, the number of shares outstanding at the beginning of the period, adjusted by the number of shares cancelled, repurchased or issued during the period multiplied by a time-weighting factor.

 

(6)

Diluted weighted average number of ordinary shares means the weighted average number of ordinary shares, adjusted by the effect of share options issued.

 

(7)

Earnings per share means, for any period, profit attributable to our equity holders for the period divided by the weighted average number of ordinary shares.

 

(8)

Diluted earnings per share means, for any period, profit attributable to our equity holders for the period divided by the diluted weighted average number of ordinary shares.

 

(9)

In accordance with IAS33, we have adjusted historical data per share for each of the years ended 31 December 2007, 2006, 2005 and 2004 by an adjustment ratio of 0.6252 as a result of the capital increase pursuant to the rights offering we completed in December 2008 to restate (i) the weighted average number of ordinary shares; (ii) the diluted weighted average number of ordinary shares; (iii) the basic earnings per share; and (iv) the diluted earnings per share.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a review of our financial condition and results of operations as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, and the six-month periods ended 30 June 2009 and 2008, and of the key factors that have affected or are expected to be likely to affect our ongoing and future operations. You should read the following discussion and analysis in conjunction with our audited and unaudited condensed consolidated financial statements and the accompanying notes included elsewhere in this Form F-4.

Some of the information contained in this discussion, including information with respect to our plans and strategies for our business and our expected sources of financing, contain forward-looking statements that involve risk and uncertainties. You should read “Forward-Looking Statements” for a discussion of the risks related to those statements. You should also read “Risk Factors” for a discussion of certain factors that may affect our business, financial condition and results of operations, including with respect to Anheuser-Busch.

We have prepared our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 and our unaudited condensed consolidated interim financial statements as of and for the six-month periods ended 30 June 2009 and 2008 in accordance with IFRS. The financial information and related discussion and analysis contained in this item are presented in U.S. dollars except as otherwise specified. Unless otherwise specified the financial information analysis in this Form F-4 is based on our actual audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

See “Presentation of Financial and Other Data” for further information on our presentation of financial information.

KEY FACTORS AFFECTING RESULTS OF OPERATIONS

We consider acquisitions, divestitures and other structural changes, economic conditions and pricing, consumer preferences, our product mix, raw material and transport prices, the effect of our distribution arrangements, excise taxes, the effect of governmental regulations, foreign currency effects and weather and seasonality to be the key factors influencing the results of our operations. The following section discusses these key factors.

Acquisitions, Divestitures and Other Structural Changes

We regularly engage in acquisitions, divestitures and investments. We also engage in start up or termination of activities and may transfer activities between business zones. Such events have had and are expected to continue to have a significant effect on our results of operations and the comparability of period-to-period results. Significant acquisitions, divestitures, investments and transfers of activities between business zones in the first six months of 2009 and in the years ended 31 December 2008, 2007 and 2006 are described below.

Events subsequent to 1 January 2009 that have had or are expected to have scope effects on our results include:

 

   

On 13 March 2009, we announced that we had completed the sale of InBev USA, the exclusive importer of Labatt branded beer in the U.S., to an affiliate of KPS Capital Partners, LP to satisfy requirements imposed by the U.S. Department of Justice in connection with its clearance of our acquisition of Anheuser-Busch.

 

   

On 30 April 2009, we announced that we had completed the sale of 19.9% of Tsingtao to Asahi Breweries, Ltd. On 8 May 2009, we announced that we had entered into an agreement with a

 

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private investor, Mr. Chen Fashu, to sell our remaining 7% stake in Tsingtao for USD 235 million. The sale was completed on 5 June 2009.

 

   

On 24 July 2009, we completed the previously announced sale of Oriental Brewery to an affiliate of Kohlberg Kravis Roberts & Co. L.P. (“ KKR ”) for USD 1.8 billion, which resulted in USD 1.5 billion of cash proceeds at closing.

 

   

On 1 October 2009, we completed the previously announced sale of four metal beverage can and lid manufacturing plants from our U.S. metal packaging subsidiary, Metal Container Corporation, to Ball Corporation for approximately USD 577 million. In connection with this transaction, Ball Corporation has entered into a long-term supply agreement to continue to supply us with metal beverage cans and lids from the divested plants, and has committed, as part of the acquisition agreement, to offer employment to each active employee of the plants.

 

   

During the first half of 2009 we concluded the sale of our integrated distribution network, CafeIn, in France.

 

   

For details of more recent developments, see “—Recent Developments—Recent Transactions”.

Events in the year ended 31 December 2008 that had scope effects on our results included:

 

   

The acquisition of Anheuser-Busch in November 2008, which was a transformational transaction that significantly affects our operational scale, financial condition and results of operations. Based on 2008 pro-forma information for the combined company, if this acquisition had occurred on 1 January 2008, we estimate that our consolidated volumes, revenue and profit from operations would have been higher by 131.4 million hectoliters, USD 15.7 billion and USD 3.3 billion, respectively, for the year ended 31 December 2008. On the same basis, the share of our consolidated revenue accounted for by the North America business zone would have increased by 23.5% to 39.5%, significantly increasing operations in our North America business zone;

 

   

The sale of the Cintra brands, acquired through the 2007 business combination with Cervejarias Cintra Ind. e Com. Ltda., in May 2008; and

 

   

The sale of four wholesalers in Western Europe.

Events in the year ended 31 December 2007 that had scope effects on our results included:

 

   

The sale of the United Dutch Breweries BV business in the Netherlands;

 

   

The acquisition of Lakeport Brewing Income Fund (“ Lakeport ”) in Canada and Cervejarias Cintra Ind. e Com. Ltda. in Brazil;

 

   

The import license entered into with Anheuser-Busch, Inc., pursuant to which Anheuser-Busch, Inc. imports our European brands into the U.S. market, effective as of 1 February 2007; as a result of the entering into this agreement, our European brands business in the United States shifted from the North America business zone to the Global Holding & Export business zone until the closing of the Anheuser-Busch acquisition, when this business was shifted back to the North America business zone; and

 

   

The sale of certain Dutch and Belgian real estate to Cofinimmo S.A.

Events in the year ended 31 December 2006 that had scope effects on our results included:

 

   

The acquisition of Fujian Sedrin Brewery Co., Ltd. in China;

 

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The full consolidation of Quinsa into our operating results due to the acquisition of substantially all remaining minority interests in August 2006; and

 

   

The sale of Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH in Germany and the Rolling Rock family of brands in the United States, as well as certain plants in our Western Europe zone.

In addition to the divestitures described above, we may dispose of further assets or businesses and expect to utilise the proceeds from any such disposals to repay indebtedness incurred to finance the Anheuser-Busch acquisition. Accordingly, the financial information presented in this Form F-4 may not reflect the scope of our business as it will be conducted in the future.

Economic Conditions and Pricing

General economic conditions in the geographic regions in which we sell our products, such as the level of disposable income, the level of inflation, the rate of economic growth, the rate of unemployment, exchange rates and currency devaluation or revaluation, influence consumer confidence and consumer purchasing power. These factors, in turn, influence the demand for our products in terms of total volumes sold and the price that can be charged. This is particularly true for emerging countries in our Latin America North, Latin America South, Central & Eastern Europe and Asia Pacific business zones, which tend to have lower disposable income per capita and may be subject to greater economic volatility than our principal markets in North America and Western Europe. The level of inflation has been particularly significant in our Latin America North, Latin America South and Central & Eastern Europe business zones. For instance, Brazil has periodically experienced extremely high rates of inflation. The annual rates of inflation, as measured by the National Consumer Price Index ( Indice Nacional de Preços ao Consumidor ), have in the past reached a hyper-inflationary peak of 2,489.1% in 1993. Brazilian inflation, as measured by the same index, was 6.5% in 2008. Similarly, Russia and Argentina have experienced periods of hyper-inflation. Due to the decontrol of prices in 1992, retail prices in Russia increased by 2,520% in that year, as measured by the Russian Federal State Statistics Institute. Argentine inflation in 1983 was 4,923.6% according to the Instituto Nacional de Estadística y Censos . As measured by these institutes, in 2008, Russian inflation was 11.3% and Argentine inflation was 7.2%. Consequently, a central element of our strategy for achieving sustained profitable volume growth is our ability to anticipate changes in local economic conditions and their impact on consumer demand in order to achieve the optimal combination of pricing and sales volume.

In addition to affecting demand for our products, the general economic conditions described above may cause consumer preferences to shift between on-trade consumption channels, such as restaurants and cafés, bars, sports and leisure venues and hotels, and off-trade consumption channels, such as traditional grocery stores, supermarkets, hypermarkets and discount stores. Products sold in off-trade consumption channels typically generate higher volumes and lower margins per retail outlet than those sold in on-trade consumption channels, although on-trade consumption channels typically require higher levels of investment. The relative profitability of on-trade and off-trade consumption channels varies depending on various factors, including costs of invested capital and the distribution arrangements in the different countries in which we operate. A shift in consumer preferences towards lower margin products may adversely affect our price realisation and profit margins.

Consumer Preferences

We are a consumer products company, and our results of operations largely depend on our ability to respond effectively to shifting consumer preferences. Consumer preferences may shift due to a variety of factors, including changes in demographics, changes in social trends, such as consumer health concerns about obesity, product attributes and ingredients, changes in travel, vacation or leisure activity patterns, weather or negative publicity resulting from regulatory action or litigation.

 

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Product Mix

The results of our operations are substantially affected by our ability to build on our strong family of brands by re-launching or reinvigorating existing brands in current markets, launching existing brands in new markets and introducing brand extensions and packaging alternatives for our existing brands, as well as our ability to both acquire and develop innovative local products to respond to changing consumer preferences. Strong, well-recognised brands that attract and retain consumers, for which consumers are willing to pay a premium, are critical to our efforts to maintain and increase market share and benefit from high margins. See “Business Description—Principal Activities and Products—Beer” for further information regarding our brands.

Raw Material and Transport Prices

We have significant exposure to fluctuations in the prices of raw materials, packaging materials, energy and transport services, each of which may significantly impact our cost of sales or distribution expenses. Increased costs or distribution expenses will reduce our profit margins if we are unable to recover these additional costs from our customers through higher prices (see “—Economic Conditions and Pricing”).

The main raw materials used in our beer production are malted barley, corn grits, corn syrup, rice, hops and water, while those used in our non-beer production are flavoured concentrate, fruit concentrate, sugar, sweeteners and water. In addition to these inputs into our products, delivery of our products to consumers requires extensive use of packaging materials, such as glass or PET bottles, aluminium or steel cans, labels and bottle caps.

The price and supply of the raw and packaging materials that we use in our operations are determined by, among other factors, the level of crop production (both in the countries in which we are active and elsewhere in the world), weather conditions, export demand and governmental regulations and legislation affecting agriculture and trade. Several of the commodities used in our operations experienced significant price increases during the course of 2008 due to constraints in global supply amidst growing demand in emerging markets such as Brazil, Russia, India and China. Increased energy prices over the same period led to increases in the price of energy-intensive commodities, such as aluminium, PET and glass, while increased food and bio-fuel demand led to higher prices for agricultural commodities. We are also exposed to increases in fuel and other energy prices through our direct and indirect distribution networks and production operations. Increases in the prices of our products affect demand for our products and affect our sales volumes and revenue.

While prices for our raw materials, packaging materials and energy requirements have now declined significantly from their 2008 peaks, we expect that raw material and energy prices will continue to experience price fluctuations. As further discussed under “—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments”, we use both fixed price purchasing contracts and commodity derivatives to minimise exposure to commodity price volatility when practicable. Fixed price contracts to purchase raw materials comprise the majority of our purchase commitments. These contracts generally have a term of one to two years although a small number of contracts have a term of over five years. The majority of these contracts obligate us to make a minimum volume of purchases or to purchase fixed quantities. See “Business Description—Brewing Process; Raw Materials and Packaging; Production Facilities; Logistics—Logistics” for further details regarding our arrangements for sourcing of raw and packaging materials.

Distribution Arrangements

We depend on effective distribution networks to deliver our products to our customers. Generally, we distribute our products through (i) direct distribution networks, in which we deliver to points of sale directly, and (ii) indirect distribution networks, in which delivery to points of sale occurs through wholesalers and independent distributors. Indirect distribution networks may be exclusive or non-exclusive and may, in certain business zones, involve use of third-party distribution while we retain the sales function through an agency framework. We use

 

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different distribution networks in the markets in which we operate, as appropriate, based on the structure of the local retail sectors, local geographic considerations, scale considerations, regulatory requirements, market share and the expected added-value and capital returns.

Although specific results may vary depending on the relevant distribution arrangement and market, in general, the use of direct distribution networks or indirect distribution networks will have the following effects on our results of operation:

 

   

Revenue. Revenue per hectoliter derived from sales through direct distribution tends to be higher than revenue derived from sales through third parties. In general, under direct distribution, we receive a higher price for our products since we are selling directly to points of sale, capturing the margin that would otherwise be retained by intermediaries;

 

   

Transportation costs. In our direct distribution networks, we sell our products to the point of sale directly and incur additional freight costs in transporting those products between our plant and such points of sale. Such costs are included in our distribution expenses under IFRS. In most of our direct distribution networks, we use third-party transporters and incur costs through payments to these transporters, which are included in our distribution expenses under IFRS. In indirect distribution networks, our distribution expenses are generally limited to expenses incurred in delivering our products to relevant wholesalers or independent distributors in those circumstances in which we make deliveries; and

 

   

Sales expenses. Under fully indirect distribution systems, the salesperson is generally an employee of the distributor, while under our direct distribution networks and indirect agency networks, the salesperson is generally our employee. To the extent that we deliver our products to points of sale through direct or indirect agency distribution networks, we will incur additional sales expenses from the hiring of additional employees (which may offset to a certain extent increased revenue gained as a result of direct distribution).

In addition, in certain countries, we enter into exclusive importer arrangements and depend on our counterparties to these arrangements to market and distribute our products to points of sale. To the extent that we rely on counterparties to distribution agreements to distribute our products in particular countries or regions, the results of our operations in those countries and regions will, in turn, be substantially dependent on our counterparties’ own distribution networks operating effectively.

Excise Taxes

Taxation on our beer and non-beer products in the countries in which we operate are comprised of different taxes specific to each jurisdiction, such as excise and other indirect taxes. In many jurisdictions, these excise and other indirect taxes make up a large proportion of the cost of beer charged to customers. Increases in excise and other indirect taxes applicable to our products will tend to adversely affect our revenue or margins, both by reducing overall consumption and by encouraging consumers to switch to lower-taxed categories of beverages. For example, see the discussion of U.S., Brazilian, Russian and Ukranian taxes in “Risk Factors—Risks Relating to Our Business—The beer and beverage industry may be subject to changes in taxation.”

Governmental Regulations

Governmental restrictions on beer consumption in the markets in which we operate vary from one country to another, and in some instances, within countries. The most relevant restrictions are:

 

   

Legal drinking ages;

 

   

Global and national alcohol policy reviews and the implementation of policies aimed at preventing the harmful effects of alcohol misuse;

 

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Restrictions on sales of alcohol generally or beer specifically, including restrictions on distribution networks, restrictions to certain retail venues, requirements that retail stores hold special licences for the sale of alcohol and restrictions on times or days of sale;

 

   

Advertising restrictions, which affect, among other things, the media channels employed, the content of advertising campaigns for our products and the time and places where our products can be advertised;

 

   

Restrictions imposed by antitrust or competition laws;

 

   

Deposit laws (including for bottles, crates and kegs); and

 

   

Heightened environmental regulations and standards, including regulations addressing emissions of gas and liquid effluents and the disposal of one-way packaging, compliance with which imposes costs.

Please refer to “Business Description—Regulations Affecting Our Business” for a fuller description of the key laws and regulations to which our operations are subject.

Foreign Currency

Our financial statements presentation and reporting currency is the U.S. dollar. A number of our operating companies have functional currencies (that is, in most cases, the local currency of the respective operating company) other than our reporting currency. Consequently, foreign currency exchange rates have a significant impact on our consolidated financial statements. In particular:

 

   

Decreases in the value of our operating companies’ functional currencies against other currencies in which their costs and expenses are priced may increase those operating companies’ cost of sales and operating expenses, and thus negatively impact their operating margins in functional currency terms. For instance, in 2008 as a result of market volatility, the Brazilian real depreciated 24.2% against the U.S. dollar. This resulted in an increase in AmBev’s expenses and operating costs due to a significant portion of its debt and cost of goods sold being denominated in or linked to the U.S. dollar. Foreign currency transactions are accounted for at exchange rates prevailing at the date of the transactions, while monetary assets and liabilities denominated in foreign currencies are translated at the balance sheet date. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities in currencies other than an operating company’s functional currency are recognised in the income statement. Historically, we have been able to raise prices and implement cost saving initiatives to partly offset cost and expense increases due to exchange rate volatility. We also have hedge policies designed to manage commodity price and foreign currency risks to protect our exposure to currencies other than our operating companies’ respective functional currencies. Please refer to “—Quantitative and Qualitative Disclosures about Market Risk—Market Risk, Hedging and Financial Instruments” for further detail on our approach to hedging commodity price and foreign currency risk.

 

   

Any change in the exchange rates between our operating companies’ functional currencies and our reporting currency affects our consolidated income statement and balance sheet when the results of those operating companies are translated into the reporting currency for reporting purposes. Assets and liabilities of foreign operations are translated to the reporting currency at foreign exchange rates prevailing at the balance sheet date. Income statements of foreign operations are translated to the reporting currency at exchange rates for the year approximating the foreign exchange rates prevailing at the dates of transactions. The components of shareholders’ equity are translated at

 

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historical rates. Exchange differences arising from the translation of shareholders’ equity to the reporting currency at year-end are taken to equity (that is, in a translation reserve). Decreases in the value of our operating companies’ functional currencies against the reporting currency tend to reduce their contribution to, among other things, our consolidated revenue and profit.

For further details of the currencies in which our revenue is realised and the effect of foreign currency fluctuations on our results of operations see “—Impact of Changes in Foreign Exchange Rates” below.

Weather and Seasonality

Weather conditions directly affect consumption of our products. High temperatures and prolonged periods of warm weather favour increased consumption of our products, while unseasonably cool or wet weather, especially during the spring and summer months, adversely affect our sales volumes and, consequently, our revenue. Accordingly, product sales in all of our business zones are generally higher during the warmer months of the year (which also tend to be periods of increased tourist activity) as well as during major holiday periods.

Consequently, for most countries in the Latin America North and Latin America South business zones (particularly Argentina and most of Brazil), volumes are usually stronger in the fourth quarter due to year-end festivities and the summer season in the Southern Hemisphere, while for countries in North America, Western Europe, Central & Eastern Europe and Asia Pacific business zones, volumes tend to be stronger during the spring and summer seasons in the second and third quarters of each year.

Based on 2008 pro-forma information, for example, we would have realised 18.0% of our volume in Central & Eastern Europe in the first quarter, 30.6% in the second quarter, 31.0% in the third quarter and 20.4% in the fourth quarter, while in Latin America South, we would have realised 27.2% of our sales volume in the first quarter, 19.6% in the second quarter, 21.8% in the third quarter and 31.4% in the fourth quarter.

Although such sales volume figures are the result of a range of factors in addition to weather and seasonality, they are nevertheless broadly illustrative of the historic trend described above. Since Anheuser-Busch has substantial operations in the United States, the effects of weather conditions and seasonality in the Northern Hemisphere on our results of operations have increased following the Anheuser-Busch acquisition in November 2008. The peak selling periods in the United States are the second and third quarters.

SIGNIFICANT ACCOUNTING POLICIES

The U.S. Securities and Exchange Commission (the “ SEC ”) has defined a critical accounting policy as a policy for which there is a choice among alternatives available, and for which choosing a legitimate alternative would yield materially different results. We believe that the following are our critical accounting policies. We consider an accounting policy to be critical if it is important to our financial condition and results of operations and requires significant or complex judgments and estimates on the part of our management. For a summary of all of our significant accounting policies, see note 3 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 included in this Form F-4.

Although each of our significant accounting policies reflects judgments, assessments or estimates, we believe that the following accounting policies reflect the most critical judgments, estimates and assumptions that are important to our business operations and the understanding of its results: accounting for business combinations and impairment of goodwill and intangible assets; pension and other post-retirement benefits; share-based compensation; contingencies; deferred and current income taxes; and accounting for derivatives. Although we believe that our judgments, assumptions and estimates are appropriate, actual results may differ from these estimates under different assumptions or conditions.

 

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Revenue Recognition

Our products are sold for cash or on credit terms. In relation to the sale of beverages and packaging, we recognize revenue when the significant risks and rewards of ownership have been transferred to the buyer, and no significant uncertainties remain regarding recovery of the consideration due, associated costs or the possible return of goods, and there is no continuing management involvement with the goods. Our sales terms do not allow for a right of return.

Our customers can earn certain incentives, which are treated as deductions from revenue. These incentives primarily include volume-based incentive programs, free beer and cash discounts. The aggregate deductions from revenue recorded by the Company in relation to these programs was approximately USD 3.3 billion and USD 2.9 billion for the six-month periods ended 30 June 2009 and 2008, respectively and USD 6.3 billion, USD 4.8 billion, and USD 3.8 billion for the years ended 31 December 2008, 2007 and 2006, respectively. In preparing the financial statements, management must make estimates related to the contractual terms, customer performance and sales volume to determine the total amounts recorded as deductions from revenue. Management also considers past results in making such estimates. The actual amounts ultimately paid may be different from our estimates. Such differences are recorded once they have been determined and have historically not been significant.

In many jurisdictions, excise taxes make up a large proportion of the cost of beer charged to our customers. The aggregate deductions from revenue recorded by the Company in relation to these taxes was USD 4.0 billion and USD 3.2 billion for the six-month periods ended 30 June 2009 and 2008, respectively and USD 6.8 billion, USD 6.0 billion and USD 5.2 billion for the years ended 31 December 2008, 2007 and 2006, respectively.

Accounting for Business Combinations and Impairment of Goodwill and Intangible Assets

We have made acquisitions that included a significant amount of goodwill and other intangible assets, including the acquisition of Anheuser-Busch.

Our acquisition of Anheuser-Busch was accounted for using the purchase method of accounting under IFRS. The provisional allocation of the purchase price to Anheuser-Busch’s property, plant and equipment, intangible assets, investments in associates, interest bearing loans and borrowings and employee benefits is reflected in our consolidated balance sheet as of 31 December 2008. The provisional allocation of the purchase price to the other Anheuser-Busch’s assets and liabilities is based on the current best estimates of our management. We are still in the process of finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed in compliance with IFRS 3. The purchase price allocation is expected to be finalized by December 2009 and may result in further adjustment to the carrying value of Anheuser-Busch’s recorded assets and liabilities and the determination of any residual amount that will be allocated to goodwill, although we do not believe these further adjustments will be material. The provisional allocation, as of 31 December 2008, of the purchase price included the following:

 

   

The transaction resulted in USD 32.2 billion of goodwill, which was provisionally allocated primarily to the U.S. business on the basis of expected synergies.

 

   

Most of the value of the acquired intangible assets relates to brands with indefinite life. The determination that brands have indefinite life is based on a series of factors, including the brand history, the operating plan and the countries in which the brands are sold. The brands with indefinite life include the Budweiser family (including Bud and Bud Light), the Michelob brand family, the Busch brand family and the Natural brand family; the total fair value of such brands was determined to be USD 21.5 billion.

 

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The total fair value of acquired distribution agreements and favourable contracts was determined to be USD 335 million. These are being amortised over the term of the associated contracts, ranging from 3 to 18 years.

 

   

Investments in associates (including Grupo Modelo) were valued by considering the respective share prices and exchange rates prevailing on 18 November 2008. The valuation of our stake in Tsingtao was adjusted to reflect the consideration from the disposal of a 19.9% interest on 30 April 2009 (as announced on 23 January 2009).

 

   

A deferred tax liability of USD 10.6 billion was accrued on most fair value adjustments based on a tax rate of 39%.

For additional information on the purchase price allocation, see note 6 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

We exercise significant judgment in the process of identifying tangible and intangible assets and liabilities, valuing such assets and liabilities and in determining their remaining useful lives. We generally engage third-party valuation firms to assist in valuing the acquired assets and liabilities. The valuation of these assets and liabilities is based on the assumptions and criteria which include, in some cases, estimates of future cash flows discounted at the appropriate rates. The use of different assumptions used for valuations purposes including estimates of future cash flows or discount rates may have resulted in different estimates of value of assets acquired and liabilities assumed. Although we believe that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from the forecasted amounts and the difference could be material.

We test our goodwill and other long-lived assets for impairment annually or whenever events and circumstances indicate that the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those items. Our cash flow estimates are based on historical results adjusted to reflect our best estimate of future market and operating conditions. Our estimates of fair values used to determine the resulting impairment loss, if any, represent our best estimate based on forecasted cash flows, industry trends and reference to market rates and transactions. Impairments can also occur when we decide to dispose of assets.

The key judgments, estimates and assumptions used in the fair-value-less-cost-to-sell calculations are as follows:

 

   

The first year of the model is based on management’s best estimate of the free cash flow outlook for the current year;

 

   

In the second to fourth years of the model, free cash flows are based on our strategic plan as approved by key management. Our strategic plan is prepared per country and is based on external sources in respect of macro-economic assumptions, industry, inflation and foreign exchange rates, past experience and identified initiatives in terms of market share, revenue, variable and fixed cost, capital expenditure and working capital assumptions;

 

   

For the subsequent six years of the model, data from the strategic plan is extrapolated using simplified assumptions such as constant volumes and variable cost per hectoliter and fixed cost linked to inflation, as obtained from external sources;

 

   

Cash flows after the first ten-year period are extrapolated using expected annual long-term consumer price indices, based on external sources, in order to calculate the terminal value;

 

   

Projections are made in the functional currency of the business unit and discounted at the unit’s weighted average cost of capital. The latter ranged primarily between 7.6% and 25.5% in euro nominal terms for goodwill impairment testing conducted for 2008; and

 

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Cost to sell is assumed to reach 2% of the entity value based on historical precedents.

The above calculations are corroborated by valuation multiples, quoted share prices for publicly-traded subsidiaries or other available fair value indicators.

Impairment testing of intangible assets with an indefinite useful life is primarily based on a fair value approach applying multiples that reflect current market transactions to indicators that drive the profitability of the asset or the royalty stream that could be obtained from licensing the intangible asset to another party in an arm’s length transaction.

For additional information on goodwill, intangible assets, tangible assets and impairments, see notes 13, 14, and 15 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Pension and other Post-Retirement Benefits

We sponsor various post-employment benefit plans world-wide. These include pension plans, both defined contribution plans, and defined benefit plans, and other post-employment benefits (OPEB). Usually, pension plans are funded by payments made both by us and our employees, taking into account the recommendations of independent actuaries. We maintain funded and unfunded plans.

Defined contribution plans

Contributions to these plans are recognised as expenses in the period in which they are incurred.

Defined benefit plans

For defined benefit plans, expenses are assessed separately for each plan using the projected unit credit method. The projected unit credit method takes into account each period of service as giving rise to an additional unit of benefit to measure each unit separately. Under this method, the cost of providing pensions is charged to the income statement during the period of service of the employee. The amounts charged to the income statement consist of current service cost, interest cost, the expected return of any plan assets, past service costs and the effect of any settlements and curtailments. The obligations of the plan recognised in the balance sheet are measured at the current value of the estimated future cash outflows using a discount rate equivalent to the bond rates with maturity terms similar to those of the obligation, less any past service cost not yet recognised and the fair value of any plan assets. Past service costs result from the introduction of a new plan or changes to an existing plan. They are recognised in the income statement over the period the benefit vests. Actuarial gains and losses consist of the effects of differences between the previous actuarial assumptions and what has actually occurred and the effects of changes in actuarial assumptions. Actuarial gains and losses are fully recognised in equity. For further information on how changes in these assumptions could change the amounts recognised see the sensitivity analysis within note 26 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

A portion of our plan assets is invested in equity securities. The equity markets have experienced volatility, which has affected the value of our pension plan assets. This volatility may make it difficult to estimate the long-term rate of return on plan assets. Actual results that differ from our assumptions are accumulated and amortised over future periods and therefore generally affect our recognised expense and recorded obligation in such future periods. Our assumptions are based on actual historical experience and external data regarding compensation and discount rate trends. While we believe that our assumptions are appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension obligation and our future expense.

 

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Where the calculated amount of a defined benefit plan liability is negative (an asset), we recognise such pension asset to the extent of any unrecognised past service costs plus any economic benefits available to us either from refunds or reductions in future contributions.

Other post-employment obligations

We and our subsidiaries provide health care benefits and other benefits to certain retirees. The expected costs of these benefits are recognised over the period of employment, using an accounting methodology similar to that for defined benefit plans.

Share-Based Compensation

We have various types of equity settled share-based compensation schemes for employees. Employee services received, and the corresponding increase in equity, are measured by reference to the fair value of the equity instruments as at the date of grant, excluding the impact of any non-market vesting conditions. Fair value of stock options is estimated by using the binomial Hull model on the date of grant based on certain assumptions. Those assumptions are described in note 17 to our consolidated interim financial statements as of 30 June 2009 and for the six-month periods ended 30 June 2009 and 2008, and note 27 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 included in this Form F-4 and include, among others, the dividend yield, expected volatility and expected life of stock options. The binominal Hull model assumes that all employees would immediately exercise their options if our share price were 2.5 times above the option exercise price. As a consequence, no single expected option life applies, whereas the assumption of the expected volatility has been set by reference to the implied volatility of our shares in the open market and in light of historical patterns of volatility.

Contingencies

The preparation of our financial statements requires management to make estimates and assumptions regarding contingencies which affect the valuation of assets and liabilities at the date of the financial statements and the revenue and expenses during the reported period.

We disclose material contingent liabilities unless the possibility of any loss arising is considered remote, and material contingent assets where the inflow of economic benefits is probable. We discuss our material contingencies in note 19 to our consolidated interim financial statements as of 30 June 2009 and for the six-month periods ended 30 June 2009 and 2008, and note 33 to our audited consolidated financial statements as of 31 December 2008 and 2007 and for the three years ended 31 December 2008.

Under IFRS, we record a provision for a loss contingency when it is probable that a future event will confirm that a liability has been incurred at the date of the financial statements, and the amount of the loss can be reasonably estimated. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur – and typically those events will occur a number of years in the future. The accruals are adjusted as further information becomes available.

As discussed in “Business Description—Legal and Arbitration Proceedings”, note 19 to our consolidated interim financial statements as of 30 June 2009, and for the six-month periods ended 30 June 2009 and 2008, and in note 33 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, legal proceedings covering a wide range of matters are pending or threatened in various jurisdictions against us. We record provisions for pending litigation when we determine that an unfavourable outcome is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates.

 

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Deferred and Current Income Taxes

We recognise deferred tax effects of tax loss carry-forwards and temporary differences between the financial statement carrying amounts and the tax basis of our assets and liabilities. We estimate our income taxes based on regulations in the various jurisdictions where we conduct business. This requires us to estimate our actual current tax exposure and to assess temporary differences that result from different treatment of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which we record on our consolidated balance sheet. We regularly review the deferred tax assets for recoverability and will only recognise these if we believe that it is probable that there will be sufficient taxable profit against any temporary differences that can be utilised, based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences.

The carrying amount of a deferred tax asset is reviewed at each balance sheet date. We reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profit will be available. If the final outcome of these matters differs from the amounts initially recorded, differences may positively or negatively impact the income tax and deferred tax provisions in the period in which such determination is made.

Accounting for Derivatives

We enter into exchange contracts, exchange traded foreign currency futures, interest rate swaps, cross-currency interest rate swaps, forward rate agreements, exchange traded interest rate futures, aluminium swaps and forwards, exchange traded sugar futures and exchange traded wheat futures. Our policy prohibits the use of derivatives in the context of speculative trading.

Derivative financial instruments are recognised initially at fair value. Fair value is the amount for which the asset could be exchanged or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Subsequent to initial recognition, derivative financial instruments are re-measured taking into account their fair value on the financial statements date. Depending on the type of instrument the changes in fair value are recognised, whether fair value hedging directly in the income statement while cash flow hedging in both equity and income statement.

The estimated fair value amounts have been determined by us using available market information and appropriate valuation methodologies. However, considerable judgment is necessarily required in interpreting market data to develop the estimates of fair value. The fair values of financial instruments that are not traded in an active market (for example, unlisted equities, currency options, embedded derivatives and over-the-counter derivatives) are determined using valuation techniques. We use judgment to select an appropriate valuation methodology and underlying assumptions based principally on existing market conditions. Changes in these assumptions may cause the company to recognise impairments or losses in the future periods.

Although our intention is to maintain these instruments through maturity, they may be realised at our discretion. Should these instruments be settled only on their respective maturity dates, any effect between the market value and estimated yield curve of the instruments would be totally eliminated.

BUSINESS ZONES AND SECONDARY SEGMENTS

Both from an accounting and managerial perspective, we are organised along seven business units or zones: North America, Latin America North (which includes Brazil, the Dominican Republic, Guatemala, Ecuador, Venezuela and Peru), Latin America South (which includes Bolivia, Paraguay, Uruguay, Argentina and Chile), Western Europe, Central & Eastern Europe, Asia Pacific and Global Export & Holding Companies. Prior

 

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to 2007, Latin America North and Latin America South together constituted one business zone—Latin America. Following the Anheuser-Busch acquisition in November 2008, the Anheuser-Busch businesses are reported according to their geographical presence in the following segments: the U.S. beer business and Grupo Modelo are reported in North America; the U.K. business is reported in Western Europe; the Harbin, Budweiser China and Tsingtao businesses are reported in Asia Pacific; and the Export, Entertainment and Packaging businesses are reported in Global Export & Holding Companies.

The financial performance of each business zone, including the business zone’s sales volume and revenue, is measured based on our product sales within the countries that comprise that business zone rather than based on products manufactured within that business zone but sold elsewhere. The Global Export & Holding Companies business zone is comprised of our headquarters and the countries in which our products are sold only on an export basis and in which we do not otherwise have any operations or production activities. Beginning in 2007, the Global Export & Holding Companies business zone also encompassed the distribution platform established under the Import Agreement we entered into with Anheuser-Busch, Inc. for the import of our European brands into the United States. As a result, our North America zone during that period was comprised mainly of sales within Canada and the export of our Canadian brands into the U.S. market. Since the Anheuser-Busch acquisition in November 2008, the transactions under the Import Agreement are considered intra-company transactions and imports of our European brands into the United States are reported under the North America zone, which also encompasses Anheuser-Busch’s U.S. beer business and Grupo Modelo, in addition to the pre-existing Canadian business.

On a pro-forma basis to illustrate the impact of the Anheuser-Busch acquisition as if we had owned Anheuser-Busch for the entire 2008 fiscal year, North America would have accounted for 33.8% of our consolidated volumes in 2008, Latin America North for 24.5%, Central & Eastern Europe for 11.0%, Asia Pacific for 13.4%, Western Europe for 8.4%, Latin America South for 8.2% and Global Export & Holding Companies for 0.7%. A substantial portion of our operations are carried out through our two largest subsidiaries, Anheuser-Busch (wholly-owned) and AmBev (61.75% owned as of 30 June 2009) and their respective subsidiaries.

Throughout the world, we are chiefly active in the beer business. However, we also have non-beer activities (primarily consisting of soft drinks). As a result, we historically reported our beer and non-beer business results as secondary segments within certain countries in our Latin America and Western Europe business zones, in particular, Brazil, the Dominican Republic, Peru, Venezuela, Uruguay, Argentina and Germany. Please refer to note 5 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further details on our secondary segments. Both the beer and non-beer segments comprise sales of brands that we own or license, third-party brands that we brew or otherwise produce as a subcontractor and third-party products that we sells through our distribution network.

EQUITY INVESTMENTS

We own a 35.12% direct interest in Grupo Modelo, Mexico’s largest brewer and producer of the Corona brand, and a 23.25% direct interest in Grupo Modelo’s operating subsidiary Diblo, S.A. de C.V. (“ Diblo ”). Our direct investments in Grupo Modelo and Diblo give us an effective (direct and indirect) 50.2% equity interest in Diblo. We hold nine of 19 positions on Grupo Modelo’s board of directors (with a controlling shareholders trust holding the other 10 positions) and also have membership on the audit committee. However, we do not have voting or other effective control of either Diblo or Grupo Modelo and consequently account for our investments using the equity method.

Beginning in 2003, Anheuser-Busch participated in a strategic alliance with Tsingtao, one of the largest brewers in China and producer of the Tsingtao brand. Through the Anheuser-Busch acquisition, we acquired Anheuser-Busch’s 27% economic ownership interest, and 20% voting interest, in Tsingtao. Local government authorities held the proxy voting rights for the 7% difference between our voting and economic stakes. Following

 

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the Anheuser-Busch acquisition, we announced that we had entered into an agreement with Asahi Breweries, Ltd., whereby Asahi acquired 19.9% of Tsingtao for USD 667 million. The sale closed on 30 April 2008 and the proceeds from the sale were used to repay part of the Facility B under the senior debt facilities incurred as a result of the Anheuser-Busch acquisition. On 8 May 2009, we announced that we had entered into an agreement with a private investor, Mr. Chen Fashu, to sell our remaining 7% stake in Tsingtao for USD 235 million. The sale was completed on 5 June 2009.

See note 16 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further details on these equity investments.

RESULTS OF OPERATIONS

Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008

Volumes

Our reported volumes include both beer and non-beer (primarily carbonated soft drinks) volumes. In addition, volumes include not only brands that we own or license, but also third-party brands that we brew or otherwise produce as a subcontractor and third-party products that we sell through our distribution network, particularly in Western Europe. Volumes sold by the Global Export & Holding Companies business are shown separately. Our pro-rata share of volumes in Grupo Modelo and Tsingtao are not included in the reported volumes.

The table below summarises the volume evolution by zone.

 

     Six months ended
30 June 2009
   Six months ended
30 June 2008
   Change  
     (thousand hectoliters)    (%) (1)  

North America

   68,846    6,040    -   

Latin America North

   49,960    47,244    5.7   

Latin America South

   15,841    15,789    0.3   

Western Europe

   16,458    16,689    (1.4

Central & Eastern Europe

   20,736    22,422    (7.5

Asia Pacific

   25,953    17,070    52.0   

Global Export & Holding Companies

   2,481    2,210    12.3   
                

Total

   200,274    127,463    57.1   
                

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our six-month consolidated volumes for the period ended 30 June 2009 increased by 72.8 million hectoliters, or 57.1%, to 200.3 million hectoliters compared to the volumes for the six months ended 30 June 2008.

 

   

The November 2008 acquisition of Anheuser-Busch, which was included within our consolidated scope for the six months ended 30 June 2009, increased our volumes by 74.2 million hectoliters. The acquisition primarily affected our North American volumes and, to a lesser degree, our Asia Pacific, Western Europe and Global Export and Holding Companies volumes.

 

   

Acquisitions of Budweiser distribution rights in Paraguay and a Pepsi bottler in Bolivia during the six months ended 30 June 2009 resulted in a 0.3 million hectoliter increase in volumes compared to the six-month period ended 30 June 2008.

 

   

Our volumes over the six-month period ended 30 June 2009 also reflect a volume decrease of 0.6 million hectoliters due primarily to the sale of the Cintra brands in 2008.

 

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Excluding volume changes attributable to the acquisitions and the disposal described above, our consolidated beer volumes would have decreased by 1.9% and our own beer volumes would have decreased by 1.4% in the six months ended 30 June 2009 compared to the six-month volumes for the period ended 30 June 2008, slightly ahead of our consolidated beer volumes, as a result of our ongoing focus on growing our own branded volumes.

In the six months ended 30 June 2009, our soft drinks volumes grew by 5.1% compared to our volumes for the six-month period ended 30 June 2008.

North America

Our volumes in North America grew by 62.8 million hectoliters during the six-month period ended 30 June 2009 compared to our volumes for the six-month period ended 30 June 2008. This was primarily due to the inclusion of Anheuser-Busch volumes in our results following the Anheuser-Busch acquisition.

Latin America North

Our volumes in the Latin America North zone grew by 2.7 million hectoliters during the six-month period ended 30 June 2009 compared to the six-month period ended 30 June 2008, as a result of the successful launch of new packaging, enhanced marketing efforts and a favourable Carnival calendar, supported by higher consumer disposable income resulting from minimum wage increases and a lower rate of inflation for food prices. Better weather compared to the same period last year also contributed to volume increases.

Latin America South

Latin America South volumes for the six months ended 30 June 2009 increased by 0.3% in the six-month period ended 30 June 2009 compared to the six months ended 30 June 2008, mainly as a result of the acquisition of Budweiser distribution rights in Paraguay and a Pepsi bottler in Bolivia. Excluding the effect of these acquisitions, our volumes would have declined by 1.3%, primarily due to industry weakness throughout most of the Zone, especially in soft drinks. Despite the challenging environment, we were able to increase beer volumes in Argentina, Chile, and Uruguay.

Western Europe

Our volumes for the six months ended 30 June 2009 declined by 1.4% compared with our volumes for the six months ended 30 June 2008 despite the Anheuser-Busch acquisition, primarily as a result of industry weakness in most Western European markets and a significant decrease in subcontracting volumes as a result of our strategy of focusing on our own beer products. The decline was partially offset by increased volumes due to the inclusion of the UK operations of Anheuser-Busch.

Central & Eastern Europe

Our 7.5% decline in volumes for the six-month period ended 30 June 2009 as compared to the six-month period ended 30 June 2008 is largely attributable to continued volume reductions in certain of our less profitable brands in Russia and Ukraine, as well as to an overall industry slowdown.

Asia Pacific

In the six months ended 30 June 2009, our volumes increased by 52.0% compared to the six months ended 30 June 2008, which was primarily due to the inclusion of Anheuser-Busch volumes in our results following the Anheuser-Busch acquisition. Excluding the effect of the acquisition, the Zone experienced a slight volume decline as growth in the North East of China and South Korea was more than offset by reduced volumes in the South East of China.

 

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Global Export & Holding Companies

During the six months ended 30 June 2009, Global Export & Holding Company volumes increased by 12.3% compared to the six months ended 30 June 2008, largely as a result of the inclusion of Anheuser-Busch’s international volumes in our results following the Anheuser-Busch acquisition.

Revenue

Revenue refers to turnover less excise taxes and discounts. See “—Key Factors Affecting Results of Operations—Excise Taxes”.

The following table reflects changes in revenue across our business zones for the six months ended 30 June 2009 as compared to our revenue for the six months ended 30 June 2008.

 

    Six months ended
30 June 2009
  Six months ended
30 June 2008
  Change  
    (USD million)   (%) (1)  

North America

  7,871   1,122   -   

Latin America North

  3,111   3,731   (16.6

Latin America South

  883   812   8.7   

Western Europe

  2,049   2,427   (15.6

Central & Eastern Europe

  1,222   1,576   (22.5

Asia Pacific

  1,074   685   56.8   

Global Export & Holding Companies

  1,487   210   -   
             

Total

  17,698   10,563   67.5   
             

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated revenue was USD 17,698 million for the six months ended 30 June 2009. This represented growth of 67.5% as compared our consolidated revenue for the six months ended 30 June 2008 of USD 10,563 million.

 

   

USD 8,856 million of the growth in revenue during the six months ended 30 June 2009 was attributable to the Anheuser-Busch acquisition.

 

   

Acquisitions of Budweiser distribution rights in Paraguay and a Pepsi bottler in Bolivia during the six months ended 30 June 2009 resulted in a USD 9 million increase in revenue compared to the six-month period ended 30 June 2008.

 

   

Our consolidated revenue for the six-month period ended 30 June 2009 also reflects a net revenue decrease of USD 23 million as compared to the six-month period ended 30 June 2008 attributable to the impact of the sale of the Cintra brands.

 

   

Our consolidated revenue for the six months ended 30 June 2009 also reflects a negative currency translation impact of USD 2,186 million.

Our revenue for the six months ended 30 June 2009 was partly impacted by the developments in volume discussed above. Our revenue per hectoliter on a consolidated basis (which excludes revenue from our entertainment and packaging activities) increased as a result of the business acquisitions and disposals described above (as the revenue per hectoliter of Anheuser-Busch is higher than the average revenue per hectoliter of the AB InBev Group as a whole) and as a result of revenue management activities. However, this increase was generally offset by negative currency translation effects.

 

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The U.S. entertainment business contributed USD 580 million to our revenue for the six months ended 30 June 2009. The U.S. packaging business contributed USD 722 million in revenue for the same period.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, the main business zones contributing to revenue growth were Latin America North, Latin America South and Central and Eastern Europe. In Latin America North, revenue growth was attributable to higher volumes. In Latin America South and Central and Eastern Europe, revenue growth was primarily attributable to revenue management initiatives.

Also excluding the effects of the business acquisitions and disposals and the currency translation effects described above, our revenue increased by 4.5% for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008. This change in revenue included a decrease of 0.8% as a result of lower overall volumes, which was offset by a 5.4% increase attributable to higher revenue per hectoliter, primarily as a result of revenue management initiatives. These revenue management initiatives include price increases, particularly in Latin America South and Central and Eastern Europe, and our strategy to improve product mix by focusing on building branded volumes while reducing subcontracted volumes and lower margin beer products, particularly in Western Europe and Central and Eastern Europe. In Brazil, despite the price increases implemented during the summer, revenue per hectoliter was negatively impacted by higher than inflation tax increases (excise and value-added taxes).

Cost of Sales

The following table reflects changes in cost of sales across our business zones for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008:

 

    Six months ended
30 June 2009
    Six months ended
30 June 2008
    Change  
    (USD million)     (%) (1)  

North America

  (3,785   (363   -   

Latin America North

  (986   (1,301   24.2   

Latin America South

  (351   (344   (2.0

Western Europe

  (922   (1,141   19.2   

Central & Eastern Europe

  (584   (799   26.9   

Asia Pacific

  (571   (361   (58.2

Global Export & Holding Companies

  (1,191   (156   -   
                 

Total

  (8,390   (4,465   (87.9
                 

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated cost of sales was USD 8,390 million for the six months ended 30 June 2009. This represented an increase of 87.9% or USD 3,925 million as compared to our consolidated cost of sales for the six months ended 30 June 2008.

 

   

The Anheuser-Busch acquisition resulted in a USD 4,917 million increase in cost of sales.

 

   

Acquisitions of Budweiser distribution rights in Paraguay and a Pepsi bottler in Bolivia during the six months ended 30 June 2009 resulted in a USD 5 million increase in cost of sales compared to the six-month period ended 30 June 2008.

 

   

Our consolidated cost of sales for the six-month period ended 30 June 2009 also reflect a net decrease of USD 17 million as compared to the six-month period ended 30 June 2008 attributable to the aggregate impact of the sale of the Cintra brand.

 

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Our consolidated cost of sales for the six months ended 30 June 2009 also reflect a positive currency translation impact of USD 852 million mainly in Latin America North, Western Europe and Central and Eastern Europe.

Our cost of sales per hectoliter on a consolidated basis (which excludes cost of sales from our entertainment and packaging activities) increased for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008. The cost of sales per hectoliter increased as a result of the business acquisitions and disposals described above, because the cost of sales per hectoliter of Anheuser-Busch is higher than the average cost of sales for the AB InBev Group as a whole. In Latin America South our cost of sales per hectoliter increased as a result of higher personnel related costs, which were partially offset by increased productivity in our plants. In Latin America North the cost of sales per hectoliter further benefited from favourable currency hedges on the purchases of raw materials, whereas in Central and Eastern Europe our cost of sales per hectoliter was negatively impacted by the currency impact on our purchases. On an absolute basis, our cost of sales also increased as a result of volume increases in Latin America North and Latin America South.

Approximately 25% of our cost of sales consists of fixed costs which are not impacted by our volumes. Fixed costs comprise principally depreciation and amortization and indirect production costs.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, our cost of sales declined by 2.9% as compared to the first six months of 2008. Of this decline, 0.8% was attributable to lower volumes and 2.1% was attributable to a lower cost of sales per hectoliter. Our cost of sales per hectoliter on a consolidated basis decreased by 2.1%, as we benefited from lower commodity prices on our non-hedgeable input cost, improved procurement practices and productivity initiatives, mainly the Voyager Plant Optimization Programme.

Expenses

The discussion below relates to our operating expenses, which equal the sum of our distribution expenses, sales and marketing expenses, administrative expenses and other operating income and expenses (net), for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008. Our operating expenses do not include exceptional charges, which are reported separately.

Our operating expenses for the six months ended 30 June 2009 increased by 21.2% compared to our operating expenses for the six months ended 30 June 2008, primarily due to the inclusion of Anheuser-Busch operating expenses in our results following the Anheuser-Busch acquisition.

During 2009, we continued our efforts to shift “non-working money” (that is, expenses that do not directly impact revenue, sales volumes or beer value since they are not directly visible to consumers) into “working money” (that is, expenses directly visible to consumers).

 

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Distribution expenses

The following table reflects changes in distribution expenses across our business zones for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008:

 

    Six months ended
30 June 2009
    Six months ended
30 June 2008
    Change  
    (USD million)     (%) (1)  

North America

  (398   (212   (87.7

Latin America North

  (323   (437   26.1   

Latin America South

  (78   (65   (20.0

Western Europe

  (228   (310   26.5   

Central & Eastern Europe

  (122   (203   39.9   

Asia Pacific

  (76   (46   (65.2

Global Export & Holding Companies

  (51   (23   (121.7
                 

Total

  (1,276   (1,296   1.5   
                 

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated distribution expenses were USD 1,276 million for the six months ended 30 June 2009. This represented a decrease of USD 20 million, or 1.5%, as compared to the six months ended 30 June 2008.

 

   

The Anheuser-Busch acquisition resulted in a USD 306 million increase in distribution expense.

 

   

Acquisitions of Budweiser distribution rights in Paraguay and a Pepsi bottler in Bolivia during the six months ended 30 June 2009 resulted in a USD 4 million increase in distribution expenses compared to the six-month period ended 30 June 2008.

 

   

Our consolidated distribution expenses for the six-month period ended 30 June 2009 reflect a net decrease of USD 7 million as compared to the six-month period ended 30 June 2008 attributable to the aggregate impact of the sale of the Cintra brands and Labatt USA.

 

   

Our consolidated distribution expenses for the six months ended 30 June 2009 also reflect a positive currency translation impact of USD 233 million.

Aside from the effects of the Anheuser-Busch acquisition and currency translation, the decrease in distribution expenses was mainly due to the realisation of synergies in North America, lower tariffs in Central and Eastern Europe, and lower fuel and transportation costs in most Zones other than Latin America South.

Sales and marketing expenses

Marketing expenses include all costs relating to the support and promotion of brands, including operating costs (such as payroll and office costs) of the marketing departments, advertising costs (such as agency costs and media costs), sponsoring and events and surveys and market research. Sales expenses include all costs relating to the selling of products, including operating costs (such as payroll and office costs) of the sales department and sales force.

 

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The following table reflects changes in sales and marketing expenses across our business zones for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008:

 

     Six months ended
30 June 2009
    Six months ended
30 June 2008
    Change  
     (USD million)     (%) (1)  

North America

   (793   (144   -   

Latin America North

   (414   (415   0.2   

Latin America South

   (77   (91   15.4   

Western Europe

   (379   (508   25.4   

Central & Eastern Europe

   (226   (328   31.1   

Asia Pacific

   (256   (162   (58.0

Global Export & Holding Companies

   (126   (45   (180.0
                  

Total

   (2,271   (1,694   (34.1
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated sales and marketing expenses were USD 2,271 million for the six months ended 30 June 2009. This represented an increase of USD 577 million, or 34.1%, as compared to our sales and marketing expenses for the six months ended 30 June 2008.

 

   

The Anheuser-Busch acquisition resulted in a USD 920 million increase in sales and marketing expense.

 

   

Acquisitions of Budweiser distribution rights in Paraguay and a Pepsi bottler in Bolivia during the six months ended 30 June 2009 resulted in a USD 1 million increase in sales and marketing expenses compared to the six-month period ended 30 June 2008.

 

   

Our consolidated sales and marketing expenses for the six-month period ended 30 June 2009 reflect a net decrease of USD 5 million as compared to the six-month period ended 30 June 2008 attributable to the aggregate impact of the sale of the Cintra brands and Labatt USA.

 

   

Our consolidated sales and marketing expenses for the six months ended 30 June 2009 also reflect a positive currency translation impact of USD 322 million.

Excluding the effects of the business acquisitions and disposals described above and currency translation, our overall sales and marketing expenses for the six months ended 30 June 2009 decreased as a result of significant media and advertising cost deflation and a favourable comparison to the six months ended 30 June 2008, when a number of product launches and costs related to the Olympic Games increased our sales and marketing expenses. These factors more than offset higher sales and marketing expenses in Latin America North.

Administrative expenses

The following table reflects changes in administrative expenses across our business zones for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008:

 

     Six months ended
30 June 2009
    Six months ended
30 June 2008
    Change  
     (USD million)     (%) (1)  

North America

   (297   (59   -   

Latin America North

   (232   (223   (4.0

Latin America South

   (34   (28   (21.4

Western Europe

   (182   (186   2.2   

Central & Eastern Europe

   (88   (79   (11.4

Asia Pacific

   (77   (46   (67.4

Global Export & Holding Companies

   (180   (109   (65.1
                  

Total

   (1,090   (730   (49.3
                  

 

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(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated administrative expenses were USD 1,090 million during the six months ended 30 June 2009. This represented an increase of USD 360 million, or 49.3%, as compared to our consolidated administrative expenses for the period ended 30 June 2008.

 

   

USD 295 million of the increase in administrative expense was attributable to the Anheuser-Busch acquisition.

 

   

Our consolidated administrative expenses for the six months ended 30 June 2009 also reflect a positive currency translation impact of USD 168 million.

The rest of the increase in our administrative expenses was a result of higher variable compensation recorded during the six months ended 30 June 2009, as compared to the six months ended 30 June 2008, when most Zones recorded lower variable compensation accruals based on the performance of the business during the period.

Other operating income/(expense)

The following table reflects changes in other operating income and expenses across our business zones for the six-month period ended 30 June 2009 as compared to the six-month period ended 30 June 2008:

 

     Six months ended
30 June 2009
    Six months ended
30 June 2008
    Change  
     (USD million)     (%) (1)  

North America

   73      (3   -   

Latin America North

   90      101      (10.9

Latin America South

   (2   5      (140.0

Western Europe

   (52   (101   48.5   

Central & Eastern Europe

   (62   (77   19.5   

Asia Pacific

   7      (2   -   

Global Export & Holding Companies

   297      261      13.8   
                  

Total

   350      184      90.2   
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

The net balance of our other operating income and expenses for the six months ended 30 June 2009 was USD 166 million, or 90.2%, greater than the comparable net balance for the six months ended 30 June 2008. The acquisition of Anheuser-Busch caused a USD 178 million increase in other income, while currency translation had a USD 35 million negative impact for the six months ended 30 June 2009.

Exceptional Items

Exceptional items are items which, in our management’s judgment, need to be disclosed separately by virtue of their size and incidence in order to obtain a proper understanding of our financial information. We consider these items to be of significance in nature, and accordingly, our management has excluded these items from their segment measure of performance as described in note 5 to our consolidated interim financial statements as of 30 June 2009, and for the six-month periods ended 30 June 2009 and 2008. See note 7 to our consolidated interim financial statement as of 30 June 2009 and for the six-month periods ended 30 June 2009 and 2008, and note 8 to our audited consolidated financial statement as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further information about our exceptional items.

 

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In the six months ended 30 June 2009, exceptional items consisted of restructuring charges and business and asset disposals. Exceptional items were as follows in the six months ended 30 June 2009 and 2008:

 

     Six months
ended 30 June
2009
    Six months
ended 30 June
2008
 
     (USD million)  

Restructuring (including impairment losses)

   (140   (48

Business and asset disposal

   47      (6
            

Total

   (93   (54
            

Restructuring

Exceptional restructuring charges amounted to USD 140 million in the six months ended 30 June 2009 as compared to USD 48 million for the six months ended 30 June 2008.

The exceptional restructuring charges for the six months ended 30 June 2009 total USD 140 million. The charges are primarily related to the Anheuser-Busch integration, organizational alignments and outsourcing activities in Western Europe and Asia Pacific. These changes aim to eliminate overlap or duplicated processes and activities across functions and zones. These one time expenses as a result of this series of decisions are intended to provide us with a lower cost base, a stronger focus on our core activities, quicker decision-making and improvements to efficiency, service and quality.

Our restructuring charges for the six months ended 30 June 2008 were mainly related to organizational alignments and the outsourcing of activities in Western Europe.

Business and asset disposal

For the six months ended 30 June 2009, our business and asset disposals of USD 47 million mainly related to the sale of the assets of InBev USA LLC (also doing business under the name Labatt USA) to an affiliate of KPS Capital Partners, LP.

Profit from Operations

The following table reflects changes in profit from operations across our business zones for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008:

 

     Six months
ended 30 June
2009
   Six months
ended 30 June
2008
   Change  
     (USD million)    (%) (1)  

North America

   2,717    340    -   

Latin America North

   1,345    1,454    (7.5

Latin America South

   335    287    16.7   

Western Europe

   223    132    68.9   

Central & Eastern Europe

   139    89    56.2   

Asia Pacific

   86    66    30.3   

Global Export & Holding Companies

   83    140    (40.7
                

Total

   4,928    2,508    96.5   
                

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

 

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Our profit from operations increased to USD 4,928 million for the six months ended 30 June 2009. This represented an increase of USD 2,420 million, or 96.5%, as compared to our profit from operations for the six months ended 30 June 2008.

 

   

The Anheuser-Busch acquisition resulted in a USD 2,573 million increase in profit from operations for the six months ended 30 June 2009.

 

   

Acquisitions of Budweiser distribution rights in Paraguay and a Pepsi bottler in Bolivia during the six months ended 30 June 2009 resulted in a USD 1 million decrease in profit from operations compared to the six-month period ended 30 June 2008.

 

   

The impact of the disposals of the Cintra brands and Labatt USA on our consolidated profit from operations for the six-month period ended 30 June 2009 was immaterial.

 

   

Our profit from operations for the six months ended 30 June 2009 also reflected a negative currency translation impact of USD 567 million.

 

   

Our profit from operations for the six months ended 30 June 2009 was impacted negatively by USD 93 million of certain exceptional items, as compared to a negative impact of USD 54 million for the six months ended 30 June 2008. See “—Exceptional Items” above for a description of the exceptional items during the six months ended 30 June 2009 and 2008. These exceptional items mainly affected our Global Export and Holding Companies, where exceptional items reduced our profit from operations by USD 153 million for the six months ended 30 June 2009 as compared to an increase of USD 2 million for the six months ended 30 June 2008, and our Latin America North zone, where exceptional items increased our profit from operations by USD 98 million in 2009 as compared to a reduction of USD 2 million for the six months ended 30 June 2008.

See note 5 to our consolidated interim financial statements as of 30 June 2009, and for the six months ended 30 June 2009 and 2008 for additional information on our six-month profit from operations by zone.

EBITDA, as defined

The following table reflects changes in our EBITDA, as defined, for the six months ended 30 June 2009 as compared to the six months ended 30 June 2008:

 

     Six months
ended 30 June
2009
    Six months
ended 30 June
2008
    Change
     (USD million)     (%) (1)

Profit

   2,343      1,766      32.7

Income tax expense

   820      232      -

Net finance cost

   1,993      513      -

Share of result of associates

   (228   (3   -
                

Profit from operations

   4,928      2,508      96.5

Depreciation, amortisation and impairment

   1,361      842      61.6
                

EBITDA, as defined

   6,289      3,350      87.7
                

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

A performance measure such as EBITDA, as defined, is a non-IFRS measure. The most directly comparable financial measure to EBITDA, as defined, presented in accordance with IFRS in our consolidated financial statements is profit. EBITDA, as defined, is a measure used by our management to evaluate our

 

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business performance and is defined as profit from operations before depreciation, amortisation and impairment. EBITDA, as defined, is a key component of the measures that are provided to senior management on a monthly basis at the group level, the zone level and lower levels. We believe EBITDA, as defined, is useful to investors for the following reasons.

We believe EBITDA, as defined, facilitates comparisons of our operating performance across our zones from period to period. In comparison to profit, EBITDA, as defined, excludes items which do not impact the day-to-day operation of our primary business (that is, the selling of beer and other operational businesses) and over which management has little control. Items excluded from EBITDA, as defined, are our share of result of associates, depreciation and amortization, impairment, financial charges and corporate income taxes, which management does not consider to be items that drive our company’s underlying business performance. Because EBITDA, as defined includes only items management can directly control or influence, it forms part of the basis for many of our performance targets. For example, options under our share-based compensation plan are granted such that they vest only when certain targets derived from EBITDA, as defined, are met.

We further believe that EBITDA, as defined, and measures derived from it, are frequently used by securities analysts, investors and other interested parties in their evaluation of our company and in comparison to other companies, many of which present an EBITDA performance measure when reporting their results. EBITDA, as defined, is also a key component of the measures used by banks under the senior facility agreement to evaluate compliance with our debt covenants. See “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition—Senior Facilities Agreement”.

EBITDA, as defined, does, however, have limitations as an analytical tool. It is not a recognised term under IFRS and does not purport to be an alternative to profit as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. As a result, you should not consider EBITDA, as defined, in isolation from, or as a substitute analysis for, our results of operations. Some limitations of EBITDA, as defined, are:

 

   

EBITDA, as defined, does not reflect the impact of financing costs, on our operating performance. Such costs are significant in light of our increased debt and could further increase as a result of our debt refinancing;

 

   

EBITDA, as defined, does not reflect depreciation and amortization, but the assets being depreciated and amortized will often have to be replaced in the future. EBITDA, as defined, does not reflect the impact of charges for existing capital assets or their replacements;

 

   

EBITDA, as defined, does not reflect our tax expense; and

 

   

EBITDA, as defined, may not be comparable to other similarly titled measures of other companies because not all companies use identical calculations.

Additionally, EBITDA, as defined, is not intended to be a measure of free cash flow for management’s discretionary use, as it is not adjusted for all non–cash income or expense items that are reflected in our consolidated statement of cash flows.

We compensate for these limitations, in addition to using EBITDA, as defined, by relying on our results calculated in accordance with IFRS.

Our EBITDA, as defined, increased to USD 6,289 million for the six months ended 30 June 2009. This represented an increase of USD 2,939 million, or 87.7%, as compared to our EBITDA, as defined, for the six months ended 30 June 2008.

 

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The Anheuser-Busch acquisition contributed USD 3,191 million to the increase in our EBITDA, as defined, for the six months ended 30 June 2009. Our EBITDA, as defined, for the six months ended 30 June 2009 also reflects a negative currency translation impact of USD 739 million. This net increase was partially offset by the negative USD 93 million impact of certain exceptional items in the six months ended 30 June 2009, as compared to a negative impact of USD 54 million during the six months ended 30 June 2008. The impact of our disposals of the Cintra brands and Labatt USA on our consolidated EBITDA, as defined, for the six-month period ended 30 June 2009 was immaterial.

See note 5 to our consolidated interim financial statement as of 30 June 2009, and for the six-month periods ended 30 June 2009 and 2008 for further performance measures used by our management.

Net Finance Cost

Our net finance cost for the six months ended 30 June 2009 was USD 1,993 million, as compared to USD 513 million for the six months ended 30 June 2008, or an increase of USD 1,480 million. The increase was primarily due to interest charges on the senior credit facilities used to fund the Anheuser-Busch acquisition, interest charges on existing Anheuser-Busch debt, and the amortization of the arrangement fees paid on the senior credit facilities. These increases were partially offset by lower interest charges on other debt and by foreign exchange gains.

Share of Result of Associates

Our share of result of associates for the six months ended 30 June 2009 was USD 228 million as compared to USD 3 million for the six months ended 30 June 2008, reflecting the recognition of six months of results of our direct and indirect investments in Grupo Modelo and Tsingtao following the acquisition of Anheuser-Busch.

Income Tax Expense

Our total income tax expense for the six months ended 30 June 2009 amounted to USD 820 million, with an effective tax rate of 27.9% (as compared to 11.6% for the six months ended 30 June 2008). Our income tax expense for the six months ended 30 June 2009 was mainly impacted by the acquisition of Anheuser-Busch, for which the marginal tax rate was approximately 40%, and higher realized profits at AmBev Brazil, which are taxed at a marginal tax rate of 34%. Furthermore, our non-deductible expenses increased from USD 163 million during the six months ended 30 June 2008 to USD 332 million in the six months ended 30 June 2009. The increase in expenses that are not deductible for tax purposes was mainly related to non-deductible interest expenses and foreign exchange losses on intra-group borrowings.

Profit (Pre- and Post-Minorities)

Profit attributable to our equity holders for the six months ended 30 June 2009 was USD 1,787 million (with earnings per share of USD 1.13, based on 1,582 million shares outstanding, representing the weighted average number of shares outstanding during the six months ended 30 June 2009, after taking into account share buy-back programmes and the effect of our rights offering in December 2008). The profit attributable to minority interests amounted to USD 556 million for the six months ended 30 June 2009 (as compared to USD 559 million for the six months ended 30 June 2008).

 

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Year Ended 31 December 2008 Compared to Year Ended 31 December 2007

Volumes

The following table reflects changes in our volumes across our business zones for the year ended 31 December 2008 as compared to volumes for the year ended 31 December 2007.

 

     Year ended
31 December 2008
   Year ended
31 December 2007
   Change  
     (thousand hectoliters)    (%) (1)  

North America

   26,605    12,572    111.6   

Latin America North

   101,519    100,877    0.6   

Latin America South

   33,698    30,524    10.4   

Western Europe

   33,753    36,068    (6.4

Central & Eastern Europe

   46,142    49,137    (6.1

Asia Pacific

   38,337    36,380    5.4   

Global Export & Holding Companies

   4,666    5,054    (7.7
                

Total

   284,720    270,611    5.2   
                

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our 2008 consolidated volumes increased by 14.1 million hectoliters, or 5.2%, compared to our 2007 volumes, to 284.7 million hectoliters.

 

   

15.8 million hectoliters of the increase was attributable to the Anheuser-Busch acquisition, pursuant to which Anheuser-Busch became a part of our consolidated group of companies following the closing date of the acquisition on 18 November 2008, and was reported as such for the remainder of our 2008 financial year.

 

   

0.2 million hectoliters of the 2008 increase reflected the inclusion of volumes from the Lakeport businesses in our results for the full year in 2008 as compared to inclusion of only nine months of these volumes in 2007 following the Lakeport acquisition in November 2007.

 

   

Our 2008 volumes also reflect a volume decrease of 1.2 million hectoliters primarily due to the sale of the Cintra brands and disposal of four wholesalers in 2008 and the sale of United Dutch Breweries BV business in the Netherlands in November 2007.

Excluding volume changes attributable to the business acquisitions and disposals described above, our consolidated beer volumes would have decreased by 1.2% and our own beer volumes would have decreased by 0.7% in 2008 compared to 2007 volumes, slightly ahead of our consolidated beer volumes, as a result of our ongoing focus on growing our own branded volumes.

In 2008, our soft drinks volumes grew by 4.8% compared to 2007 soft drinks volumes.

On a pro-forma basis, after adjusting reported figures to eliminate intercompany sales volumes between InBev and Anheuser-Busch, and before taking into account any volumes sold by our equity investees, the total sales volumes for the combined company for 2008 would have been approximately 416 million hectoliters.

North America

Our volumes in North America grew by 111.6% in 2008 compared to 2007 volumes, of which 110% was due to the inclusion of Anheuser-Busch volumes in our results following the Anheuser-Busch acquisition. The growth in our U.S. domestic beer volumes delivered to wholesalers in 2008 was driven mainly by the

 

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inclusion of Anheuser-Busch volumes into our results following the Anheuser-Busch acquisition and by wholesaler inventory levels returning to a normal level by year-end and the successful introduction of the Bud Light Lime brand. Domestic U.S. beer sales-to-retailer increased slightly compared to 2007 sales-to-retailers, driven mainly by the inclusion of Anheuser-Busch volumes into our results following the Anheuser-Busch acquisition and by strong gains in the supermarket and supercentre segments. In addition to this, market share performance improved across all major retail channels in the second half of 2008.

Latin America North

Volumes were essentially flat in 2008 compared to 2007 volumes, with essentially flat beer volume growth while non-beer volumes grew 3.5% compared to 2007 volumes. In Brazil, 2008 beer volumes declined by 0.2% compared to 2007 volumes reflecting the effects of weather that was colder and more humid than in 2007 and the sale of the Cintra brands during 2008. In addition, food inflation increased by twice the level of general consumer inflation, putting pressure on consumer spending. In 2008, due to price increases and aggressive competitor behaviour in can pricing, our full year market share in Brazil was 67.5%, a decrease of 0.3% from the previous year. Our Brazilian soft drinks business posted volume growth of 2.7% for 2008 compared to 2007 volumes, coupled with strong market share performance in Brazil throughout 2008.

Latin America South

The Latin America South zone volumes grew by 10.4% in 2008 compared to 2007 volumes, with beer contributing 11.5% and non-beer 8.7% growth compared to 2007 volumes. Our strong performance resulted from our focus on the premium segment, as well as successful focus on brand marketing and innovation initiatives.

Western Europe

Our own beer volumes for 2008 declined 2.5% compared to 2007 volumes due to industry weakness, especially in the United Kingdom and Belgium. Our continued significant decrease in lower value, non-branded products, consistent with our focus on our own brand portfolio and the disposal of four wholesalers in 2008 and sale of the United Dutch Breweries BV business in the Netherlands in 2007 led to a reported total 2008 volume decline of 6.4% compared to 2007 volumes. Despite this volume decline, we increased our market share in most countries in our Western European zone in 2008 compared to 2007. For instance, in the United Kingdom, our own beer volumes declined by 2.7% in 2008 compared to 2007 volumes. However, we gained 0.4% market share in 2008, of which the Stella Artois family contributed 0.2%, gaining market share for the first time since 2003, demonstrating the potential of the brand and the results of our focused commercial activities particularly with the launch of Stella Artois 4%.

Central & Eastern Europe

Our 2008 decline in volumes of 6.1% compared to 2007 volumes is largely attributable to continued volume reductions in certain of our less profitable brands in Russia and Ukraine, as well as industry slowdown. In Russia, 2008 beer volumes fell by 12.4% compared to 2007 volumes due to weak industry volumes and market share losses in the value and price segments. However, we have maintained our focus on driving the market share of higher margin and premium brands such as Siberian Crown and Klinskoye, which showed positive volumes for 2008. In Ukraine, 2008 beer volume decreased 0.7% compared to 2007 volumes, also attributable to our focus on higher margin and premium brands, such as Chernigivske, which became the number one brand in the country towards the end of the year.

Asia Pacific

In 2008, our volumes increased 5.4% compared to 2007 volumes, as strong volume growth in Korea was offset by a slight volume decline in China.

 

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Global Export & Holding Companies

In 2008, Global Export & Holding Company volumes declined by 7.7% compared to 2007 volumes, as a result of our ongoing process of transitioning to new licensing agreements in certain countries and the transition of the Anheuser-Busch Inc. Import Agreement from this zone to the North America zone and the characterisation of this agreement as an intra-company agreement since the Anheuser-Busch acquisition closed on 18 November 2008.

Revenue

The following table reflects changes in revenue across our business zones for the year ended 31 December 2008 as compared to revenue for the year ended 31 December 2007.

 

     Year ended
31 December 2008
   Year ended
31 December 2007
   Change
     (USD million)    (%) (1)

North America

   3,753    2,139    75.5

Latin America North

   7,664    6,707    14.3

Latin America South

   1,855    1,372    35.2

Western Europe

   4,754    4,725    0.6

Central & Eastern Europe

   3,267    3,006    8.7

Asia Pacific

   1,494    1,359    9.9

Global Export & Holding Companies

   720    427    68.6
              

Total

   23,507    19,735    19.1
              

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated revenue was USD 23,507 million in the year ended 31 December 2008. This represented growth of 19.1% or USD 3,772 million as compared to the 2007 revenue of USD 19,735 million.

 

   

USD 1,829 million of the 2008 revenue growth was attributable to the Anheuser-Busch acquisition.

 

   

Our 2008 consolidated revenue reflects a net revenue decrease of USD 64 million as compared to 2007 attributable to the aggregate impact of the Lakeport acquisition, the sale of the Cintra brands and four wholesalers in Western Europe during 2008 and the disposal of the United Dutch Breweries BV business in November 2007.

 

   

Our 2008 consolidated revenue also reflects a positive currency translation impact of USD 1,028 million.

Our revenue for the year ended 31 December 2008 was partly impacted by the developments in volume discussed above. Our revenue per hectoliter on a consolidated basis (which excludes revenue from our entertainment and packaging activities) increased as a result of the business acquisitions and disposals described above, as the revenue per hectoliter of Anheuser-Busch was higher than the average revenue per hectoliter of the AB InBev Group as a whole. Our revenue per hectoliter also benefited from an increase attributable to positive currency translation effects and revenue management activities.

The contribution of the U.S. entertainment business to our revenue from 18 November 2008 to 31 December 2008 was USD 91 million. The U.S. packaging business contributed USD 162 million of revenue from 18 November 2008 to 31 December 2008.

 

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Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, the main business zones contributing to revenue growth in 2008 were Latin America South, North America, Asia Pacific, Latin America North and Central & Eastern Europe. With respect to Latin America South and North America, in particular, growth was attributable to higher volumes and the effects of revenue management initiatives.

Also excluding the effect of the business acquisition and disposals and currency translation described above, our consolidated revenue grew by 5.0% for the year ended 31 December 2008 as compared to the year ended 31 December 2007. This change in revenue included a decrease of 0.2% as a result of lower overall volumes, which was offset by a 5.2% increase attributable to higher revenue per hectoliter, primarily as a result of revenue management activities and changes in our sales channels mix and geographic mix. Revenue management activities included price increases and product mix improvements driven by our effort to sell a larger proportion of premium products, which are sold for higher prices and are generally more profitable. In Western Europe, as a result of our strategy to improve product mix we reduced the sales volume of products sold under subcontracting arrangements, which are generally less profitable. In Central and Eastern Europe and Latin America South our focus on premium brands as part of our product mix initiatives contributed towards revenue growth, while price increases resulted in revenue increases in Latin America North.

Cost of Sales

The following table reflects changes in cost of sales across our business zones for the year ended 31 December 2008 as compared to the year ended 31 December 2007:

 

     Year ended
31 December 2008
    Year ended
31 December 2007
    Change  
     (USD million)     (%) (1)  

North America

   (1,586   (672   (136.0

Latin America North

   (2,634   (2,274   (15.8

Latin America South

   (782   (581   (34.6

Western Europe

   (2,232   (2,210   (1.0

Central & Eastern Europe

   (1,693   (1,385   (22.2

Asia Pacific

   (812   (677   (19.9

Global Export & Holding Companies

   (597   (319   (87.1
                  

Total

   (10,336   (8,118   (27.3
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated cost of sales was USD 10,336 million in 2008. This represented an increase of 27.3% or USD 2,218 million as compared to the 2007 cost of sales.

 

   

USD 1,165 million of the cost of sales increase was attributable to the Anheuser-Busch acquisition.

 

   

Our 2008 consolidated cost of sales reflects a net cost of sales decrease of USD 30 million as compared to 2007 attributable to the aggregate impact of the Lakeport acquisition, the sale of the Cintra brands and four wholesalers in Western Europe during 2008 and the disposal of the United Dutch Breweries BV business in November 2007.

 

   

Our 2008 consolidated cost of sales also reflects a negative currency translation impact of USD 351 million.

Our cost of sales per hectoliter on a consolidated basis (which excludes cost of sales from our entertainment and packaging activities) increased for the year ended 31 December 2008 as compared to the year

 

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ended 31 December 2007, primarily as a result of commodity price pressures. The cost of sales per hectoliter also increased as a result of the business acquisitions and disposals described above, because the cost of sales per hectoliter of Anheuser-Busch was higher than the average cost of sales for the AB InBev Group as a whole, and as a result of commodity price pressures. Aside from the effect of currency translation, the increase in cost of sales per hectoliter for Latin America South was primarily due to commodity price pressures (such as increases in barley and malt prices) and increases in wages to offset higher real inflation rates. Aside from the effect of currency translation, the increase in cost of sales per hectoliter for Central & Eastern Europe was also primarily due to significant commodity price pressures on malt, hops and packaging, and the impact of changes to our product mix. On an absolute basis, the cost of sales also increased as a result of increased volumes in Latin America South and North America, primarily due to the Anheuser-Busch acquisition.

Approximately 20% of our cost of sales consists of fixed costs which are not impacted by our volumes. Fixed costs comprise principally depreciation and amortization and indirect production costs.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, our consolidated cost of sales increased by 9.0% as compared to the year ended 31 December 2007. This increase was partly attributable to an increase of 9.3% in the cost of sales per hectoliter on a consolidated basis, as a result of commodity price increases and inflationary pressures. Lower than expected volume growth in business zones with a below average cost of sales per hectoliter, such as Latin America North and Central & Eastern Europe and the spread of industrial fixed costs over lower than expected volumes also contributed to increased cost of sales. The increase in cost of sales per hectoliter was partially offset by a decline of 0.2% in overall cost of sales as a result of lower volumes.

Expenses

Our operating expenses increased 16.3% in 2008 compared to the 2007 operating expenses, primarily due to inclusion of Anheuser-Busch operating expenses into our results following the Anheuser-Busch acquisition and higher sales and marketing expenses, which more than offset fixed-cost management and lower bonus accruals and a negative currency translation impact on our operating expenses.

In 2008, we continued our efforts to shift “non-working money” (that is, expenses that do not directly impact revenue, sales volumes or beer value since they are not directly visible to consumers) into “working money” (that is, expenses directly visible to consumers).

Distribution expenses

The following table reflects changes in distribution expenses across our business zones for the year ended 31 December 2008 as compared to the year ended 31 December 2007:

 

     Year ended
31 December 2008
    Year ended
31 December 2007
    Change  
     (USD million)     (%) (1)  

North America

   (499   (376   (32.7

Latin America North

   (916   (756   (21.2

Latin America South

   (145   (112   (29.5

Western Europe

   (592   (551   (7.4

Central & Eastern Europe

   (410   (399   (2.8

Asia Pacific

   (99   (93   (6.5

Global Export & Holding Companies

   (64   (56   (14.3
                  

Total

   (2,725   (2,343   (16.3
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

 

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Our consolidated distribution expenses were USD 2,725 million in 2008. This represented an increase of USD 382 million, or 16.3%, as compared to the 2007.

 

   

USD 98 million of the distribution expense increase was attributable to the Anheuser-Busch acquisition.

 

   

Our 2008 consolidated distribution expenses also reflect a negative currency translation impact of USD 123 million.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, the increase in distribution expenses was mainly due to higher unit transport expenses in Latin America South and Western Europe and more volumes being sold directly to customers, particularly in Latin America North.

Sales and marketing expenses

The following table reflects changes in sales and marketing expenses across our business zones for the year ended 31 December 2008 as compared to the year ended 31 December 2007:

 

     Year ended
31 December 2008
    Year ended
31 December 2007
    Change  
     (USD million)     (%) (1)  

North America

   (430   (282   (52.5

Latin America North

   (837   (672   (24.6

Latin America South

   (191   (161   (18.6

Western Europe

   (943   (914   (3.2

Central & Eastern Europe

   (660   (536   (23.1

Asia Pacific

   (333   (283   (17.7

Global Export & Holding Companies

   (116   (71   (63.4
                  

Total

   (3,510   (2,919   (20.2
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated sales and marketing expenses were USD 3,510 million in 2008. This represented an increase of USD 591 million, or 20.2%, as compared to 2007 sales and marketing expenses.

 

   

USD 210 million of the sales and marketing expense increase was attributable to the Anheuser-Busch acquisition.

 

   

Our 2008 consolidated sales and marketing expenses reflect a net sales and marketing expense decrease of USD 3 million as compared to 2007 attributable to the aggregate impact of the Lakeport acquisition, the sale of the Cintra brands and four wholesalers in Western Europe during 2008 and the disposal of the United Dutch Breweries BV business in November 2007.

 

   

Our 2008 consolidated sales and marketing expenses also reflect a negative currency translation impact of USD 151 million.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, the increase in our 2008 sales and marketing expenses reflected our focus on generating long-term revenue growth by further strengthening sales execution, investments in our own brands and continued efforts to bring innovation to our consumers regardless of impact on short-term results. In particular, key increases in sales and marketing spending to support brand growth and/or sales efforts occurred in Latin America

 

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North, Latin America South, Central & Eastern Europe (including Russia and Ukraine) and Asia Pacific, while North America and Global Export & Holding Companies recorded a decrease as a result of a reduction in non-working expenses.

Administrative expenses

The following table reflects changes in administrative expenses across our business zones for the year ended 31 December 2008 as compared to the year ended 31 December 2007:

 

     Year ended
31 December 2008
    Year ended
31 December 2007
    Change  
     (USD million)     (%) (1)  

North America

   (155   (114   (36.0

Latin America North

   (418   (352   (18.8

Latin America South

   (72   (60   (20.0

Western Europe

   (345   (321   (7.5

Central & Eastern Europe

   (176   (179   1.7   

Asia Pacific

   (101   (83   (21.7

Global Export & Holding Companies

   (211   (245   13.9   
                  

Total

   (1,478   (1,354   (9.2
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated administrative expenses were USD 1,478 million during 2008. This represented an increase of USD 124 million, or 9.2% in 2008 as compared to 2007.

 

   

USD 73 million of the administrative expense increase was attributable to the Anheuser-Busch acquisition.

 

   

Our 2008 consolidated administrative expenses also reflect a negative currency translation impact of USD 91 million.

In addition, our administrative expenses for 2008 were reduced by our ongoing commitment to cost containment, lower bonus accruals compared to 2007 and the impact of savings realised within our North America zone after the closing of the Anheuser-Busch acquisition on 18 November 2008. Cost savings in North America resulted from our Zero-Based Budgeting Programme and Anheuser-Busch’s Blue Ocean savings initiatives.

Other operating income/(expense)

The following table reflects changes in other operating income and expenses across our business zones for the year ended 31 December 2008 as compared to the year ended 31 December 2007:

 

     Year ended
31 December 2008
    Year ended
31 December 2007
    Change  
     (USD million)     (%) (1)  

North America

   (4   4      (200.0

Latin America North

   208      166      25.3   

Latin America South

   11      (15   173.3   

Western Europe

   (144   (96   (50.0

Central & Eastern Europe

   (132   (94   (40.4

Asia Pacific

   26      -      -   

Global Export & Holding Companies

   475      395      20.3   
                  

Total

   440      360      22.2   
                  

 

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(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

The net balance of our other operating income and expenses increased by USD 80 million for 2008. This represented an increase of 22.2% from the comparable net balance in 2007. Aside from the effect of the Anheuser-Busch acquisition and currency translation, the increased balance was mainly due to gains on asset disposal. Our other operating income/expense for 2008 was also negatively impacted by USD 30 million in 2008 as compared to 2007 as a result of the incremental rental cost following our disposal of certain real estate to Cofinimmo S.A. in 2007.

Exceptional Items

In 2008, exceptional items consisted of restructuring charges, fair value adjustments, business and asset disposals and disputes. Exceptional items were as follows in the years ended 31 December 2008 and 2007:

 

     Year ended
31 December
2008
    Year ended
31 December
2007
 
     (USD million)  

Restructuring (including impairment losses)

   (457   (59

Fair value adjustments

   (43     

Business and asset disposal

   (38   537   

Disputes

   (20   33   
            

Total

   (558   511   
            

See “—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—Exceptional Items” above for more information about our exceptional items.

Restructuring

Exceptional restructuring charges amounted to USD 457 million in the year ended 31 December 2008 as compared to USD 59 million in the year ended 31 December 2007 as described below.

As part of our plans to effectively integrate Anheuser-Busch, we announced on 8 December 2008 plans to cut approximately 1,400 U.S. salaried positions in our U.S. beer-related divisions. We estimate that the aggregate pre-tax expense associated with the reduction will be approximately USD 195 million. These costs were accrued at the time of the announcement in accordance with IAS 37.

Our 2008 exceptional restructuring charges further include USD 182 million in costs which mainly resulted from organisational re-alignments and the outsourcing of activities in Western Europe, global headquarters and Asia Pacific. These changes aim to eliminate overlap or duplicated processes and activities across functions and zones taking into account the right match of employee profiles with the new organisational requirements. The one-time expenses as a result of this series of decisions are expected to provide us with a lower cost base, a stronger focus on our core activities, quicker decision-making and improvements to efficiency, service and quality.

The 2008 restructuring charges also included an impairment loss of USD 80 million related to our plans to implement a new distribution model in France, involving the transfer of a controlling interest in our current integrated distribution network (CafeIn) and entry into a partnership for the distribution of our beverages. In connection with this reorganisation, CafeIn was recognised as an asset held for sale and an impairment loss of USD 80 million was recognised per end of December 2008.

 

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Fair value adjustments

Fair value adjustments, recognised in the 2008 exceptional items in the amount of USD 43 million in expense as compared to nil in 2007, related to the one-time impact of revaluing the inventories of Anheuser-Busch upon completion of the acquisition in line with IFRS 3.

Business and asset disposal

In 2008, we recognised an exceptional expense of USD 38 million in respect of business and asset disposals in 2008 as compared to a net gain of USD 537 million in 2007, mainly resulting from the sale in 2007 of Immobrew SA/NV to Cofinimmo S.A. The 2008 figure is partly related to losses recognised in connection with the above-mentioned reorganisation in France (USD 10 million). Additional losses related to business and asset disposals of previous years that were booked in 2008.

Disputes

Profit from operations as at 31 December 2008 was negatively affected by provisions for disputes of USD 20 million compared to the positive impact of a net reversal in provisions for disputes of USD 33 million in 2007.

Profit from Operations

The following table reflects changes in profit from operations across our business zones for the year ended 31 December 2008 as compared to the year ended 31 December 2007:

 

     Year ended
31 December 2008
   Year ended
31 December 2007
   Change  
     (USD million)    (%) (1)  

North America

   859    718    19.6  

Latin America North

   3,040    2,840    7.0  

Latin America South

   672    440    52.7  

Western Europe

   223    1,108    (79.9

Central & Eastern Europe

   186    392    (52.6

Asia Pacific

   153    227    (32.6

Global Export & Holding Companies

   207    147    40.8  
                

Total

   5,340    5,872    (9.1
                

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our profit from operations decreased to USD 5,340 million in 2008. This represented a decrease of USD 532 million, or 9.1%, as compared to 2007 profit from operations.

 

   

USD 44 million of the decrease in profit from operations in 2008 was attributable to the Anheuser-Busch acquisition.

 

   

Our 2008 profit from operations reflects a net decrease of USD 39 million as compared to 2007 attributable to the aggregate impact of the sale of the Cintra brands, four wholesalers in Western Europe and Immobrew SA/NV during 2008, the sale of the United Dutch Breweries BV business in November 2007 and the Lakeport acquisition in 2007.

 

   

Our 2008 profit from operations also reflects a positive currency translation impact of USD 320 million.

 

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Our 2008 profit from operations was impacted negatively by USD 558 million in 2008 as a result of certain exceptional items, as compared to a positive impact of USD 511 in 2007. See “—Exceptional Items” above for a description of the exceptional items in 2008 and 2007. These exceptional items mainly affected our Western Europe zone, where exceptional items decreased profit from operations by USD 275 million in 2008 as compared to an increase of USD 475 million in 2007, and our North America zone, where exceptional items decreased profit from operations by USD 220 million in 2008 as compared to an increase of USD 19 million in 2007.

See note 5 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further description of our 2008 and 2007 profit from operations by zone.

EBITDA, as defined

The following table reflects changes in our EBITDA, as defined, for the year ended 31 December 2008 as compared to our EBITDA, as defined, for the year ended 31 December 2007:

 

     Year ended
31 December
2008
    Year ended
31 December
2007
    Change  
     (USD million)     (%) (1)  

Profit

   3,126     4,167     (25.0

Income tax expense

   674     888     (24.1

Net finance cost

   1,600     818     95.6  

Share of result of associates

   (60   (1   -   
                  

Profit from operations

   5,340     5,872     (9.1

Depreciation, amortisation and impairment

   1,912     1,408     35.8  
                  

EBITDA, as defined

   7,252     7,280     (0.4
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

See “—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined” for additional information on our definition and use of EBITDA, as defined.

Our EBITDA, as defined, decreased to USD 7,252 million in 2008. This represented a decrease of USD 28 million, or 0.4%, as compared to 2007 EBITDA, as defined.

The Anheuser-Busch acquisition contributed to an increase in our EBITDA, as defined, in 2008 of USD 217 million, and our 2008 EBITDA, as defined, also reflects a positive currency translation impact of USD 404 million. However, these increases were offset by the decreases described below, in particular in respect of exceptional items.

 

   

Our 2008 EBITDA, as defined, reflects a net decrease of USD 42 million as compared to 2007 attributable to the aggregate impact of the sale of the Cintra brands, four wholesalers in Western Europe and Immobrew during 2008, the sale of the United Dutch Breweries BV business in November 2007 and the Lakeport acquisition in 2007.

 

   

Our 2008 EBITDA, as defined, was impacted negatively by USD 559 million in 2008 as a result of certain exceptional items, as compared to a positive impact of USD 454 million in 2007. In addition to the exceptional items for 2008 and 2007 described under “—Exceptional Items” above, the exceptional items impacting our EBITDA, as defined, included a USD 1 million reversal of an impairment affecting the disposal of assets in 2008 and a USD 56 million reversal of an impairment loss in respect of restructuring charges in 2007. The exceptional items mainly affected our Western

 

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Europe zone, where exceptional items decreased EBITDA, as defined, by USD 275 million in 2008 as compared to an increase of USD 436 million in 2007, and our North America zone, where exceptional items decreased EBITDA, as defined, by USD 220 million in 2008 as compared to an increase of USD 3 million in 2007.

See note 5 to our audited consolidated financial statement as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further performance measures used by our management. Also see note 10 to our audited consolidated financial statement as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for additional information regarding the allocation of our depreciation, amortisation and impairment charges.

Net Finance Cost

Our net finance cost was USD 1,600 million in 2008, as compared to USD 818 million in 2007. The USD 782 million increase was primarily due to the USD 187 million in exceptional finance cost described below and a USD 566 million increase in interest expense. USD 247 million of the increased interest expense stems from the interest on the Anheuser-Busch existing loans and the financing of the Anheuser-Busch acquisition following its completion on 18 November 2008. The remainder of the interest expense increase results from higher net debt positions in the parent companies (Anheuser-Busch InBev SA/NV, Cobrew NV/SA and BrandBrew SA) and AmBev Brazil, mainly as a result of dividend payments and share buyback programmes.

In connection with the combination with Anheuser-Busch, we recognised an exceptional financial expense of USD 187 million as of year-end 2008. USD 119 million of this expense related to the commitment fees for the syndicated senior debt facilities and bridge facility we entered into to finance the Anheuser-Busch acquisition and the underwriting and arrangement fees for this bridge facility. In addition, a USD 68 million loss was recognised for ineffectiveness of the interest-rate hedging on the Anheuser-Busch financing prior to the closing of the Acquisition. See note 11 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Share of Result of Associates

Our share of result of associates in 2008 was USD 60 million as compared to USD 1 million in 2007, reflecting the recognition of six weeks of results of our direct and indirect investments in Grupo Modelo and Tsingtao following the acquisition of Anheuser-Busch.

Income Tax Expense

Our total 2008 income tax expense amounted to USD 674 million with an effective tax rate of 18.0% (as compared to 17.6% in 2007). Our 2008 income tax expense was mainly impacted by the recognition of a deferred tax asset of USD 123 million following the use of tax losses not previously recognised as a result of an intragroup transfer of certain intangibles. Furthermore, we continue to benefit at the AmBev level from the impact of interest on equity payments (that is, a specific type of profit distribution to shareholders (similar to dividends) which is tax deductible for AmBev, as the payer of such profit distribution, up to an amount determined in accordance with specified rules and limits established by the government of Brazil) and tax deductible goodwill from the merger between InBev Holding Brazil S.A. and AmBev in July 2005 and the acquisition of Quinsa in August 2006. The impact of this tax deductible goodwill on income tax expense as of 31 December 2008 was USD 277 million and, unless there is a change in tax law, we expect amortisation of this goodwill to end in 2014. On the other hand, our effective tax rate in 2008 was also affected by the fact that profit before tax for the year reflects the recognition of an exceptional impairment on the French distribution network, on which no deferred tax assets are recognised. Excluding the impact of the recognition of the deferred tax asset and the exceptional expense due to the French reorganisation, the effective tax rate would have been 20.4%.

 

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Profit (Pre- and Post-Minorities)

Profit attributable to our equity holders for 2008 was USD 1,927 million (with earnings per share of USD 1.93, based on 999 million shares outstanding, representing the weighted average number of shares outstanding during 2008 taking into account share buy-back programmes and the effect of our rights offering in December 2008). Excluding the exceptional items discussed above, profit attributable to our equity holders for 2008 would have been USD 2,511 million and earnings per share would have been USD 2.51, based on 999 million shares outstanding. For more information regarding our earnings per share, see note 24 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008. The profit attributable to our equity holders in 2008 included the impact of the net financing costs, share of result of associates and income tax expense described above. The profit attributable to minority interests amounted to USD 1,199 million (as compared to USD 1,162 million in 2007). The increase in profit attributable to minority interests was due to the positive currency impact, which offset lower AmBev profits and the impact of an AmBev share buy-back programme in 2008.

Year Ended 31 December 2007 Compared to Year Ended 31 December 2006

Volumes

The following table reflects changes in sales volumes across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
   Year ended
31 December
2006
   Change  
     (thousand hectoliters)    (%) (1)  

North America

   12,572    14,342    (12.3

Latin America North

   100,877    94,586    6.7   

Latin America South

   30,524    22,566    35.3   

Western Europe

   36,068    39,147    (7.9

Central & Eastern Europe

   49,137    43,201    13.7   

Asia Pacific

   36,380    30,924    17.6   

Global Export & Holding Companies

   5,054    1,763    186.7   
                

Total

   270,611    246,529    9.8   
                

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated sales volumes grew 9.8% in 2007 as compared to 2006, with beer volumes rising 8.7% and non-beer volumes rising 16.3%. However, sales volumes of our own beer brands increased by 9.3% in that period, primarily as a result of the execution of our strategy to focus on building branded volumes, while reducing private labels and other lower margin beer products.

Beer growth generally was driven by operations in the Latin America North, Latin America South, Central & Eastern Europe and Asia Pacific business zones. The factors impacting our volume performance in 2007 in each zone are described below.

North America

Sales volumes decreased 12.3% in North America in 2007 as compared to 2006. This decrease was due to the shift of our sales of European brands to the United States from our North America business zone to our Global Export & Holding Companies zone as described below and volumes in Canada declining as a result of market share loss, which more than offset the effects of including Lakeport brands to our Canadian portfolio from April 2007 and the subsequent growth of those brands throughout the year. Our comparative volume decline in 2007 also reflects the effect of our sale of the Rolling Rock family of brands in 2006.

 

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2007 saw Anheuser-Busch, Inc. importing our European brands into the U.S. market for the first time pursuant to the Import Agreement we entered into with Anheuser-Busch, Inc. in 2006. Although initial challenges around the implementation of the agreement arose, sales and volumes challenges were resolved during the year. Following entry into this Import Agreement, our sales of European import brands to the United States were reported under the Global Export & Holding Companies zone until the Anheuser-Busch acquisition. See “—Business Zones and Secondary Segments”.

Latin America North

In Latin America North, volumes rose by 6.7% in 2007 as compared to 2006, with beer products recording a 6.3% increase and non-beer products recording a 7.5% increase. Our beer volumes in Brazil increased 6.9%, largely as a result of growth in the Brazilian beer market generally. This was despite a modest 1.0% decline in our full year Brazilian market share in 2007 as compared to 2006. Our beer volumes in the other countries of the business zone were together down 4.6%, despite positive performances in Peru and the Dominican Republic and only small declines in Guatemala and Ecuador. This decrease was primarily due to larger volume decreases in Venezuela, where the impact of declining industry volume outweighed the impact of an increase in our market share.

In March 2007, we acquired two plants through the acquisition of Cervejarias Cintra Ind. e Com. Ltda., thereby increasing our production capacity in Brazil.

Latin America South

Our volumes increased by 8.0 million hectoliters, or 35.3%, in Latin America South in 2007 as compared to 2006, with beer volumes increasing by 29.3% and non-beer volumes increasing by 45.4%.

 

   

6.5 million hectoliters of the 2007 volume increase reflected the full consolidation during 2007 of Quinsa’s results and volumes in our operating results and volumes as compared to 2006 when Quinsa’s results and volumes were fully consolidated for the last five months of 2006 following the acquisition of substantial minority interests in Quinsa from Beverage Associates Corp. in August 2006 but only proportionally consolidated for the first seven months of 2006. This volume increase was partially offset by the sale of certain Quinsa brands in December 2006 as required by Argentine antitrust authorities. The Quinsa consolidation into our business resulted in volume increases across our Latin America South zone.

 

   

Sales performance were particularly strong in Argentina, Bolivia and Uruguay in 2007. These increases were supported by the ongoing growth of our premium brands. Furthermore, to support growing demand for beer and soft drinks in the Argentine marketplace, investments have been made to expand capacity at existing breweries in Argentina, making 2007 a record year for our investment in that country. Our facilities in Bolivia and Paraguay were also expanded during the course of 2007.

Western Europe

Our total volumes in Western Europe declined 7.9% in 2007 as compared to 2006, against a backdrop of lower industry volumes generally. However, volumes of our own beer brands were down by only 7.2%. Our beer volumes in the United Kingdom declined during 2007, which coincided with a decrease in our market share in the United Kingdom’s beer segment. In particular, our flagship Stella Artois brand experienced difficulties in the United Kingdom during 2007 as reflected in loss of volumes and market share. Consistent with results in previous years, apart from the United Kingdom, we grew or maintained market share in all main Western Europe markets for 2007. Our 2007 volumes also reflected a volume decrease of 1.2 million hectoliters primarily due to the sale of the United Dutch Breweries BV business in the Netherlands in November 2007 and the sale of the Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH businesses in Germany in 2006.

 

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Central & Eastern Europe

Volume growth of 13.7% was achieved in Central & Eastern Europe in 2007, as compared to 2006. Beer volumes increased by 16.5% in Russia, leading to increased market share. We also continued to hold market leadership in Ukraine in 2007, with beer volumes rising 19.3% overall. All other markets in Central & Eastern Europe except Hungary also maintained or increased in volume. We continued to invest in our Central & Eastern Europe business zone production capabilities in 2007. In October 2007, our Russian brewery in Angarsk became operational, which should enable better satisfaction of growing demand in the East of the country. The strategic location of this brewery is expected to reduce distribution time to ensure that our beer products reach consumers with greater speed and efficiency.

Asia Pacific

As compared to 2006, Asia Pacific volumes increased by 17.6% in 2007 with growth in China, although this was lower than the growth of the Chinese market as a whole, and growth in South Korea supported by growth of the Cass brand, which resulted in a higher market share. The acquisition of Fujian Sedrin Brewery Co., Ltd. in China contributed substantially to growth in Asia Pacific in 2007.

Global Export & Holding Companies

Global Export & Holding Company volumes increased by 186.7%, as a result of improvements in volumes in countries in which our products are sold only on an export basis and in which we do not otherwise have any operations or production activities, as well as the distribution platform established under the import license entered into with Anheuser-Busch, Inc. for the import of our European brands into the United States market and the shift of certain sales activities which were previously reported in the Asia Pacific zone to the Global Export & Holding Companies zone.

Revenue

The following table reflects changes in revenue across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
   Year ended
31 December
2006
   Change  
     (USD million)    (%) (1)  

North America

   2,139    2,296    (6.8

Latin America North

   6,707    5,353    25.3   

Latin America South

   1,372    919    49.3   

Western Europe

   4,725    4,573    3.3   

Central & Eastern Europe

   3,006    2,283    31.7   

Asia Pacific

   1,359    1,144    18.8   

Global Export & Holding Companies

   427    124    244.4   
                

Total

   19,735    16,692    18.2   
                

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated revenue grew to USD 19,735 million in the year ended 31 December 2007. This represented growth of 18.2% (or USD 3,043 million) as compared to the year ended 31 December 2006.

 

   

USD 539 million of the 2007 revenue growth was attributable to the full consolidation of Quinsa into our operating results in 2007 and the acquisitions of Lakeport in Canada and Cervejarias Cintra Ind. e Com. Ltda. in Brazil in 2007 and Fujian Sedrin Brewery Co., Ltd. in China in 2006.

 

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Our 2007 revenue reflects a net revenue decrease of USD 164 million as compared to 2006 attributable to the aggregate impact of the sale of United Dutch Breweries BV in 2007 and the sales of Rolling Rock family of brands and the Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH businesses in 2006.

 

   

Our 2007 consolidated revenue also reflects a positive currency translation impact of USD 1,478 million.

Our revenue for the year ended 31 December 2007 increased as compared to the year ended 31 December 2006 as a result of the developments in volume discussed above. Our revenue per hectoliter decreased as a result of the business acquisitions and disposals described above and in particular the full consolidation of Quinsa, as the revenue per hectoliter in Latin America South is lower than the average revenue per hectoliter of the AB InBev Group as a whole. This decrease was offset by an increase attributable to positive currency translation effects.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, the main business zones contributing to revenue growth in 2007 were Latin America North, Latin America South and Central & Eastern Europe.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, our revenue increased by 7.1% for the year ended 31 December 2007 as compared to the year ended 31 December 2006. This change in revenue included a 5.2% increase as a result of higher overall volumes and a 1.9% increase attributable to higher revenue per hectoliter. This increase in revenue per hectoliter was the result of price increases in selected markets, tighter control over discounts and overall product mix improvement driven by our strategy to focus on building branded volumes while reducing private labels and lower margin beer products, particularly in Western Europe.

The shift of our sales of European brands to the United States from our North America business zone to our Global Export & Holding Companies zone increased the revenue in the Global Export & Holding Companies zone and decreased the revenue in the North America zone. The implementation of the Import Agreement with Anheuser-Busch, Inc. for the import of our European brands into the United States also generally resulted in a change in distribution platform characterised by lower revenue, lower marketing and distribution expenses and higher operating income.

Cost of Sales

The following table reflects changes in cost of sales across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
    Year ended
31 December
2006
    Change  
     (USD million)     (%) (1)  

North America

   (672   (853   21.2   

Latin America North

   (2,274   (1,869   (21.7

Latin America South

   (581   (393   (47.8

Western Europe

   (2,210   (2,031   (8.8

Central & Eastern Europe

   (1,385   (1,054   (31.4

Asia Pacific

   (677   (586   (15.5

Global Export & Holding Companies

   (319   (84   (279.8
                  

Total

   (8,118   (6,870   (18.2
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

 

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Our consolidated cost of sales was USD 8,118 million in 2007. This represented an increase of 18.2% as compared to 2006.

 

   

USD 257 million of the 2007 cost of sales increase was attributable to the full consolidation of Quinsa into our operating results in 2007 and the acquisitions of Lakeport in Canada and Cervejarias Cintra Ind. e Com. Ltda. in Brazil in 2007 and Fujian Sedrin Brewery Co., Ltd. in China in 2006.

 

   

Our 2007 consolidated cost of sales reflects a net cost of sales decrease of USD 90 million as compared to 2006 attributable to the aggregate impact of the sale of United Dutch Breweries BV in 2007 and the sales of Rolling Rock family of brands and the Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH businesses in 2006.

 

   

Our 2007 consolidated cost of sales also reflect a negative currency translation impact of USD 585 million.

Our cost of sales per hectoliter decreased as a result of the business acquisitions and disposals described above, because our acquired businesses had cost of sales per hectoliter below the average of the AB InBev Group and our disposals had cost of sales per hectoliter higher than the average cost of sales per hectoliter of the AB InBev Group. This decrease was offset by an increase in cost of sales as a result of currency translation effects. Cost of sales per hectoliter also increased as a result of inflationary pressures, though this increase was lower than the weighted average inflation of 4.0% across our countries of operation. The growth in cost of sales per hectoliter at levels below inflation in 2007 was the result of successful implementation of supply chain efficiency programmes, such as Voyager Plant Optimisation and value engineering, which aim to optimise resource utilisation and brewing process, resulting in lower consumption of raw materials and higher efficiency, while garnering quality and safety improvements. By the end of 2007, our Voyager Plant Optimisation Programme reached one of its most important milestones, becoming operational in all business zones apart from Latin America South.

Approximately 20% of our cost of sales consists of fixed costs which are not impacted by our volumes; these primarily include depreciation and amortization and indirect production costs.

Excluding the effects of the business acquisitions and disposals and the currency translation effects described above, our cost of sales increased by 7.2%. Of this increase, 5.2% was attributable to higher volumes and 2.0% was attributable to a higher cost of sales per hectoliter.

Expenses

Our operating expenses totalled USD 6,256 million in 2007, an increase of 8.3% as compared to 2006.

Distribution expenses

The following table reflects changes in distribution expenses across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
    Year ended
31 December
2006
    Change  
     (USD million)     (%) (1)  

North America

   (376   (339   (10.9

Latin America North

   (756   (626   (20.8

Latin America South

   (112   (70   (60.0

Western Europe

   (551   (522   (5.6

Central & Eastern Europe

   (399   (304   (31.3

Asia Pacific

   (93   (83   (12.0

Global Export & Holding Companies

   (56   (1   -   
                  

Total

   (2,343   (1,945   (20.5
                  

 

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(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated distribution expenses were USD 2,343 million in 2007. This represented an increase of USD 398 million, or 20.5%, as compared to 2006. Aside from the effect of the full consolidation of Quinsa, the acquisitions of Lakeport, Cervejarias Cintra Ind. e Com. Ltda. and Fujian Sedrin Brewery Co., Ltd., the sale of United Dutch Breweries BV, the Rolling Rock family of brands and the Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH businesses, and currency translation, the increase in distribution expenses was mainly due to a combination of higher volumes and the impact of increased transport costs in some operations. The higher transport costs were a consequence of increases in oil prices, which affected all business zones. The Latin America South business zone was particularly affected, registering an increase of 60% in 2007 as compared to 2006, driven by higher oil prices and labour costs.

Sales and marketing expenses

The following table reflects changes in sales and marketing expenses across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
    Year ended
31 December
2006
    Change  
     (USD million)     (%) (1)  

North America

   (282   (390   27.7   

Latin America North

   (672   (554   (21.3

Latin America South

   (161   (112   (43.8

Western Europe

   (914   (903   (1.2

Central & Eastern Europe

   (536   (391   (37.1

Asia Pacific

   (283   (218   (29.8

Global Export & Holding Companies

   (71   (85   16.5   
                  

Total

   (2,919   (2,653   (10.0
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated sales and marketing expenses were USD 2,919 million in 2007. This represented an increase of USD 266 million, or 10.0%, from 2006. Excluding the effect of (i) full consolidation of Quinsa and the acquisitions of Lakeport, Cervejarias Cintra Ind. e Com. Ltda. and Fujian Sedrin Brewery Co., Ltd., which resulted in an increase in sales and marketing expenses of USD 76 million, (ii) the sale of United Dutch Breweries BV, the Rolling Rock family of brands and the Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH businesses, which resulted in a decrease in sales and marketing expenses of USD 23 million and (iii) a negative currency translation effect of USD 216 million, our sales and marketing expenses in 2007 would have decreased by 0.6% as compared to 2006 reflecting savings in non-working sales and marketing expenses, as well as the impact of a changed business model for the import of our European brands into the United States. During 2007 (starting in February 2007), Anheuser-Busch, Inc. bore the sales and marketing costs for our European imports in the United States as reflected in the decrease in sales and marketing expenses in North America.

The reduction of non-working expenses was due to the visibility that Zero-Based Budgeting brings to our business, allowing us to better allocate resources to where they will best add value. Most business zones increased their sales and marketing expenses in 2007. North America and Western Europe were the only geographical business zones to reduce their total sales and marketing spending in 2007 as compared to 2006. Both the North America and Western Europe business zones focused on non-working expense reductions, such

 

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as agency fees, but also on procurement gains in working expenses (that is, expenses that directly impact revenue, sales volumes or beer value since they are directly visible to consumers), such as media buying and trade marketing materials.

Administrative expenses

The following table reflects changes in administrative expenses across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
    Year ended
31 December
2006
    Change  
     (USD million)     (%) (1)  

North America

   (114   (130   12.3   

Latin America North

   (352   (340   (3.5

Latin America South

   (60   (64   6.3   

Western Europe

   (321   (330   2.7   

Central & Eastern Europe

   (179   (176   (1.7

Asia Pacific

   (83   (68   (22.1

Global Export & Holding Companies

   (245   (240   (2.1
                  

Total

   (1,354   (1,348   (0.4
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

Our consolidated administrative expenses were essentially flat in 2007 at USD 1,354 compared to 2006. This reflected our ongoing commitment to cost containment and was partly impacted by a higher accrual for bonus payments in 2006 offsetting a net increase in administrative expenses arising from the acquisitions and disposals of businesses during 2007 and 2006. In all cases, including Central & Eastern Europe where it was implemented in 2007, the reduction in administrative expenses was primarily the result of Zero-Based Budgeting efforts. The creation of shared service centres in 2006 also contributed in certain zones as did the change of business model for the import of our European brands to the United States.

Other operating income/(expense)

The following table reflects changes in other operating income and expenses across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
    Year ended
31 December
2006
    Change  
     (USD million)     (%) (1)  

North America

   4      (8   150.0   

Latin America North

   166      76      118.4   

Latin America South

   (15   (11   (36.4

Western Europe

   (96   (135   28.9   

Central & Eastern Europe

   (94   (100   6.0   

Asia Pacific

        (1     

Global Export & Holding Companies

   395      346      14.2   
                  

Total

   360      167      115.6   
                  

 

(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

 

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The net balance of our other operating income and expenses resulted in a gain of USD 360 million for 2007. The main drivers were increased fiscal incentives in Latin America North, the release of provisions in Western Europe, gains on sales of assets in Western Europe and Central & Eastern Europe and increased royalties related to the Import Agreement with Anheuser-Busch, Inc.

Exceptional Items

Exceptional items, which are items of income or expense that do not occur regularly as part of our normal activities, consisting of restructuring charges, business and asset disposals and disputes, impacted our profit from operations as follows in the years ended 31 December 2007 and 2006:

 

     Year ended
31 December
2007
    Year ended
31 December
2006
 
     (USD million)  

Restructuring (including impairment losses)

   (59   (174

Business and asset disposal

   537      (24

Disputes

   33      80   
            

Total

   511      (118
            

See “—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—Exceptional Items” above for more information about our exceptional items.

Restructuring

Exceptional restructuring charges amounted to a net loss of USD 59 million in our profit from operations in 2007 as compared to a net loss of USD 174 million in 2006. The 2007 restructuring charges consisted of USD 115 million for organisational alignments in Western Europe, Central & Eastern Europe and the global headquarters and towards the further implementation of our European shared service centres for transactional services. These changes aimed to eliminate overlap or duplicated processes and activities across functions and business zones taking into account the right match of employee profiles with the new organisational requirements. The targeted outcome was a stronger focus on our core activities, quicker decision-making and improvements to efficiency, service and quality. This charge was partly offset by a reversal of an impairment loss of USD 56 million, based on a change in the recoverable amount of the respective assets.

Business and asset disposal

The sale of Immobrew SA/NV (a subsidiary of AB InBev Belgium that directly owned 824 pubs in Belgium and indirectly owned 245 pubs in the Netherlands) to Cofinimmo S.A. in October 2007 and the disposal of some dormant companies and assets held for sale resulted in a gain before taxes in our profit from operations of USD 537 million in 2007. The Cofinimmo S.A. transaction was structured to ensure that we retained a 10% interest in Immobrew SA/NV, which we account for as an associate, and that long-term operating lease agreements with renewal rights in respect of the properties owned by Immobrew SA/NV were simultaneously entered into between us and Immobrew SA/NV. We have not provided any guarantees to the acquirer as to the assets’ residual values (see note 6 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further details). The sale in 2006 of the Rolling Rock family of brands, Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH resulted in a net business disposal loss of USD 24 million.

Disputes

Profit from operations was positively affected by a net reversal of provisions for disputes of USD 33 million in 2007. The comparable reversal of provisions for disputes in 2006 was USD 80 million.

 

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Profit from Operations

The following table reflects changes in profit from operations across our business zones from the year ended 31 December 2006 to the year ended 31 December 2007:

 

     Year ended
31 December
2007
   Year ended
31 December
2006
   Change
     (USD million)    (%) (1)

North America

   718    571    25.7

Latin America North

   2,840    2,117    34.2

Latin America South

   440    274    60.6

Western Europe

   1,108    478    131.8

Central & Eastern Europe

   392    255    53.7

Asia Pacific

   227    179    26.8

Global Export & Holding Companies

   147    51    188.2
              

Total

   5,872    3,925    49.6
              

 

(1)

The percentage change reflects the improvement of results for the period as a result of the change in each item.

Our profit from operations increased to USD 5,872 million in 2007. This represented an increase of USD 1,947 million, or 49.6%, as compared to 2006.

 

   

Our 2007 profit from operations reflects a net increase of USD 42 million as compared to 2006 attributable to the aggregate impact of the full consolidation of Quinsa, the acquisitions of Lakeport, Cervejarias Cintra Ind. e Com. Ltda. and Fujian Sedrin Brewery Co., Ltd. and the sale of United Dutch Breweries BV, the Rolling Rock family of brands and the Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH businesses.

 

   

Our 2007 profit from operations also reflects a positive currency translation impact of USD 480 million.

 

   

Our 2007 profit from operations was impacted positively by USD 511 million in 2007 as a result of certain exceptional items, as compared to a negative impact of USD 118 million in 2006. See “—Exceptional Items” above for a description of the exceptional items in 2007 and 2006. These exceptional items mainly affected our Western Europe zone, where exceptional items increased profit from operations by USD 475 million in 2007 as compared to a decrease of USD 174 million in 2006.

See note 5 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further description of our 2007 and 2006 profit from operations by zone.

EBITDA, as defined

The following table reflects changes in EBITDA, as defined, across our business zones for the year ended 31 December 2007 as compared to 2006 EBITDA, as defined:

 

     Year ended
31 December
2007
    Year ended
31 December
2006
    Change
     (USD million)     (%) (1)

Profit

   4,167      2,667      56.2

Income tax expense

   888      666      33.3

Net finance cost

   818      593      37.9

Share of result of associates

   (1   (1   -
                

Profit from operations

   5,872      3,925      49.6

Depreciation, amortisation and impairment

   1,408      1,371      2.7
                

EBITDA, as defined

   7,280      5,296      37.5
                

 

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(1)

The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

See “—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined” for additional information on our definition and use of EBITDA, as defined.

Our EBITDA, as defined, increased to USD 7,280 million in 2007. This represented an increase of USD 1,984 million, or 37.5%, as compared to 2006 EBITDA, as defined.

 

   

Our 2007 EBITDA, as defined, reflects a net increase of USD 86 million as compared to 2006 attributable to the aggregate impact of the full consolidation of Quinsa, the acquisitions of Lakeport, Cervejarias Cintra Ind. e Com. Ltda. and Fujian Sedrin Brewery Co., Ltd. and the sale of United Dutch Breweries BV, the Rolling Rock family of brands, Immborew and the Dinkelacker-Schwaben Bräu GmbH & Co. KG and Hofbrauhaus Wolters GmbH businesses.

 

   

Our 2007 EBITDA, as defined, also reflects a positive currency translation impact of USD 576 million.

 

   

Our 2007 EBITDA, as defined, was impacted positively by USD 454 million in 2007 as a result of certain exceptional items, as compared to a negative impact of USD 17 million in 2006. In addition to the exceptional items for 2007 and 2006 described under “—Exceptional Items” above, the exceptional items impacting our EBITDA, as defined, included a USD 56 million reversal of an impairment loss in respect of restructuring charges in 2007 and net impairment losses of USD 101 million in respect of business and asset disposals in 2006. These exceptional items mainly affected our Western Europe zone, where exceptional items increased EBITDA, as defined, by USD 436 million in 2007 as compared to a decrease of USD 99 million in 2006.

See note 5 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further performance measures used by our management. Also see note 10 to our audited consolidated financial statement as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for additional information regarding the allocation of our depreciation, amortisation and impairment charges.

Net Finance Cost

Our net finance cost was USD 818 million in 2007, as compared to USD 593 million in 2006. The USD 225 million increase was primarily due to an increase in interest expense following the higher mix of Brazilian real interest-bearing liabilities in our 2007 average net debt in comparison to the mix in 2006 and the adoption of hedge accounting on certain AmBev bonds in 2007. See note 11 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further description of our finance income and finance costs.

Income Tax Expense

Our income tax expense increased to USD 888 million in 2007 (at an effective income tax rate of 17.6%) from USD 666 million in 2006 (at an effective tax rate of 20.0%). The decrease in the effective tax rate was mainly attributable to the fact that AmBev continues to benefit from the impact of interest on equity payments, by tax deductible goodwill from the merger between InBev Holding Brazil S.A. and AmBev in July 2005 and the acquisition of Quinsa in August 2006, by the positive impact of low taxed capital gains on the sale of real estate to Cofinimmo S.A. and by the recognition of a deferred tax asset on U.S. tax loss carry forward. Excluding the impact of this exceptional capital gain, other exceptional items and the recognition of the deferred tax asset in the United States, our effective tax rate in 2007 would have been 19.7%.

 

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Profit (Pre- and Post-Minorities)

Reported profit attributable to our equity holders was USD 3,005 million in 2007, up 69.8% year-over-year. Excluding the exceptional items described above, profit attributable to our equity holders in 2007 would have been USD 2,547 million as compared to USD 1,909 million in 2006. The increase in reported profit attributable to our equity holders was primarily due to the improvement in our profit from operations and the full consolidation of Quinsa since August 2006, which more than offset an increase in net finance costs and income taxes. Profit attributable to minority interests increased to USD 1,162 million in 2007 from USD 897 million in 2006. The increase of USD 265 million was mainly triggered by increased profit at AmBev, partly offset by a decrease of the minority stake following the execution of the AmBev share buyback programmes.

IMPACT OF CHANGES IN FOREIGN EXCHANGE RATES

Foreign exchange rates have a significant impact on our consolidated financial statements. The following table sets forth the percentage of our revenue realized by currency for the six months ended 30 June 2009 and 2008, and the years ended 31 December 2008, 2007 and 2006:

 

     Six months ended 30 June
(unaudited)
    Year ended 31 December
(audited)
 
         2009             2008           2008         2007         2006    

Brazilian reais

   16.7   33.8   30.7   32.2 %   30.0 %

Euro

   8.5   18.2   15.6   18.2   20.2

U.S. dollars

   47.3   1.3   9.8 %   1.4   3.6 %

Canadian dollars

   5.0   9.4   8.4 %   9.5 %   10.2 %

Russian ruble

   3.0   7.1   6.5   7.8   6.7

Great Britain pound sterling

   3.6   6.8   6.2 %   7.9   9.2 %

Argentinean peso

   3.2   5.0   4.9   4.5   3.6 %

Chinese yuan

   4.5   3.3   3.5   3.4   3.0

South Korean won

   1.6   3.3   3.0 %   3.7   3.7 %

During the six months ended 30 June 2009 and 2008:

 

   

The fluctuation of the foreign currency rates had a negative translation impact on our revenue of USD 2,186 million (as compared to a positive impact of USD 2,418 million during the six months ended 30 June 2008) and a negative translation impact on our profit from operations of USD 567 million (as compared to a positive impact of USD 632 million during the six months ended 30 June 2008).

 

   

The fluctuation of foreign currencies had a negative USD 352 million impact on our reported profit after tax (as compared to a positive impact of USD 456 million during the six months ended 30 June 2008), while the impact on our earnings base (profit attributable to our equity holders) was negative USD 204 million or USD (0.13) per share (as compared to a positive impact of USD 305 million, or USD 0.32 per share, during the six months ended 30 June 2008).

 

   

The foreign currency fluctuations had a USD 640 million impact on our net debt (increase of net debt) and a USD 1,465 million impact on our equity (increase of equity), as compared to a USD 529 million impact on our net debt (increase of net debt) and USD 891 million impact on our equity (increase of equity) during the first half of 2008.

As a result of the fluctuation of foreign exchange rates during the years ended 31 December 2008, 2007 and 2006:

 

   

We recorded a positive translation impact of USD 1,028 million on our 2008 revenue (as compared to a positive impact of USD 1,478 million in 2007 and a positive impact in 2006 of USD 695

 

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million) and a positive translation impact of USD 320 million on our 2008 profit from operations (as compared to a positive impact of USD 480 million in 2007 and a positive impact of USD 277 million in 2006);

 

   

Our 2008 reported profit (after tax) was positively affected by a USD 218 million translation impact (as compared to a positive translation impact in 2007 of USD 350 million and a positive translation impact in 2006 of USD 207 million), while the positive translation impact on our 2008 earnings per share base (profit attributable to our equity holders) was USD 122 million or USD 0.12 per share (as compared to USD 243 million or USD 0.25 per share in 2007 and USD 125 million or USD 0.13 per share in 2006); and

 

   

Our equity decreased by USD 3,866 million in 2008 as a result of translation impacts (as compared to increases of USD 1,981 million in 2007 and decreases of USD 1,159 million in 2006).

Following the Anheuser-Busch acquisition, a significantly greater portion of our assets and revenue is denominated in U.S. dollars as a result of the significant assets and revenue of Anheuser-Busch in the United States. As a result, effective 1 January 2009, we changed the presentation currency of our consolidated financial statements from the euro to the U.S. dollar and have restated our historical audited consolidated financial statements included in this Form F-4 from euros to U.S. dollars.

LIQUIDITY AND CAPITAL RESOURCES

General

Our primary sources of cash flow have historically been cash flows from operating activities, the issuance of debt, bank borrowings and the issuance of equity securities. Our material cash requirements have included the following:

 

   

Debt service;

 

   

Capital expenditures;

 

   

Investments in companies participating in the brewing, carbonated soft drinks and malting industries;

 

   

Increases in ownership of our subsidiaries or companies in which we hold equity investments;

 

   

Share buyback programmes; and

 

   

Payments of dividends and interest on shareholders’ equity.

We are of the opinion that our working capital, as an indicator of our ability to satisfy our short-term liabilities, is, based on our expected cash flow from operations for the coming 12 months, sufficient for the 12 months following the date of this Form F-4. Over the longer term, we believe that our cash flows from operating activities, available cash and cash equivalents and short-term investments, along with our derivative instruments and our access to borrowing facilities, will be sufficient to fund our capital expenditures, debt service and dividend payments going forward. As part of our cash flow management, we are restraining growth in capital expenditures by optimizing use of our existing brewery capacity and standardizing operational processes to make our capital investments more efficient. We are also attempting to improve operating cash flow through procurement initiatives designed to leverage economies of scale and improve terms of payment to suppliers.

 

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The Group’s equity attributable to our equity holders and minority interests amounted to USD 28.0 billion as at 30 June 2009 (USD 24.4 billion at 31 December 2008 and USD 21.9 billion at 31 December 2007) and the Group’s net debt amounted to USD 53.1 billion as at 30 June 2009 (USD 56.7 billion at 31 December 2008 and USD 7.5 billion at 31 December 2007). Our overriding objectives when managing capital resources are to safeguard the business as a going concern and to optimize our capital structure so as to maximize shareholder value while keeping the desired financial flexibility to execute strategic projects.

To finance the acquisition of Anheuser-Busch, we entered into a USD 45 billion senior debt facilities agreement (of which USD 44 billion was ultimately drawn) and a USD 9.8 billion bridge facility agreement. USD 1.0 billion under the senior facilities agreement remains undrawn and on 18 December 2008, we repaid the debt we had incurred under the bridge facility agreement with the net proceeds of a rights offering and cash proceeds received by us from pre-hedging the foreign exchange rate between the euro and the U.S. dollar in connection with the rights offering.

We intend to continue to reduce our aggregate financial indebtedness through a combination of strong operating cash flow generation, asset disposals and a short-term reduction in dividend payments. We have repaid a portion of the debt incurred under the senior debt facilities agreement as described under “—Net debt and Equity” below, and we intend to actively manage the maturity profile of our remaining indebtedness by refinancing borrowings under the senior facilities agreement through capital markets issuances. Of the USD 45 billion senior debt facilities agreement, USD 19 billion was originally scheduled to mature in one year, USD 13 billion in three years, and the remainder in five years. Shortly after the Anheuser-Busch acquisition, as of 31 December 2008, the amount of outstanding unsecured bank loans payable by us in less than 12 months was $12.8 billion. After the $4.7 billion cash flow available to pay down debt generated in the first six months of 2009 and total bond refinancing of $13 billion, as of 30 June 2009, the amount of outstanding unsecured bank loans payable by us in less than 12 months has been reduced to $3.8 billion. See “—Contractual Obligations and Contingencies—Contractual Obligations”.

Following the Anheuser-Busch acquisition and the resulting increased leverage, the AB InBev Group has publicly stated an objective to achieve asset disposals aggregating approximately USD 7 billion. As of 30 June 2009, pursuant to our disposal program, we had entered into agreements for the sale of the 27% stake in Tsingtao (USD 901 million), of Oriental Breweries (USD 1.8 billion), of four metal beverage can and lid manufacturing plants from our U.S. metal packaging subsidiary (USD 577 million) and of the Labatt USA distribution rights.

Our ability to manage the maturity profile of our debt and repay our outstanding indebtedness in line with management plans will nevertheless depend upon market conditions. If such unfavourable market conditions as have been experienced in the past twelve months continue or worsen, our costs could increase beyond what is currently anticipated. Such costs could have a material adverse impact on our cash flows, results of operations or both. In addition, an inability to refinance all or a substantial amount of our debt obligations when they become due would have a material adverse effect on our financial condition and results of operations. See “Risk Factors—Risks Relating to the Anheuser-Busch Acquisition—We will face financial risks due to our increased level of debt and challenging market conditions.”

Our cash and cash equivalents less bank overdrafts as at 30 June 2009 amounted to USD 6,189 million. As of 30 June 2009, we had an aggregate of USD 321 million available to us under committed short-term credit facilities and an aggregate of USD 4,431 million available to us under committed long-term credit facilities. Although we may borrow such amounts to meet our liquidity needs, we principally rely on cash flows from operating activities to fund our continuing operations.

 

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Cash Flow

The following table sets forth our consolidated cash flows for the six months ended 30 June 2009 and 2008, and the years ended 31 December 2008, 2007 and 2006:

 

     Six months ended 30 June
(unaudited)
    Year ended 31 December
(audited)
 
         2009             2008         2008     2007     2006  
     (USD million)  

Cash flow from operating activities

   5,067      1,829      6,158     5,557     4,122  

Cash flow from investing activities

   157      (2,019   (55,503   (3,225   (4,365

Cash flow from financing activities

   (1,452   (330   49,879     (1,327   261  

Cash Flow from Operating Activities

Our cash flows from operating activities for the six months ended 30 June 2009 and 2008, and the years ended 31 December 2008, 2007 and 2006 were as follows:

 

     Six months ended 30 June
(unaudited)
    Year ended 31 December
(audited)
 
         2009             2008         2008     2007     2006  
     (USD million)  

Profit (including minority interests)

   2,343      1,766      3,126     4,167     2,667   

Interest, taxes and non-cash items included in profit

   4,059      1,748      4,809     2,920     2,858   
                              

Cash flow from operating activities before changes in working capital and provisions

   6,402      3,514      7,935     7,087     5,525   

Change in working capital (1)

   (45   (498   802     370     164   

Pension contributions and use of provisions

   (279   (206   (490   (496   (552

Interest, dividends, and taxes (paid)/received

   (1,011   (981   (2,089   (1,404   (1,015
                              

Cash flow from operating activities

   5,067      1,829      6,158     5,557     4,122   
                              

 

(1)

For purposes of the table above, working capital includes inventories, trade and other receivables and trade and other payables, both current and non-current.

Non-cash items included in profit include: depreciation, amortisation and impairments, including impairment losses on receivables and inventories; additions and reversals in provisions and employee benefits; losses and gains on sales of property, plant and equipment, intangible assets, subsidiaries and assets held for sale; equity share-based payment expenses; share of result of associates; net finance cost; income tax expense and other non-cash items included in profit. Please refer to our consolidated financial statements included in this Form F-4 for a more comprehensive overview of our cash flow from operating activities.

Our primary source of cash flow for our ongoing activities and operations is our cash flow from operating activities. For extraordinary transactions (such as the Anheuser-Busch acquisition), we may, from time to time, also rely on cash flows from other sources. See “—Cash Flow from Financing Activities”, below.

Net cash from operating activities for the six months ended 30 June 2009 increased by USD 3,238 million, as compared to the six months ended 30 June 2008. The improvement was the combined result of higher profit following the Anheuser-Busch acquisition and improved working capital management. We devote substantial efforts to the more efficient use of our working capital especially those elements of our working capital that are perceived as ‘core’ (including trade receivables, inventories and trade payables). The initiatives to improve our working capital include the implementation of best practices on collection of receivables and inventory management, such as optimising our inventory levels per stock taking unit, improving the batch sizes

 

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in our production process and optimising the duration of overhauls. Similarly, we aim to efficiently manage our payables by reviewing our standard terms and conditions on payments and resolving, where appropriate, the terms of payment within 120 days upon receipt of invoice. The negative USD 45 million change in working capital includes a USD 357 million cash outflow from derivatives. Excluding the impact of derivatives, the change in working capital would have resulted in a positive USD 312 million cash impact.

Net cash from operating activities increased by USD 601 million, or 10.8%, in the year ended 31 December 2008 as compared to the comparable period in 2007. The increase in the year ended 31 December 2008 was primarily the result of our devotion of substantial efforts to the more efficient use of our working capital, especially those elements of working capital that are perceived as ‘core’. The resulting changes in working capital had a USD 802 million cash positive flow impact in 2008. This improvement was partially the result of outstanding consideration payable to former Anheuser-Busch shareholders who did not claim the proceeds by year end 2008. Excluding this payable, the change in working capital would have resulted in a USD 302 million positive cash impact despite an increase in inventories by USD 388 million in 2008 as compared to year-end 2007 due to higher prices of raw materials (particularly malt). The improvement in working capital was partially offset by higher taxes and interest paid in 2008 as compared to 2007.

In 2007, the increase in net cash from operating activities amounted to an additional USD 1,435 million, or 34.8%, as compared to 2006. The improvement was the combined result of higher profit and improved working capital management.

Cash Flow from Investing Activities

Our cash flows from investing activities for the six months ended 30 June 2009, and the years ended 31 December 2008, 2007 and 2006 were as follows:

 

    Six months ended 30 June
(unaudited)
    Year ended 31 December
(audited)
 
        2009             2008         2008     2007     2006  
    (USD million)  

Net capital expenditure (1)

  (508   (1,074   (2,424   (1,969   (1,528

Net acquisition of subsidiaries and associates, net of cash acquired/disposed of, and purchase of minority interests

  368      (918   (53,044   (1,259   (2,844

Other

  297      (27   (35   3     7  
                             

Cash flow from (used in) investing activities

  157      (2,019   (55,503   (3,225   (4,365
                             

 

(1)

Net capital expenditure consists of acquisitions of plant, property and equipment and of intangible assets, minus proceeds from sale.

Net cash from investing activities increased to USD 157 million for the six months ended 30 June 2009 as compared to USD 2,019 million of cash used in investing activities during the six months ended 30 June 2008. This was mainly due to lower cash expenditures on purchases of minority interests and, especially, property, plant and equipment in the first half of 2009 than in the same period last year. This development was partially offset by our payment of USD 529 million in the first six months of 2009 on acquiring businesses as compared to USD 76 million during the same period last year. Of the cash used to acquire businesses during the first half of 2009, USD 508 million represented the settlement of outstanding consideration payable to former Anheuser-Busch shareholders who had not claimed the proceeds by year-end 2008, as well as the settlement of transaction costs related to the Anheuser-Busch acquisition. Further details on the acquisition of new businesses are disclosed in note 6 to our consolidated interim financial statements as of 30 June 2009, and for the six-month periods ended 30 June 2009 and 2008. Furthermore, as a result of the sale of our 27% economic interest in Tsingtao in the first half of 2009, proceeds from the sale of associates increased compared to the same period last year.

 

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Acquisition of subsidiaries, net of cash acquired, the purchase of minority interests and the acquisition of plant, property and equipment accounted for our most significant cash outlays in each of the three years ending 31 December 2008, 2007 and 2006.

The evolution of the cash used in investment activities from USD 3,225 million in 2007 to USD 55,503 million in 2008 is mainly explained by the Anheuser-Busch acquisition for which the net cash used amounted to USD 52,158 million. Further details on the Anheuser-Busch acquisition are disclosed in note 6 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 and under “Business Description—Material Contracts—The Merger Agreement”.

Net cash used in investment activities decreased to USD 3,225 million in 2007 as compared to USD 4,365 million in 2006. This was mainly due to the proceeds from the sale of Immobrew SA/NV in 2007, a decrease in expenditure on acquisitions in 2007, partly offset by higher purchases of minority interests through the AmBev share buyback programmes.

Cash Flow from Financing Activities

Our cash flows from financing activities for the six months ended 30 June 2009 and 2008, and the years ended 31 December 2008, 2007 and 2006 were as follows:

 

     Six months ended 30 June
(unaudited)
    Year ended 31 December
(audited)
 
         2009             2008         2008     2007     2006  
     (USD million)  

Net proceeds from the issue of share capital

   33      36      9,764      115      103   

Net purchase of treasury shares

   -      (1,080   (797   (821   (74

Proceeds from borrowings

   10,598      8,083      56,425      8,950      8,064   

Payments on borrowings

   (11,540   (4,902   (11,953   (8,449   (6,960

Cash net financing costs other than interests

   132      (251   (632   (60   (94

Payment of finance lease liabilities

   (2   (4   (6   (10   (4

Dividends paid

   (673   (2,212   (2,922 ) (1)     (1,052   (774
                              

Cash flow from (used in) financing activities

   (1,452   (330   49,879      (1,327   261   
                              

 

(1)

Dividends paid in 2008 consist primarily of USD 1,983 million paid by Anheuser-Busch InBev SA/NV, USD 630 million paid by AmBev and USD 268 million paid by Anheuser-Busch.

Cash flows used in financing activities amounted to USD 1,452 million for the six months ended 30 June 2009, as compared to USD 330 million of cash flows used in financing activities for the six months ended 30 June 2008. The change was primarily due to higher payments on borrowings, reflecting principal repayments made during the six months ended 30 June 2009, the effects of which were partially offset by lower levels of purchases of treasury shares and lower dividends paid.

Cash flows from financing activities for the year ended 31 December 2008 amounted to USD 49,879 million, compared to cash flows used in financing activities of USD 1,327 million for the year ended 31 December 2007. The change was primarily due to an increase in the net proceeds from the issue of share capital in the amount of USD 9,764 million pursuant to a rights offering that was completed in December 2008 and an increase in proceeds from borrowings, related to the senior debt facility entered into to finance a part of the Anheuser-Busch acquisition. Proceeds of the rights offering were used to repay debt incurred under the bridge facility used to finance a part of the Anheuser-Busch acquisition.

Cash flows used in financing activities for the year ended 31 December 2007 amounted to USD 1,327 million compared to cash flows provided by financing activities of USD 261 million for the year ended 31 December 2006. This was principally due to higher share buybacks, debt repayments and dividend payments during the year.

 

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Transfers from Subsidiaries

The amount of dividends payable by our operating subsidiaries to us is subject to, among other restrictions, general limitations imposed by the corporate laws, capital transfer restrictions and exchange control restrictions of the respective jurisdictions where those subsidiaries are organised and operate. For example, in Brazil, which accounted for 28% of our actual reported profit from operations for the six months ended 30 June 2009, current legislation permits the Brazilian government to impose temporary restrictions on remittances of foreign capital abroad in the event of a serious imbalance or an anticipated serious imbalance of Brazil’s balance of payments. For approximately six months in 1989 and early 1990, the Brazilian government froze all dividend and capital repatriations held by the Central Bank that were owed to foreign equity investors in order to conserve Brazil’s foreign currency reserves.

Dividends paid to us by certain of our subsidiaries are also subject to withholding taxes. Withholding tax, if applicable, generally does not exceed 10%.

Capital transfer restrictions are also common in certain emerging market countries, and may affect our flexibility in implementing a capital structure we believe to be efficient. For example, China has very specific approval regulations for all capital transfers to or from the country and certain capital transfers to and from the Ukraine are subject to obtaining a specific permit.

Funding Sources

Funding Policies

We aim to secure committed credit lines with financial institutions to cover our liquidity risk on a 12-month and 24-month basis. Liquidity risk is identified using both the budget and strategic planning process input of the AB InBev Group on a consolidated basis. Depending on market circumstances and the availability of local (debt) capital markets, we may decide, based on liquidity forecasts, to secure funding on a medium- and long-term basis.

We also seek to continuously optimise our capital structure with a view to maximising shareholder value while keeping desired financial flexibility to execute strategic projects. Our capital structure policy and framework aims to optimise shareholder value through tax efficient maximisation of cash flow distribution to us from our subsidiaries, while maintaining an investment-grade rating and minimising cash and investments with a return below our weighted average cost of capital.

Cash and Cash Equivalents

Our cash and cash equivalents less bank overdrafts for the six months ended 30 June 2009, and the years ended 31 December 2008, 2007 and 2006 were as follows:

 

     Six months ended 30 June
(unaudited)
   Year ended 31 December
(audited)
     2009    2008    2007    2006
     (USD million)

Total

   6,189    2,171    1,831    705
                   

For operational purposes, we hold cash and cash equivalents in the functional currencies of our operating companies. However, based on our most significant regions of operation, as of 30 June 2009, a significant amount of our cash and cash equivalents were held in the U.S. dollar (57.9% of total cash and cash equivalents), the real (17.9% of total cash and cash equivalents) and the euro (8.2% of total cash and cash equivalents). As of 31 December 2008, 34% of our cash and cash equivalents were held in the U.S. dollar, 31% were held in the real and 18% were held in the euro.

 

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Borrowings

Pursuant to the long- and short-term financing commitments in the amount of USD 54.8 billion that we obtained in connection with the Anheuser-Busch acquisition, we drew down USD 53.8 billion for the closing of the acquisition, which significantly increased our level of indebtedness on a consolidated basis. For further information regarding our financing commitments in connection with the Acquisition, see “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”.

All of the USD 54.8 billion financing commitments entered into by us in connection with the Anheuser-Busch acquisition bear interest at variable rates, and, except as described below, we will be exposed to interest rate risk on any amounts utilised under these commitments. As of 30 June 2009, USD 31.4 billion of the financing commitments entered into by us under the variable rate senior debt facilities in connection with the Anheuser-Busch acquisition remained outstanding. In accordance with our dynamic interest rate hedging approach (see “—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments—Interest Rate Risk”), we have entered into hedging arrangements with respect to a substantial portion of the amounts borrowed under these financing commitments for an initial three-year period. At the time of the Anheuser-Busch acquisition, the interest rate for an amount of up to USD 34.5 billion of the financing commitments had effectively been fixed at 3.875% per annum (plus applicable fixed spreads) for the period from 2009 to 2011. Since then, a portion of the hedging arrangement has been extended for an additional two-year period, and other amounts have been repaid.

These hedging arrangements include a series of forward U.S. dollar LIBOR fixed interest-rate swaps. As a result, effective from January 2009, the interest rates for an amount of up to USD 29.5 billion (under the USD 45 billion senior debt facilities agreement we entered into to finance the Anheuser-Busch acquisition) have effectively been fixed. The interest rate for USD 25 billion from Facilities C and D of these senior debt facilities has been fixed at a weighted average rate of 4.038% per annum (plus applicable fixed spreads) and the interest rate for USD 4.5 billion has been fixed as a pre-hedge of potential debt capital market issuance at 3.507% per annum (plus applicable fixed spreads), in each case for the period from 2009 to 2011. In addition, with respect to an amount of up to USD 7.4 billion of the USD 29.5 billion, the interest rates applicable during the subsequent period, from 2011 to 2013, have effectively been fixed at 2.85% per annum, plus applicable fixed spreads. These and other hedging arrangements we have entered into resulted in an increase in our trade and other payables for the period ended 30 June 2009.

Our borrowings are linked to different interest rates, both variable and fixed. As of 30 June 2009, after certain hedging and fair value adjustments, USD 11.0 billion, or 18.49%, of our interest-bearing financial liabilities (which include loans, borrowings and bank overdrafts) bore a variable interest rate, while USD 48.7 billion, or 81.51%, bore a fixed interest rate.

The senior facilities agreement requires us to abide by a specified interest cover ratio and leverage ratio which is tested semi-annually for the 12-month test period ending on the test date, beginning on 30 June 2009. The initial required interest cover ratio (which is the ratio of EBITDA, calculated in accordance with the senior facilities agreement, to net interest expense on a consolidated basis) is 2.5:1 and is stepped up incrementally during the term of the agreement to 3.0:1. The initial required leverage ratio (which is the ratio of total net debt to EBITDA, each calculated in accordance with the senior facilities agreement, on a consolidated basis) is 5.2:1 and is stepped down during the term of the agreement to 3.5:1.

The interest cover ratio is defined in the senior facilities agreement as the ratio of EBITDA to net interest expense in respect of any relevant period. EBITDA for purposes of the interest cover ratio under the senior facilities agreement is “EBITDA, as defined” adjusted for exceptional items, dividends or other profit distributions received in cash of non-consolidated entities, gains or losses of non-financial assets. For our definition of EBITDA, as defined see “—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”. This measure of EBITDA reached USD 10.793 million

 

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as of 30 June 2009. Net interest expense means, in respect of the AB InBev Group and in relation to any period, interest expenses (as reported for the preceding 12-month period) minus interest income (as reported for the preceding 12-month period) and reached USD 2.485 million as of 30 June 2009. The interest coverage ratio as of 30 June 2009 was 4.34.

The leverage ratio is defined in the senior facilities agreement as the total net debt at the last day of the relevant period divided by the EBITDA for that period. Net debt for purposes of the leverage ratio under the senior facilities agreement is financial indebtedness excluding obligations owned under or in respect of shareholders’ equity, deductions made of cash, cash equivalent investments and judicial deposits and was USD 52.955 million as of 30 June 2009. EBITDA for purposes of the leverage ratio calculation under the senior facilities agreement bears the same definition as that used in the interest cover ratio, further adjusted to add or subtract on a pro-forma basis over the preceding 12-month period the results of any entities or businesses acquired or sold during that period. This measure of EBITDA was USD 12.737 million as of 30 June 2009. The leverage ratio as of 30 June 2009 was 4.16.

Failure to comply with the covenants in the senior debt facility we entered into in connection with the Anheuser-Busch acquisition could have significant consequences on our financial condition and liquidity. Such non-compliance is an event of default under the facility and our lenders would have the right to accelerate the maturity of that debt. Such event of default may trigger cross-default clauses under other debt we have incurred resulting in further harm to our financial condition and liquidity. Conversely, compliance with the covenants in the senior debt facility may limit our operating flexibility, including by limiting our ability to engage in future acquisitions or development activities or to otherwise realise the value of our assets and opportunities fully because of the need to comply with the covenants. See “Risk Factors—Risks Relating to the Anheuser-Busch Acquisition—We will face financial risks due to our increased level of debt and challenging market conditions.”

Further, upon the completion of the acquisition, Anheuser-Busch became part of our consolidated group and its outstanding indebtedness became part of our consolidated liabilities. Anheuser-Busch InBev SA/NV has also guaranteed the outstanding capital markets debt issued or guaranteed by Anheuser-Busch and may guarantee Anheuser-Busch’s obligations under any guarantee provided by Anheuser-Busch of its subsidiaries’ other debt obligations. As of 30 June 2009, the Anheuser-Busch obligations guaranteed by Anheuser-Busch InBev SA/NV amounted to USD 7,488 million.

Most of our other interest-bearing loans and borrowings are for general corporate purposes, based upon strategic capital structure concerns, although certain borrowing is incurred to fund significant acquisitions of subsidiaries, such as the borrowings to fund the Anheuser-Busch acquisition. Although seasonal factors affect the business, they have little effect on our borrowing requirements.

On 8 December 2005, InBev (as borrower), Brandbrew S.A., Cobrew SA/NV and InBev Belgium (as borrowers and guarantors) entered into a EUR 2.5 billion revolving loan facility with, among others, ABN AMRO Bank N.V., Calyon, Citigroup Global Markets Ltd and ING Belgium NV/SA (as bookrunners), Fortis Bank SA/NV (as facility agent) and certain banks and financial institutions (as original lenders). This facility can be used for general corporate purposes, including but not limited to acquisitions and, without having an obligation to do so, refinancing indebtedness of the AB InBev Group. This facility contains customary representations and warranties, covenants and events of default and is unsecured. As of 30 June 2009, USD 1,477 million remains available to be drawn under this facility. The final maturity date of this facility is 8 December 2012.

We have also established a Belgian commercial paper programme under which Anheuser-Busch InBev SA/NV and Cobrew NV/SA may issue and have outstanding at any time commercial paper notes up to a maximum aggregate amount of EUR 1.0 billion (USD 1.4 billion) or its equivalent in alternative currencies. The proceeds from the issuance of any such notes may be used for general corporate purposes. The notes may be issued in two tranches: Tranche A has a maturity of not less than seven and not more than 364 days from and including the day of issue, Tranche B has a maturity of not less than one year. As of 30 June 2009, we had

 

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borrowed approximately USD 370.3 million under the programme. Our ability to borrow additional amounts under the programme is subject to investor demand. If we are ever unable to borrow under this commercial programme, we may borrow an additional amount, or refinance commercial paper as it becomes due, up to an amount of EUR 125 million (USD 174 million) under a committed special-purpose credit line or through the use of our other committed lines of credit.

Our net debt is denominated in various currencies, though primarily in the U.S. dollar, the euro, the Brazilian real and the Canadian dollar. Our policy is to have our subsidiaries incur debt in their functional currencies, through long-term or short-term borrowing arrangements, either directly in their functional currencies or indirectly through hedging arrangements, to the extent possible.

The currency of borrowing is driven by various factors in the different countries of operation, including a need to hedge against functional currency inflation, currency convertibility constraints, or restrictions imposed by exchange control or other regulations. In accordance with our policy aimed at achieving an optimal balance between cost of funding and volatility of financial results, we seek to match borrowing liabilities to functional currency cash flow, and may enter into certain financial instruments in order to mitigate currency risk. We have also entered into certain financial instruments in order to mitigate interest rate risks. For further details on our approach to hedging foreign currency and interest rate risk, see “—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments”.

We have substantially increased our U.S. dollar liabilities as a result of U.S. dollar amounts borrowed and assumed in connection with the Anheuser-Busch acquisition. Following the acquisition, we adopted a hybrid currency matching model pursuant to which we may (i) match net debt currency exposure to cash flows in such currency, measured on the basis of EBITDA, as defined, adjusted for exceptional items, by swapping a significant portion of U.S. dollar debt to other currencies, such as Brazilian real (with a higher coupon), although this would negatively impact our profit and earnings due to the higher Brazilian real interest coupon, and (ii) use Anheuser-Busch’s U.S. dollar cash flows to service interest payments under our debt obligations. See “—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments—Foreign Currency Risk” for further details of our hedging arrangements. For our definition of EBITDA, as defined, see “—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”.

We were in compliance with all our debt covenants as of 30 June 2009. For further details regarding our total current and non-current liabilities, please refer to note 16 of our unaudited consolidated financial statements for the half-year ended 30 June 2009, and note 25 of our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

The following table sets forth the level of our current and non-current interest-bearing loans and borrowings as of 30 June 2009, and as of 31 December 2008 and 2007:

 

     Six months ended 30 June
(unaudited)
   Year ended 31 December
(audited)
     2009        2008            2007    
     (USD million)

Secured bank loans

   318    108    546

Unsecured bank loans

   36,333    50,553    6,064

Unsecured bond issues

   22,627    8,432    2,875

Secured other loans

   6    7    0

Unsecured other loans

   208    173    237

Secured bank facilities

   -    -    6

Finance lease liabilities

   51    53    22
              

Total (1)

   59,543    59,326    9,750
              

 

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(1)

Total shown excludes USD 765 million of bank overdrafts in 2008 and USD 117 million in 2007.

The following table sets forth the contractual maturities of our interest-bearing liabilities as of 30 June 2009:

 

     Carrying
Amount (1)
   Less than
1 year
   1–2 years    2-3 years    3–5 years    More than
5 years
     (USD million)

Secured bank loans

   318    218    61    20    12    7

Unsecured bank loans

   36,333    2,599    5,814    13,573    14,172    175

Unsecured bond issues

   22,627    1,054    474    989    5,709    14,401

Secured other loans

   6    -    -    -    6    -

Unsecured other loans

   208    4    26    91    22    65

Finance lease liabilities

   51    5    5    4    2    35
                             

Total (2)

   59,543    3,880    6,380    14,677    19,923    14,683
                             

 

(1)

“Carrying Amounts” refers to net book value as recognised in the balance sheet as per 30 June 2009.

 

(2)

Total shown excludes USD 150 million of bank overdrafts as of 30 June 2009.

The following table sets forth the contractual maturities of our interest-bearing liabilities as of 31 December 2008:

 

     Carrying
Amount (1)
   Less than
1 year
   1–3 years    3–5 years    More than
5 years
     (USD million)

Secured bank loans

   108    51    27    31    -

Unsecured bank loans

   50,553    10,723    25,444    14,261    125

Unsecured bond issues

   8,432    520    1,640    1,307    4,964

Secured other loans

   7    -    2    4    1

Unsecured other loans

   173    4    66    64    40

Finance lease liabilities

   53    4    9    4    35
                        

Total (2)

   59,326    11,302    27,188    15,671    5,165
                        

 

(1)

“Carrying Amounts” refers to net book value as recognised in the balance sheet as per 31 December 2008.

 

(2)

Total shown excludes USD 765 million of bank overdrafts in 2008.

Please refer to note 30(c) of our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for a description of the currencies of our financial liabilities and a description of the financial instruments we use to hedge our liabilities.

Credit Rating

Our credit rating from Standard and Poor’s is BBB+ for long-term obligations and A-2 for short-term obligations, and our credit rating from Moody’s Investors Service is Baa2 for long-term obligations. Credit ratings may be changed, suspended or withdrawn at any time and are not a recommendation to buy, hold or sell any of our or our subsidiaries’ securities.

Capital Expenditures

We spent USD 508 million (net of proceeds from the sale of property, plant, equipment and intangible assets) during the six months ended 30 June 2009 on acquiring capital assets. Of this amount, approximately 72% was used to improve our production facilities, while 18% was used for logistics and commercial investments. Approximately 10% was used for improving administrative capabilities and purchase of hardware and software.

 

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We spent USD 2,424 million in 2008 on acquiring capital assets. In 2008, out of the total capital expenditures, approximately 66% was used to improve our production facilities, while 24% was used for logistics and commercial investments. Approximately 10% was used for improving administrative capabilities and purchase of hardware and software.

We spent USD 1,969 million during 2007 on acquiring capital assets. Of our total capital expenditures in 2007, approximately 67% was used to improve our production facilities, 22% was used for logistics and commercial investments and approximately 11% was used for improving administrative capabilities and purchase of hardware and software.

We spent USD 1,528 million during 2006 on acquiring capital assets. Of our total capital expenditures in 2006, approximately 63% was used to improve our production facilities, 26% was used for logistics and commercial investments and approximately 11% was used for improving administrative capabilities and purchase of hardware and software.

Investments

We acquired the Budweiser distribution rights in Paraguay for an amount of USD 24 million in April 2009 and we bought a Pepsi bottler in Bolivia for USD 27 million in March 2009.

During the first half of 2009, we also disposed of certain of our businesses. The three main disposals were the sales of InBev USA (also doing business under the name Labatt USA) and our interest in Tsingtao and Oriental Brewery.

 

   

On 13 March 2009, we announced that we had completed the sale of InBev USA, the exclusive importer of Labatt branded beer in the U.S., to an affiliate of KPS Capital Partners, LP to satisfy requirements imposed by the U.S. Department of Justice in connection with its clearance of our acquisition of Anheuser-Busch.

 

   

On 30 April 2009, we announced that we had completed the sale of 19.9% of Tsingtao to Asahi Breweries, Ltd. for USD 667 million. We used the net proceeds from this divestiture to repay part of the senior debt facilities we incurred to finance the Anheuser-Busch acquisition. On 8 May 2009, we announced that we had entered into an agreement with a private investor, Mr. Chen Fashu, to sell our remaining 7% stake in Tsingtao for USD 235 million. The sale was completed on 5 June 2009.

 

   

On 24 July 2009, we completed the previously announced sale of Oriental Brewery, South Korea’s second largest brewery, to an affiliate of KRR for USD 1.8 billion (equivalent to approximately KRW 2.3 trillion converted at the then-current spot rate of 1272.6 KRW per USD), which resulted in USD 1.5 billion of cash proceeds at closing. We expect to continue our relationship with Oriental Brewery through the exchange of best practices, by granting Oriental Brewery exclusive licenses to distribute certain brands in South Korea including Budweiser, Bud Ice and Hoegaarden, and by having an ongoing interest in Oriental Brewery through an agreed earn-out. In addition, we will have the right, but not the obligation, to re-acquire Oriental Brewery five years after the closing of the transaction based on predetermined financial terms. The divestiture of Oriental Brewery is part of our ongoing deleveraging programme and allows us to repay debt incurred as a result of the Anheuser-Busch acquisition. We expect the impact on recurring results to be immaterial.

In 2008, our expenditures on acquiring businesses were largely the result of the Anheuser-Busch acquisition, for which the total amount of funds required was approximately USD 54.8 billion and for which we recognised goodwill of USD 32.2 billion provisionally allocated primarily to our U.S. business on the basis of expected synergies. Aside from this acquisition, we spent USD 946 million during the course of 2008 on acquisitions of businesses and purchases of minority interests. We reached an agreement to purchase the Cintra

 

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brands in January 2008 and subsequently sold the Cintra brands at net carrying value in May 2008. We also acquired several local distributors throughout the world during 2008. These distributors were immediately integrated in our operations and goodwill on these transactions amounted to USD 85 million. We also received a USD 47 million cash inflow for the disposal of certain wholesalers in Western Europe and the partial collection of the remaining receivable from the sale of Immobrew in 2007. Our purchases of minority interests principally related to AmBev (through share buyback programmes), Zhejiang Shiliang Brewery Co., Ltd. and Quinsa. As a result of a share buy-back programme of AmBev shares during 2008, our percentage interest in AmBev increased from 61.01% to 61.75%. Other purchases of minority interests related to the buy-out of InBev Shiliang (Zhejiang) Brewery and to the closing of AmBev’s tender offer for Quinsa shares, resulting in an increase of AmBev’s economic interest in Quinsa to 99.83%. The total cash consideration for these purchases of minority interests amounted to USD 853 million, including USD 342 million for the repurchase of shares by AmBev. As the related subsidiaries were already fully consolidated, the purchases did not impact our profit, but reduced the minority interests and thus impacted the profit attributable to our equity holders.

During the course of 2007, we spent USD 1,836 million on acquisitions of businesses and purchases of minority interests. In 2007, our expenditures on acquiring businesses were largely the result of the acquisition of Lakeport (for an aggregate purchase price of just over CAD 201.4 million), Goldensand Comercio e Serviços Lda, the controlling shareholder of Cervejarias Cintra Ind. e Com. Ltda. (for a total transaction value of approximately USD 150 million), and several local distributors, while our purchases of minority interests principally related to the AmBev share buyback programmes (whereby 25.6 million AmBev shares were acquired for an amount of USD 1,544 million) and our share buyback programme under which we acquired 10.3 million of our shares for an amount of USD 821 million.

During the course of 2006, we spent USD 2,847 million on acquisitions of businesses and purchases of minority interests. Our expenditure on acquiring businesses in 2006 was principally directed towards the acquisition of Fujian Sedrin Brewery Co., Ltd. (for a total cash consideration of RMB 5,886 million, which was settled in U.S. dollars for USD 779 million) and the acquisition (through AmBev) of all Beverage Associates Corp.’s remaining shares in Quinsa (for a total purchase price of USD 1,237 million).

Net Debt and Equity

We define net debt as non-current and current interest-bearing loans and borrowings and bank overdrafts minus debt securities and cash. Net debt is a financial performance indicator that is used by our management to highlight changes in our overall liquidity position. We believe that net debt is meaningful for investors as it is one of the primary measures our management uses when evaluating our progress towards deleveraging.

The following table provides a reconciliation of our net debt to the sum of current and non-current interest bearing loans and borrowings as of the dates indicated:

 

         30 June (unaudited)         31 December (audited)  
     2009             2008                 2007      
     (USD million)  

Non-current interest bearing loans & borrowings

   55,663      48,025      7,633   

Current interest bearing loans & borrowings

   3,880      11,301      2,117   
                  
   59,543      59,326      9,750   

Bank overdrafts

   150      765      117   

Cash & cash equivalents

   (6,339   (2,936   (1,949

Interest bearing loans granted (included within Trade and other receivables)

   (91   (97   (31

Debt securities (included within Investment securities)

   (127   (397   (391
                  

Total net debt

   53,136      56,661      7,497   
                  

 

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Our net debt decreased to USD 53,136 million as of 30 June 2009, from USD 56,661 million as of 31 December 2008. Apart from operating results net of capital expenditures, our net debt was impacted by dividend payments to our shareholders (USD 559 million), dividend payments to minority shareholders of AmBev (USD 94 million), the payment of previously unclaimed consideration to former Anheuser-Busch shareholders and the payment of other transaction costs associated with our acquisition (USD 508 million), offset by the net proceeds from the sale of our interest in Tsingtao (USD 901 million) and the impact of changes in foreign exchange rates (USD 640 million).

Our net debt increased to USD 56,661 million as of 31 December 2008, from USD 7,497 million as of 31 December 2007. Apart from operating results net of capital expenditures, our net debt was impacted by the net proceeds from the issue of share capital (USD 9,764 million), offset by the acquisition of Anheuser-Busch and other business combinations (USD 52,251 million); our share buy-back programme (USD 1,044 million) and AmBev’s share buy-back programme (USD 342 million); the purchase of minority interests of Quinsa and Zheijang Shiliang (USD 432 million and USD 79 million, respectively); dividend payments (USD 2,922 million) and the impact of changes in foreign exchange rates.

Our net debt increased to USD 7,497 million as of 31 December 2007, from USD 7,326 million as of 31 December 2006. Our cash flow was positively impacted by higher cash flow from operating activities and lower cash flow from investments in 2007. Our net debt was decreased by the sale of real estate to Cofinimmo S.A. in Belgium and the Netherlands (USD 573 million in 2007), the sale of Dinkelacker-Schwaben Bräu GmbH & Co. KG (USD 30 million) and the impact of changes in foreign exchange rates, which, together with the impact of operating results net of capital expenditures, more than offset the increase in our net debt as a result of the acquisition of Lakeport Brewing Income Fund, Cervejarias Cintra Ind. e Com. Ltda. and certain Brazilian distributors (USD 260 million), our share buyback programme (USD 820 million), the AmBev share buyback programme (USD 1,544 million) and dividend payments (USD 1,052 million).

Consolidated equity attributable to our equity holders as at 30 June 2009 was USD 25,586 million, compared to USD 22,442 million at the end of 2008. The combined effect of the strengthening of the Brazilian real, the Canadian dollar, the euro, the Pound sterling, the Mexican peso, the South Korean won and the Ukrainian hryvnia and the weakening of the Argentinean peso, the Chinese yuan and the Russian ruble resulted in a positive foreign exchange translation adjustment of USD 1,320 million. Further details on equity movements can be found in our consolidated interim statement of changes in equity in our consolidated interim financial statements as of 30 June 2009, and for the six-month periods ended 30 June 2009 and 2008.

Consolidated equity attributable to our equity holders as at 31 December 2008 was USD 22,442 million, compared to USD 20,057 million at the end of 2007 primarily reflecting the capital increase as a result of the rights offering we completed in December 2008, which was partially offset by foreign exchange translation adjustments. The movement of the foreign exchange translation adjustment of USD 3.866 million is primarily the effect of the weakening of the closing rates of the Mexican peso, the Brazilian real, the Pound sterling, the Russian ruble, the South Korean won, the Ukrainian hryvnia and the Canadian dollar. Further details on equity movements can be found in note 23 to our audited consolidated financial statements as of, and for the year ended, 31 December 2008.

Consolidated equity attributable to our equity holders as at 31 December 2007 was USD 20,057 million, compared to USD 16,149 million at 31 December 2006, which included a positive foreign exchange translation adjustment of USD 1,985 million due mainly to the combined effect of the strengthening of the closing rates of the Brazilian real and the Canadian dollar and the weakening of the closing rates of the Argentinean peso, the Chinese yuan, the pound sterling, the Russian ruble, the South Korean won, and the Ukrainian hryvnia.

Note that further details on equity movements can be found in note 23 to our audited consolidated financial statements as of, and for the year ended, 31 December 2008.

 

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Acquisition of Anheuser-Busch

To finance the acquisition of Anheuser-Busch, we entered into a USD 45 billion senior debt facilities agreement (of which USD 44 billion was ultimately drawn) and a USD 9.8 billion bridge facility agreement, enabling us to consummate the acquisition, including the payment of USD 52.5 billion to shareholders of Anheuser-Busch, refinancing certain Anheuser-Busch indebtedness, payment of all transaction charges, fees and expenses and accrued but unpaid interest to be paid on Anheuser-Busch’s outstanding indebtedness, which together amounted to approximately USD 54.8 billion.

On 18 December 2008, we repaid the debt we had incurred under the bridge facility with the net proceeds of the rights offering and cash proceeds we received from pre-hedging the foreign exchange rate between the euro and the U.S. dollar in connection with the rights offering. The rights offering is described further below under “—Rights Offering”.

As of 30 June 2009, the amounts outstanding under our financing commitments under our USD 45 billion variable rate senior debt facilities entered into in connection with the Anheuser-Busch acquisition had been reduced to USD 31.4 billion.

The costs of the Anheuser-Busch acquisition totalled approximately USD 1.2 billion, of which USD 0.3 billion were allocated to goodwill, USD 0.1 billion related to the capital increase and USD 0.1 billion related to the senior and equity bridge facilities, commitment fees and equity bridge facility arrangement fees and are reported in the 2008 income statement and USD 0.7 billion related to the senior debt facility arrangement fees and will be taken in the income statement as an accretion expense over the remaining life time of the financing using the effective interest rate method.

January Notes Offering

On 12 January 2009, we issued three series of notes in an aggregate principal amount of USD 5.0 billion, consisting of USD 1.25 billion aggregate principal amount of notes due 2014 (the “ January 2014 Notes ”), USD 2.5 billion aggregate principal amount of notes due 2019 (the “ January 2019 Notes ”) and USD 1.25 billion aggregate principal amount of notes due 2039 (the “ January 2039 Notes ”, and together with the January 2014 Notes and the January 2019 Notes, the “ January Notes ”). The January 2014 Notes, January 2019 Notes and January 2039 Notes bear interest at a rate of 7.20%, 7.75% and 8.20%, respectively. The net proceeds from the January Notes offering were used to repay USD 3.5 billion of the Facility B loan and USD 1.5 billion of the Facility A loan, both of which comprise part of the senior debt facilities agreement and which are described under “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”.

Euro MTN Notes Offerings

In the first half of 2009, we completed the issuance of eight series of notes, consisting of EUR 750 million aggregate principal amount of notes due 2013 (the “ 2013 Euro Notes ”), EUR 750 million aggregate principal amount of notes due 2014 (the “ 2014 Euro Notes ”), EUR 600 million aggregate principal amount of notes due 2017 (the “ 2017 Euro Notes ”), EUR 50 million aggregate principal amount of notes due 2014 (the “ 2014 FRN Notes ”), GBP 550 million aggregate principal amount of notes due 2024 (the “ 2024 GBP Notes ”), Swiss Franc (CHF) 600 million aggregate principal amount notes due 2014 (the “ 2014 CHF Notes ”), EUR 250 million aggregate principal amount of notes due June 2015 (the “ 2015 EUR Notes ”) and GBP 750 million aggregate principal amount of notes due June 2017 (the “ 2017 GBP Notes ” and together with the 2013 Euro Notes, the 2014 Euro Notes, the 2017 Euro Notes, the 2014 FRN Notes, the 2024 GBP Notes, the 2014 CHF Notes and the 2015 EUR Notes, the “ Euro MTN Notes ”). The 2013 Euro Notes, 2014 Euro Notes, 2017 Euro Notes, 2014 FRN Notes, 2024 GBP Notes 2014 CHF Notes, 2015 EUR Notes and the 2017 GBP Notes bear interest at a rate of 7.375%, 6.57%, 8.625%, 9.75%, 4.5%, 5.75% and 6.5%, respectively. The 2014 FRN Notes bear interest at a floating rate of 3 month EURIBOR plus 3.90%. The net proceeds from the 2013 Euro Notes, 2014 Euro Notes, 2017 Euro Notes, 2014 FRN Notes, 2024 GBP Notes and 2014 CHF Notes, as of

 

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30 June 2009 were used to repay approximately USD 2.447 billion of the Facility A loan and approximately USD 1.1 billion of other short term indebtedness. For a description of the Facility A loan, see “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”.

May Notes Offering

On 14 May 2009, we issued three series of notes in an aggregate principal amount of USD 3.0 billion, consisting of USD 1.55 billion aggregate principal amount of notes due 2014 (the “May 2014 Notes”), USD 1.0 billion aggregate principal amount of notes due 2019 (the “May 2019 Notes”) and USD 0.450 billion aggregate principal amount of notes due 2039 (the “May 2039 Notes”, and together with the May 2014 Notes and the May 2019 Notes, the “May Notes”). The May 2014 Notes, May 2019 Notes and May 2039 Notes bear interest at a rate of 5.375%, 6.875% and 8.0%, respectively. The net proceeds from the May Notes offering were used to repay USD 2.977 billion of the Facility A loan, which comprises part of the senior debt facilities agreement and which are described under “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”.

Rights Offering

On 24 November 2008, we commenced an offering to existing shareholders of new shares without nominal value, each with a VVPR strip. The purpose of this share capital increase and offering of new shares was to refinance part of the bridge facility agreement upon which we drew in order to finance part of the consideration paid to shareholders of Anheuser-Busch in connection with the acquisition. Settlement of the rights offering occurred on 16 December 2008, with 986,109,272 new shares issued in exchange for an aggregate consideration of EUR 6.36 billion. Our new shares issued were of the same class as the previously existing shares and started trading on the regulated market of Euronext Brussels on 16 December 2008.

Share Buy-Back Programmes

As a result of share buy-back programmes of 2008 we acquired 12.7 million of our shares for an amount of USD 1,044 million and AmBev acquired 5 million AmBev shares for an amount of USD 349 million. Since the second quarter of 2008, as part of our strategy to deleverage, we have reduced share buy-backs conducted by us and our subsidiaries.

CONTRACTUAL OBLIGATIONS AND CONTINGENCIES

Contractual Obligations

The following table reflects certain of our contractual obligations, and the effect such obligations are expected to have on our liquidity and cash flows in future periods, as at 30 June 2009:

 

           Payment Due By Period  

Contractual Obligations

   Contractual
cash flows (2)
    Less than
1 year
    1-3 years     3-5 years     More than
5 years
 
     (USD million)  

Secured bank loans

   (357   (236   (93   (19   (9

Unsecured bank loans

   (40,805   (3,768   (21,454   (15,376   (207

Unsecured bond issues

   (42,229   (2,704   (4,569   (8,385   (26,571

Secured other loans

   (9   (1   (2   (6   -   

Unsecured other loans

   (220   (7   (127   (24   (62

Finance lease liabilities

   (128   (6   (19   (6   (97

Operating lease liabilities

   (2,271   (248   (406   (362   (1,255

Bank overdraft

   (150   (150   -      -      -   

Purchase commitments

   (3,229   (1,825   (1,294   (43   (67

Trade & other payables

   (9,147   (8,649   (400   (7   (91
                              

Total (1)

   (98,545   (17,594   (28,364   (24,228   (28,359
                              

 

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(1)

“Total” amounts refer to non-derivative financial liabilities including interest payments.

 

(2)

The loan and bond issue contractual cash flow amounts presented above differ from the carrying amounts for these items in our financial statements in that they include our best estimates of future interest payable (not yet accrued) in order to better reflect our future cash flow position.

The following table reflects certain of our contractual obligations, and the effect such obligations are expected to have on our liquidity and cash flows in future periods, as at 31 December 2008:

 

           Payment Due By Period  

Contractual Obligations

   Contractual
cash flows (2)
    Less than
1 year
    1-3 years     3-5 years     More than
5 years
 
     (USD million)  

Secured bank loans

   (138   (54   (39   (45   -   

Unsecured bank loans

   (56,306   (12,834   (27,123   (16,203   (146

Unsecured bond issues

   (16,414   (1,321   (2,770   (2,589   (9,734

Secured other loans

   (9   -      (3   (5   (1

Unsecured other loans

   (230   (19   (86   (74   (51

Finance lease liabilities

   (132   (8   (16   (9   (99

Operating lease liabilities

   (2,260   (217   (431   (369   (1,243

Bank overdraft

   (765   (765   -      -      -   

Purchase commitments

   (2,996   (2,037   (859   (40   (60

Trade & other payables

   (8,773   (8,370   (304   (25   (74
                              

Total (1)

   (88,023   (25,625   (31,631   (19,359   (11,408
                              

 

(1)

“Total” amounts refer to non-derivative financial liabilities including interest payments.

 

(2)

The loan and bond issue contractual cash flow amounts presented above differ from the carrying amounts for these items in our financial statements in that they include our best estimates of future interest payable (not yet accrued) in order to better reflect our future cash flow position.

Please refer to “—Liquidity and Capital Resources—Funding Sources—Borrowings” for further information regarding our short term borrowings and long-term debt.

Please refer to note 30 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, and in particular to the discussions therein on “Liquidity Risk”, for more information regarding the maturity of our contractual obligations, including interest payments and derivative financial assets and liabilities.

Please refer to note 31 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for more information regarding our operating lease obligations.

Information regarding our pension commitments and funding arrangements is described in our Significant Accounting Policies and in note 26 to our audited consolidated financial statements. The level of contributions to funded pension plans is determined according to the relevant legislation in each jurisdiction in which we operate. In some countries there are statutory minimum funding requirements while in others we have developed our own policies, sometimes in agreement with the local trustee bodies. The size and timing of contributions will usually depend upon the performance of investment markets. Depending on the country and plan in question the funding level will be monitored periodically and the contribution amount amended appropriately. Consequently it is not possible to predict with any certainty the amounts that might become payable from 2010 onwards. In 2008 our employer contributions to defined benefit and defined contribution pension plans amounted to US$224 million. Contributions to pension plans for 2009 are estimated to be around

 

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US$273 million. This increase is predominantly attributable acquisition of Anheuser-Busch. Please refer to note 26 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further information on our employee benefit obligations.

Collateral and Contractual Commitments

The following table reflects our collateral and contractual commitments for the acquisition of property, plant and equipment, loans to customers and other, as of 30 June 2009, and as of 31 December 2008, 2007 and 2006:

 

     Six months ended
30 June (unaudited)
   Year ended 31 December
(audited)
     2009    2008    2007    2006
     (USD million)

Collateral given for own liabilities

   506    561    642    533

Collateral and financial guarantees received for own receivables and loans to customers

   185    181    293    273

Contractual commitments to purchase property, plant and equipment

   190    196    349    303

Contractual commitments to acquire loans to customers

   214    230    268    246

Other commitments

   484    447    461    72

Contingencies

We are subject to various contingencies with respect to tax, labour, distributors and other claims. Due to their nature, such legal proceedings and tax matters involve inherent uncertainties including, but not limited to, court rulings, negotiations between affected parties and governmental actions. To the extent that we believe these contingencies will probably be realised, a provision has been recorded in our balance sheet.

To the extent that we believe that the realisation of a contingency is possible (but not probable) and is above a materiality threshold of USD 70 million, we have disclosed the same in note 19 to our consolidated interim financial statements as of 30 June 2009 and for the six-month periods ended 30 June 2009 and 2008, and note 33 to our audited consolidated financial statements as of 31 December 2008 and 2007 and for the three years ended 31 December 2008).

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. Please refer to “—Contractual Obligations and Contingencies—Collateral and Contractual Commitments” for a description of certain collateral and contractual commitments to which we are subject.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk, Hedging and Financial Instruments

We are exposed to foreign currency, interest rate, commodity price, liquidity and credit risks in the normal course of our business. We analyse each of these risks individually as well as on an interconnected basis, and define strategies to manage the economic impact on our performance in line with our financial risk management policy. The risk management committee meets on a frequent basis and is responsible for reviewing the results of the risk assessment, approving recommended risk management strategies, monitoring compliance with the financial risk management policy and reporting to the Finance Committee of our Board.

 

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We use derivative financial instruments to manage actual foreign currency, interest rate, commodity price and credit risks arising in the normal course of business. We do not, as a matter of policy, make use of derivative financial instruments in the context of trading.

Financial markets experienced greater volatility in 2008 than in recent years, which we have addressed and are continuing to address through our existing risk management policies.

Please refer to note 18 to our unaudited consolidated financial statements for the half-year ended 30 June 2009, and note 30 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for a fuller quantitative and qualitative discussion on the market risks to which we are subject and our policies with respect to managing those risks.

Foreign Currency Risk

We are exposed to foreign currency risk on borrowings, investments, (forecasted) sales, (forecasted) purchases, royalties, dividends, licences, management fees and interest expense/income whenever they are denominated in a currency other than the functional currency of our subsidiary engaged in the relevant transaction. To manage this risk, we primarily make use of forward exchange contracts, exchange traded foreign currency futures and cross-currency interest rate swaps.

As far as foreign currency risk on firm commitments and forecasted transactions is concerned, our policy is to hedge operational transactions which are reasonably expected to occur (for example, cost of goods sold and selling, general and administrative expenses) within a designated period. Operational transactions that are certain (such as capital expenditure) are hedged without any limitation in time. Non-operational transactions (such as acquisitions and disposals of subsidiaries) are hedged as soon as they are certain. Although we systematically hedge our transactional foreign exchange exposure, we do not hedge translational exposure.

As of 30 June 2009, we have locked in all of our anticipated Brazilian real/USD transactional exposure through the first half of 2010 at an average forward rate of 2.016 Brazilian real per USD. As of 31 December 2008, we had locked in all of our anticipated Brazilian real/USD transactional exposure for 2009 at an average forward rate of 1.78 Brazilian real per USD, which is 11% lower than the 2.00 Brazilian real per USD average rate for 2008. Other exposures such as USD/Argentine peso, USD/Russian ruble, EUR/Russian ruble, EUR/Romanian leu and EUR/Ukrainian hryvnia, had been either fully or mostly covered for 2009 before the market turmoil in September and October 2008 at rates in line with 2008 averages and therefore with no material transactional impact. Regarding the EUR/Ukrainian hryvnia specifically, please note that liquidity completely dried up after the events of September 2008 and therefore, as of 30 June 2009, we were not able to cover our exposure beyond the third quarter of 2009.

We have performed analyses in relation to our foreign currency translation exposures using a currency sensitivity model which identified varying ranges of possible closing and average exchange rates for 2008, factoring in the possible volatility in those exchange rates (see note 30 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008). We estimate that if the U.S. dollar had weakened or strengthened during 2008 based on such analysis, our 2008 profit would have been USD 854 million (27.3%) higher or lower, respectively, while the translation reserves in equity would have been USD 4,972 million higher or lower, respectively. Following a similar model with respect to foreign currency transactional risk, if certain currencies where we hold non-derivative monetary financial instruments in the local currency (primarily in our Central and Eastern European zone) had weakened or strengthened against the US dollar or euro during 2008, our 2008 profit would have been USD 211 million lower or higher, respectively.

We experienced elevated levels of volatility in foreign exchange rates during 2008 compared with 2007 based on the currencies of the countries in which we have operations or the currencies in which our contracts are denominated, and we expect elevated levels of volatility to persist throughout 2009. We expect this volatility to ultimately decrease over the longer term as the financial markets recover. See note 30 to our audited consolidated

 

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financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for details of the above sensitivity analyses, a fuller quantitative and qualitative discussion on the foreign currency risks to which we are subject and our policies with respect to managing those risks.

Interest Rate Risk

We are exposed to interest rate risk on our variable-rate interest-bearing financial liabilities. As of 31 December 2008, after certain hedging and fair value adjustments, USD 6,444 million, or 28%, of our interest-bearing financial liabilities (which include loans, borrowings and bank overdrafts) bore a variable interest rate. We apply a dynamic interest rate hedging approach where the target mix between fixed and floating rate is reviewed periodically. The purpose of our policy is to achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business strategy. From time to time, we enter into interest rate swap agreements and forward rate agreements to manage our interest rate risk, and also enter into cross-currency interest rate swap agreements to manage both our foreign currency risk and interest-rate risk.

We have performed sensitivity analyses in relation to our interest-bearing financial liabilities and assets which bear a variable rate of interest, factoring in a range of possible volatilities in the different markets where we hold such instruments (see note 30 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008). We have estimated that a change in market interest rates based on the range of volatilities considered in our analysis could have impacted our 2008 profit by plus or minus USD 152 million.

We experienced higher levels of volatility in interest rates throughout 2008 relative to 2007. During the first half of 2009, interest rates on average have declined. We expect to experience continued levels of volatility during the remainder of 2009.

See note 30 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for details of the above sensitivity analyses, a fuller quantitative and qualitative discussion on the interest rate risks to which we are subject and our policies with respect to managing those risks.

Commodity Price Risk

We have significant exposures to the following commodities: aluminium, corn grits, corn syrup, corrugated cardboard, crowns, glass, hops, labels, malt, fuel oil, natural gas, rice and wheat. During 2008, the commodity markets experienced price fluctuations throughout the year, and prices of commodities were affected by a number of factors beyond our control. For example, several commodities used in our operations experienced significant price increases during the course of 2008 due to constraints in global supply amidst growing demand in emerging markets such as Brazil, Russia, India and China. Additionally, higher energy prices increased the cost of energy intensive commodities such as aluminium, as well as impacting costs in our distribution networks and production operations. We expect these price fluctuations to continue throughout 2009. We therefore use both fixed price purchasing contracts and commodity derivatives to minimise exposure to commodity price volatility, primarily for aluminium and sugar. We are generally able to hedge a range of 25% to 35% of our commodity exposure.

As of 31 December 2008, we had the following commodity derivatives outstanding, by maturity:

 

     Notional    Fair Value (1)  
Commodities    <1 year    1-5 years    >5 years    Total   

Aluminium swaps

   348    6    -    354    (167

Sugar futures

   51    17    -    68    (7

Wheat futures

   24    -    -    24    (13

 

(1)

Represents the excess of liabilities over assets at as 31 December 2008.

 

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As of 30 June 2009, our outstanding aluminium swaps had a notional amount of USD 1.077 billion, whereas the notional amounts for our exchange traded sugar futures and wheat futures have not changed materially since 31 December 2008.

In conformity with the IAS 39 hedge accounting rules these hedges are designated as cash flow hedges.

See note 30 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for a fuller quantitative and qualitative discussion on the commodity risks to which we are subject and our policies with respect to managing those risks.

Other Risks

See note 30 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for a fuller quantitative and qualitative discussion on the equity, credit and liquidity risks to which we are subject and our policies with respect to managing those risks.

RECENT DEVELOPMENTS

Results of Operations for the Three Months and Nine Months Ended 30 September 2009 Compared to the Three Months and Nine Months Ended 30 September 2008

The table below presents our condensed consolidated results of operations for the three-month and nine-month periods ended 30 September 2009 and 2008. The data for the three months and the nine months ended 30 September 2009 are reported figures and include Anheuser-Busch data for such periods. The data for the three months and the nine months ended 30 September 2008 are also reported figures and, therefore, do not include Anheuser-Busch figures for such periods.

 

    Reported
three

months
ended

30 September
2009
    Reported
three

months
ended

30 September
2008
    Reported
nine

months
ended

30 September
2009
    Reported
nine

months
ended

30 September
2008
 
    (USD million, except
volumes)
    (USD million, except
volumes)
 

Volumes (thousand hectoliters)

  106,609      71,832      306,884      199,295   

Revenue

  9,763      6,061      27,461      16,624   

Cost of sales

  (4,505   (2,559   (12,894   (7,024

Gross profit

  5,259      3,502      14,567      9,600   

Distribution expenses

  (694   (711   (1,970   (2,006

Sales and marketing expenses

  (1,311   (884   (3,582   (2,578

Administrative expenses

  (528   (340   (1,619   (1,071

Other operating income/expenses

  117      104      467      288   

EBITDA, as defined (1)

  3,961
  
  2,020      10,250
  
  5,363   

 

(1)

For a discussion of how we use EBITDA, as defined, and its limitations, see “—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”.

The changes in each of the items in the table above are attributable primarily to the November 2008 acquisition of Anheuser-Busch. The acquisition mainly affected our North American business, and, to a lesser degree, our Asia Pacific, Western Europe and Global Export and Holding Companies businesses. For a discussion of other “scope” effects and the impact of currency translation changes on our results, see the discussions of each line item below in this section.

 

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Scope Effects and Impact of Currency Translation

To facilitate an understanding of our underlying performance, in this “—Recent Developments” section we measure the effects of “scope”, which is the impact of acquisitions and divestitures, the start up or termination of activities, or the transfer of activities between business zones, and currency effects on translation of foreign operations, on the growth (or decline) of sales volumes, revenues, cost of sales, operating expenses (including distribution expenses, sales and marketing expenses, administrative expenses and other operating income and expenses), profit from operations and EBITDA, as defined, between periods. In contrast, we generally do not measure scope effects or the impact of currency translation on financial items such as depreciation, amortisation and impairment, net finance cost and income tax expense and profit.

Scope effects in the periods under review in this “—Recent Developments” section resulted primarily from the impacts of acquisitions, divestitures and transfers of activities between business zones. The key acquisitions, divestitures and transfers giving rise to scope effects during these periods are described more fully under “—Key Factors Affecting Results of Operations—Acquisitions, Divestitures and Other Scope Changes”. Currency effects on translation of our operations in the periods under review were the result of fluctuations in exchange rates between their operating companies’ functional currencies and our reporting currency, as described more fully under “—Key Factors Affecting Results of Operations—Foreign Currency”.

Combined Results of Operations for the Three-Month and the Nine-Month Periods Ended 30 September 2008

Our unaudited interim consolidated financial information for the three months and the nine months ended 30 September 2009 was prepared in accordance with IFRS and reflects the contribution of the Anheuser-Busch business during the period under review. Given the transformational nature of the Anheuser-Busch acquisition, we believe that a comparison of our actual results for the three months and the nine months ended 30 September 2009 against our actual results for the three months and the nine months ended 30 September 2008, which do not include contributions from the Anheuser-Busch business, is of limited value. Accordingly, to facilitate meaningful comparisons between our results of operations for the three months ended 30 September 2009 and 2008 and the nine months ended 30 September 2009 and 2008, for volumes and the income statement items of revenue, cost of sales and operating expenses, we have prepared illustrative unaudited condensed combined interim results of operations for the three months and the nine months ended 30 September 2008 on the basis of (i) unaudited interim consolidated financial statements of the Anheuser-Busch businesses for the three months and the nine months ended 30 September 2008 and (ii) our unaudited interim consolidated financial results for the three months and the nine months ended 30 September 2008. The unaudited results of the Anheuser-Busch businesses for the three months and the nine months ended 30 September 2008 were prepared in the same manner as described under “Presentation of Financial and Other Data.” The combined financial data for the three-month and nine-month periods ended 30 September 2008 is subject to the same limitations and qualifications as the 2008 full-year pro-forma financial information, described under “Presentation of Financial and Other Data”.

The combined income statement data for the three-month and nine-month periods ended 30 September 2008 has not been audited and is presented for illustrative purposes only. You should consider the combined volume, revenue, cost of sales and operating expenses data for the three-month and nine-month periods ended 30 September 2008 in conjunction with our actual historical financial statements for the year ended 31 December 2008 and for the six months ended 30 June 2009 and the unaudited interim consolidated Anheuser-Busch financial statements for the nine months ended 30 September 2008, all of which are provided elsewhere in this Form F-4.

In the discussions of volumes, revenue, cost of sales and operating expenses below, we have used combined financial data for the three-month and nine-month periods ended 30 September 2008 as the comparative basis for the discussion of reported results of operations the three months and the nine months ended 30 September 2009. As the comparison of reported results of operations for the three months and nine months

 

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ended 30 September 2009, and the combined results of operations for the comparable periods in 2008, eliminates differences in scope related to the Anheuser-Busch acquisition, the discussion below does not generally address the direct impact of Anheuser-Busch acquisition itself. In this section and elsewhere in this Form F-4, references to combined results of operations for the three months and the nine months ended 30 September 2008 refer to information derived from the unaudited interim combined financial data for the three-month and nine-month periods ended 30 September 2008 described above.

The table below compares our reported condensed consolidated results of operations for the three months and nine months ended 30 September 2009 to combined condensed consolidated results of operations for the three months and nine months ended 30 September 2008. The discussions following describe the changes summarized in the table below.

 

    Reported
three

months
ended

30 September
2009
    Combined
three

months
ended

30 September
2008
    Reported
nine

months
ended

30 September
2009
    Combined
nine

months
ended

30 September
2008
 
    (USD million, except volumes)  

Volumes (thousand hectoliters)

  106,609      112,257      306,884      313,179   

Revenue

  9,763      10,893      27,461      30,195   

Cost of sales

  (4,505   (5,293   (12,894   (14,916

Gross profit

  5,259      5,599      14,567      15,279   

Distribution expenses

  (694   (922   (1,970   (2,636

Sales and marketing expenses

  (1,311   (1,448   (3,582   (4,174

Administrative expenses

  (528   (573   (1,619   (1,750

Other operating income/expenses

  117      134      467      353   

Volumes

The following table reflects changes in our volumes across our business zones for the three months and nine months ended 30 September 2009 as compared to the three months and nine months ended 30 September 2008. The volumes for the three months and the nine months ended 30 September 2009 are reported volumes and include Anheuser-Busch volumes for such periods. The volumes for the three months and the nine months ended 30 September 2008 are combined volumes and also include Anheuser-Busch volumes for such periods. See “—Combined Results of Operations for the Three-Month and Nine-Month Periods Ended 30 September 2008”.

 

    Reported
three

months
ended

30 September
2009
  Combined
three

months
ended

30 September
2008 (1)
  Reported
nine

months
ended

30 September
2009
  Combined
nine

months
ended

30 September
2008 (1)
   

(thousand hectoliters)

North America

  35,593   38,085   104,438   108,606

Latin America North

  25,803   23,777   75,763   71,021

Latin America South

  7,208   7,345   23,049   23,133

Western Europe

  9,029   9,179   25,487   26,534

Central & Eastern Europe

  11,898   14,300   32,634   36,722

Asia Pacific

  16,068   18,808   42,021   45,027

Global Export & Holding Companies

  1,011   763   3,492   2,137
               

Total

  106,609   112,257   306,884   313,179
               

 

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Our reported three-month consolidated volumes for the period ended 30 September 2009 decreased by 5.6 million hectoliters to 106.6 million hectoliters compared to combined volumes for the three months ended 30 September 2008. Our reported nine-month consolidated volumes for the period ended 30 September 2009 decreased by 6.3 million hectoliters to 306.9 million hectoliters compared to combined volumes for the nine months ended 30 September 2009.

Scope effects (other than the Anheuser-Busch acquisition) accounted for net volume declines of 2.2 million hectoliters and 2.5 million hectoliters in the three months and nine months ended 30 September 2009, respectively, mainly attributable to the sale of our South Korean subsidiary. See “—Recent Transactions”. Excluding volume changes attributable to scope effects, our reported consolidated beer volumes would have decreased by 3.2% in the three months ended 30 September 2009 and 1.2% in the nine months ended 30 September 2009, compared to combined volumes in the comparable periods of 2008. Also excluding scope effects, in the three months and nine months ended 30 September 2009, our reported consolidated soft drinks volumes declined by 2.3% and grew by 2.5%, respectively, compared to our combined volumes for the comparable periods of 2008.

North America

In the three-month and nine-month periods ended 30 September 2009, our reported volumes in North America declined by 2.5 million hectoliters and 4.2 million hectoliters, respectively, compared to combined volumes for the comparable periods of 2008. This decline was due primarily to strong volume sales in the Anheuser-Busch business in the comparable periods in 2008, as well as to industry weakness.

Latin America North

In the three-month and nine-month periods ended 30 September 2009, our reported volumes in the Latin America North zone grew by 2.0 million hectoliters and 4.7 million hectoliters, respectively, compared to combined volumes for the three-month and nine-month periods ended 30 September 2008, primarily due to strong growth in beer volume sales, as well as to increases in non-beer volumes. These increases resulted from a combination of strong industry performance and market share gains attributable to the introduction of product and packaging changes, as well as higher consumer disposable income.

Latin America South

Our reported volumes in Latin America South declined by 137,000 hectoliters in the three months ended 30 September 2009 and 84,000 hectoliters in the nine months ended 30 September 2009 compared to combined volumes for the three-month and nine-month periods ended 30 September 2008. These declines were due mainly to an industry slowdown in the region, the impact of which was partially offset by the introduction of new marketing initiatives and increased innovations. The Stella Artois brand continued to build its leading position among international brands in Argentina.

Western Europe

Our reported volumes in Western Europe for the three-month and nine-month periods ended 30 September 2009 declined by 150,000 hectoliters and 1.0 million hectoliters, respectively, compared to combined volumes for the three-month and nine-month periods ended 30 September 2008, reflecting industry weakness in the region and a decrease in subcontracted beer volumes following our decision to focus on our own beer products. These decreases were partially offset by smaller decreases in beer volumes in Belgium due to increased sales of the local flagship brand, Jupiler.

Central and Eastern Europe

In the three months and the nine months ended 30 September 2009, our reported volumes in Central and Eastern Europe declined by 2.4 million hectoliters and 4.1 million hectoliters, respectively, compared to

 

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combined volumes for the three months and the nine months ended 30 September 2008, due primarily to an overall industry slowdown in the region, especially Russia. These decreases were partially offset by the introduction of customer loyalty programs and the successful placement of our products in the supermarket channel of distribution.

Asia Pacific

Our reported volumes in Asia Pacific for the three-month and nine-month periods ended 30 September 2009 declined by 2.7 million hectoliters and 3.0 million hectoliters, respectively, compared to combined volumes for the three months and the nine months ended 30 September 2008, as volume growth in the Southeast, Southwest and North of China was more than offset by reduced volumes in the Central and Eastern regions and the disposition of assets in South Korea. See “—Recent Transactions.”

Global Export and Holding Companies

Global Export and Holding Companies reported volumes increased by 248,000 hectoliters and 1.4 million hectoliters in the three months and the nine months ended 30 September 2009 compared to combined volumes for the three months and the nine months ended 30 September 2008.

Revenue

The following table compares reported revenue across our business zones in the three months and the nine months ended 30 September 2009 to combined revenue by business zone in the three months and the nine months ended 30 September 2008.

 

    Reported
three

months
ended

30 September
2009
  Combined
three

months
ended

30 September
2008 (1)
  Reported
nine

months
ended

30 September
2009
  Combined
nine

months
ended

30 September
2008 (1)
    (USD million)

North America

  4,090   4,232   11,961   11,974

Latin America North

  1,838   1,960   4,950   5,691

Latin America South

  419   426   1,302   1,238

Western Europe

  1,209   1,382   3,258   3,930

Central & Eastern Europe

  757   1,085   1,979   2,661

Asia Pacific

  515   731   1,590   1,821

Global Export & Holding Companies

  935   1,076   2,423   2,879
               

Total

  9,763   10,893   27,461   30,195
               

 

(1)

See “—Combined Results of Operations for the Three-Month and Nine-Month Periods Ended 30 September 2008”.

Our reported consolidated revenue was USD 9,763 million for the three months ended 30 September 2009, representing a decrease of USD 1,130 million compared to combined revenue for the comparable period in 2008. Our reported consolidated revenue for the nine months ended 30 September 2009 was USD 27,461 million, a decrease of USD 2,734 million compared to combined revenue for the comparable period in 2008.

Our consolidated revenue for the three-month and nine-month periods ended 30 September 2009 was partly impacted by the developments in volume discussed above. Our revenue per hectoliter on a consolidated basis (which excludes revenue from our entertainment and packaging activities) increased as a result of the Anheuser-Busch acquisition (as the revenue per hectoliter of Anheuser-Busch is higher than the average revenue per hectoliter of the AB InBev Group as a whole) and as a result of revenue management activities, including selective price increases.

 

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The U.S. entertainment business contributed USD 486 million and USD 1,070 million to our revenue for the three-month and nine-month periods ended 30 September 2009, respectively. The U.S. packaging business contributed USD 376 million and USD 1,098 million in revenue for the same periods.

Scope effects (other than the Anheuser-Busch acquisition) accounted for net reductions in revenue of USD 223 million and USD 228 million in the three months and nine months ended 30 September 2009, respectively. Our reported consolidated revenue for the three months and nine months ended 30 September 2009 also reflects negative currency translation impacts of USD 863 million and USD 3,031 million, respectively.

Excluding the scope effects and currency translation changes described above, the main business zones contributing to growth in our reported consolidated revenues were Latin America North and Latin America South in the three months ended 30 September 2009, and the same two regions plus North America in the nine months ended 30 September 2009, in each case as compared to combined revenues for the comparable period in 2008. In Latin America North, revenue growth was attributable to higher volumes. In Latin America South and North America, revenue growth was primarily attributable to revenue management initiatives including selective price increases.

Also excluding the impact of scope effects and currency translation described above, our consolidated revenue fell by 0.4% for the three months ended 30 September 2009, but increased by 1.8% for the nine months ended 30 September 2009, in each case as compared to combined revenue for the comparable period of 2008. These figures reflect the declines in volume discussed above, offset in whole (for the nine month period) and in part (for the three month period) by the effects of higher revenue per hectoliter, primarily as a result of revenue management initiatives. These revenue management initiatives include price increases, particularly in Latin America South, North America and our strategy to improve product mix by focusing on building branded volumes while reducing subcontracted volumes and lower margin beer products, particularly in Western Europe and Central and Eastern Europe. In Brazil, despite the price increases implemented during the summer, revenue per hectoliter was negatively impacted by packaging mix and higher than inflation tax increases (excise and value-added taxes).

Cost of Sales

The following table compares reported cost of sales across our business zones in the three months and the nine months ended 30 September 2009 to combined cost of sales by business zone in the three months and the nine months ended 30 September 2008.

 

    Reported
three

months
ended

30 September
2009
    Combined
three

months
ended

30 September
2008 (1)
    Reported
nine

months
ended

30 September
2009
    Combined
nine

months
ended

30 September
2008 (1)
 
    (USD million)  

North America

  (1,972   (2,177   (5,757   (6,088

Latin America North

  (615   (674   (1,600   (1,975

Latin America South

  (170   (194   (520   (538

Western Europe

  (535   (625   (1,457   (1,835

Central & Eastern Europe

  (339   (533   (923   (1,332

Asia Pacific

  (258   (390   (830   (977

Global Export & Holding Companies

  (615   (701   (1,807   (2,171
                       

Total

  (4,505   (5,293   (12,894   (14,916
                       

 

(1)

See “—Combined Results of Operations for the Three-Month and Nine-Month Periods Ended 30 September 2008”.

 

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Our reported consolidated cost of sales was USD 4,505 million for the three months ended 30 September 2009, representing a decrease of USD 788 million compared to combined cost of sales for the comparable period in 2008. Our reported consolidated cost of sales for the nine months ended 30 September 2009 was USD 12,894 million, a decrease of USD 2,022 million compared to combined cost of sales for the comparable period in 2008.

Scope effects (other than the Anheuser-Busch acquisition) led to decreased consolidated cost of sales in the amounts of USD 108 million in the three months ended 30 September 2009 and USD 202 million in the nine months ended 30 September 2009. Our consolidated cost of sales for the three months and nine months ended 30 September 2009 also reflect a positive currency translation impact of USD 351 million and USD 1,194 million, respectively, mainly in Latin America North, Central and Eastern Europe and Western Europe.

Excluding the scope effects and the currency translation effects described above, our reported consolidated cost of sales declined by 6.4% in the three months ended 30 September 2009, and 4.2% in the nine months ended 30 September 2009, as compared to combined costs of sales for the comparable periods of 2008, reflecting increased efficiency in procurement processes and cost savings in our U.S. and Asia Pacific operations, as well as lower spot prices for non-hedgeable input costs. Also excluding the scope effects and currency translation changes described above, our reported consolidated cost of sales per hectoliter (which excludes cost of sales from our entertainment and packaging activities) decreased by 2.8% in the three months ended 30 September 2009 and by 1.1% in the nine months ended 30 September 2009 compared to combined cost of sales for the comparable period in 2008.

Expenses

The discussion below relates to our consolidated operating expenses, which equal the sum of our distribution expenses, sales and marketing expenses, administrative expenses and other operating income and expenses (net), for the three-month and nine-month periods ended 30 September 2009 as compared to combined operating expenses for the comparable period of 2008. Our operating expenses do not include exceptional charges, which are reported separately.

Our reported consolidated operating expenses for the three months and the nine months ended 30 September 2009 were USD 2,416 million and USD 6,704 million, respectively, representing decreases of USD 393 million and USD 1,503 million, respectively, compared to combined operating expenses for the three months and the nine months ended 30 September 2008. Excluding the scope effects and impacts of currency translation, each described below in this section, our reported consolidated operating expenses declined by 3.7% in the three months ended 30 September 2009, and 4.7% in the first nine months of 30 September 2009, as compared to combined operating expenses in the comparable period of 2008.

 

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Distribution expenses

The following table compares reported distribution expenses across our business zones in the three months and the nine months ended 30 September 2009 to combined distribution expenses by business zone in the three months and the nine months ended 30 September 2008.

 

    Reported
three

months
ended

30 September
2009
    Combined
three

months
ended

30 September
2008 (1)
    Reported
nine

months
ended

30 September
2009
    Combined
nine

months
ended

30 September
2008 (1)
 
   

(USD million)

 

North America

  (212   (297   (610   (868

Latin America North

  (194   (234   (517   (670

Latin America South

  (37   (35   (115   (100

Western Europe

  (123   (163   (351   (485

Central & Eastern Europe

  (69   (124   (191   (327

Asia Pacific

  (35   (33   (111   (83

Global Export & Holding Companies

  (25   (37   (76   (102
                       

Total

  (694   (922   (1,970   (2,636
                       

 

(1)

See “—Combined Results of Operations for the Three-Month and Nine-Month Periods Ended 30 September 2008”.

Our reported consolidated distribution expenses for the three-month and nine-month periods ended 30 September 2009 decreased in each period, to USD 694 million and USD 1,970 million, respectively, compared to combined distribution expenses in the corresponding period in 2008.

Scope effects (other than the Anheuser-Busch acquisition) positively affected consolidated distribution expenses in the three months ended 30 September 2009 by USD 7 million, but negatively impacted distribution expenses in the nine months ended 30 September 2009 by USD 23 million. Our consolidated distribution expenses for the three months and nine months ended 30 September 2009 also reflect positive currency translation impacts of USD 86 million and USD 319 million, respectively.

Aside from the scope effects and currency translation impacts described above, our reported consolidated distribution expenses decreased 14.7% in the three months ended 30 September 2009 and 13.9% in the nine months ended 30 September 2009, as compared to combined distribution expenses in the comparable periods of 2008, benefiting from cost savings initiatives in North America and lower tariffs in Central and Eastern Europe.

 

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Sales and marketing expenses

The following table compares reported sales and marketing expenses across our business zones in the three months and the nine months ended 30 September 2009 to combined sales and marketing expenses by business zone in the three months and the nine months ended 30 September 2008.

 

    Reported
three

months
ended

30 September
2009
    Combined
three

months
ended

30 September
2008 (1)
    Reported
nine

months
ended

30 September
2009
    Combined
nine

months
ended

30 September
2008 (1)
 
   

(USD million)

 

North America

  (461   (480   (1,254   (1,398

Latin America North

  (240   (215   (654   (630

Latin America South

  (52   (48   (129   (140

Western Europe

  (201   (273   (580   (816

Central & Eastern Europe

  (135   (189   (361   (517

Asia Pacific

  (134   (170   (390   (458

Global Export & Holding Companies

  (88   (74   (214   (216
                       

Total

  (1,311   (1,448   (3,582   (4,174
                       

 

(1)

See “—Combined Results of Operations for the Three-Month and Nine-Month Periods Ended 30 September 2008”.

Our reported consolidated sales and marketing expenses for the three-month and nine-month periods ended 30 September 2009 declined to USD 1,311 million and USD 3,582 million, respectively, compared to combined sales and marketing expenses for the corresponding period in 2008.

Scope effects (other than the Anheuser-Busch acquisition) positively affected our consolidated sales and marketing expenses in 2009, in the amount of USD 36 million in the three months ended 30 September 2009 and USD 37 million in the nine months ended 30 September 2009. Our consolidated sales and marketing expenses for the three months and nine months ended 30 September 2009 also reflect positive currency translation impacts of USD 124 million and USD 442 million, respectively.

Excluding the scope effects and currency translation changes described above, our reported consolidated sales and marketing expenses for the three-month and nine-month periods ended 30 September 2009 increased by 1.6% and decreased by 2.7%, respectively, over combined sales and marketing expenses for the comparable period in 2008, as a result of savings in “non-working money” in the United States being reinvested in the launch of product innovations. In addition, North America and Western Europe continued to benefit from significant media and advertising cost deflation.

 

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Administrative expenses

The following table compares reported administrative expenses across our business zones in the three months and the nine months ended 30 September 2009 compared to combined administrative expenses by business zone in the three months and the nine months ended 30 September 2008.

 

    Reported
three

months
ended

30 September
2009
    Combined
three

months
ended

30 September
2008 (1)
    Reported
nine

months
ended

30 September
2009
    Combined
nine

months
ended

30 September
2008 (1)
 
   

(USD million)

 

North America

  (155   (231   (452   (692

Latin America North

  (132   (101   (364   (323

Latin America South

  (20   (20   (54   (49

Western Europe

  (79   (84   (262   (272

Central & Eastern Europe

  (38   (53   (126   (132

Asia Pacific

  (32   (31   (109   (86

Global Export & Holding Companies

  (73   (54   (253   (197
                       

Total

  (528   (573   (1,619   (1,750
                       

 

(1)

See “—Combined Results of Operations for the Three-Month and Nine-Month Periods Ended 30 September 2008”.

Our reported consolidated administrative expenses for the three-month and nine-month periods ended 30 September 2009 decreased to USD 528 million and USD 1,619 million, respectively, from combined administrative expenses for the corresponding period in 2008.

Scope effects (other than the Anheuser-Busch acquisition) positively affected our consolidated administrative expenses in 2009, in the amount of USD 6 million in the three months ended 30 September 2009 and USD 22 million in the nine months ended 30 September 2009. Our consolidated administrative expenses for the three months and nine months ended 30 September 2009 also reflect positive currency translation impacts of USD 51 million and USD 215 million, respectively.

Not including the scope effects and currency translation impacts described above, our reported consolidated administrative expenses increased by 2.1% in the three months ended 30 September 2009 and by 6.0% in the nine months ended 30 September 2009, as compared to combined administrative expenses in the comparable period of 2008. These increases were due to higher accruals for variable compensation during 2009 as compared with the relatively low levels of such accruals in 2008, reflecting the performance of the business at that time. These increases were partially offset by savings realized from our Zero-Based Budgeting initiative.

 

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Other operating income/(expense)

The following table compares reported other operating income and expenses across our business zones in the three months and the nine months ended 30 September 2009 to combined other operating income and expenses by business zone in the three months and the nine months ended 30 September 2008.

 

    Reported
three

months
ended

30 September
2009
    Combined
three

months
ended

30 September
2008 (1)
    Reported
nine

months
ended

30 September
2009
    Combined
nine

months
ended

30 September
2008 (1)
 
   

(USD million)

 

North America

  (53   2      20      (31

Latin America North

  63      39      153      140   

Latin America South

  (4   (5   (7   0   

Western Europe

  (30   (37   (83   (137

Central & Eastern Europe

  (33   (45   (96   (121

Asia Pacific

  6      13      12      12   

Global Export & Holding Companies

  169      166      467      490   
                       

Total

  117      134      467      353   
                       

 

(1)

See “—Combined Results of Operations for the Three-Month and Nine-Month Periods Ended 30 September 2008”.

From the net balances of combined other operating income and expenses in the three-month and nine-month periods ended 30 September 2009, the net balance of our reported consolidated other operating income and expenses decreased to USD 117 million for the three-month period ended 30 September 2009 and increased to USD 467 million for the nine-month period ended 30 September 2009.

Synergies

In the nine months ended 30 September 2009, we captured USD 875 million of the USD 1 billion of synergy savings targeted for full-year 2009. Of the USD 875 million in synergies captured in the first nine months of 2009, we captured USD 295 million in the three months ended March 31 2009, USD 315 million in the three months ended 30 June 2009 and USD 265 million in the three months ended 30 September 2009. These savings were driven by the implementation of our Zero-Based Budgeting initiative and manufacturing best practices and, to a lesser extent, savings on our procurements. For more details of our synergies targets, refer to “Business Description—Strengths and Strategy—Strengths—Strict financial discipline”.

 

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EBITDA, as defined

The following table reflects changes in our EBITDA, as defined, for the three months and nine months ended 30 September 2009 as compared to the corresponding period of 2008:

 

    Reported
three

months
ended

30 September
2009
    Reported
three

months
ended

30 September
2008
    Reported
nine

months
ended

30 September
2009
    Reported
nine

months
ended

30 September
2008
 
   

(USD million)

 

Profit

  1,844      998      4,187      2,764   

Income tax expense

  601      275      1,421      507   

Net finance cost

  966      281      2,958      794   

Share of result of associates

  (157   (1   (385   (4
                       

Profit from operations

  3,254      1,553      8,181      4,061   

Depreciation, amortisation and impairment

  707      467      2,069      1,302   
                       

EBITDA, as defined

  3,961      2,020      10,250      5,363   
                       

See “—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined” for additional information on our definition and use of EBITDA, as defined.

Our EBITDA, as defined, increased to USD 3,961 million for the three months ended 30 September 2009 and to USD 10,250 million for the nine months ended 30 September 2009. These amounts represented increases of USD 1,941 million (or 96.1%) and USD 4,887 million (or 91.1%), as compared to our EBITDA, as defined, for the corresponding periods of 2008.

Our EBITDA, as defined, for the three-month and nine-month periods ended 30 September 2009 was positively affected by certain exceptional items, in the net amount of USD 412 million in the three-month period and USD 318 million for the nine-month period. These figures for exceptional items compare with the negative impacts in the amount of USD 118 million in the three months ended 30 September 2008 and USD 172 million in the nine months ended 30 September 2008. The exceptional items recorded in 2009 mainly impacted the Asia Pacific zone, as the figures reflect a USD 436 million gain on the sale of assets of South Korea, recorded in the three months ended 30 September 2009.

Net Financing Costs

Reported consolidated net financing costs totaled USD 966 million in the three-month period ended 30 September 2009 compared to USD 281 million in the three-month period ended 30 September 2008, and USD 2,958 million in the nine-month period ended 30 September 2009 compared to USD 794 million in the nine-month period ended 30 September 2008. The increase reflects interest on the existing Anheuser-Busch debt and the senior facilities to fund the acquisition, non-cash amortization of the arrangement fees paid on the senior facilities and amortization of the fair value adjustment on the Anheuser-Busch debt.

 

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The following table reflects our net financing cost, for the three months and nine months ended 30 September 2009 as compared to the corresponding period of 2008:

 

     Reported
three

months
ended

30 September
2009
    Reported
three

months
ended

30 September
2008
    Reported
nine

months
ended

30 September
2009
    Reported
nine

months
ended

30 September
2008
 
     (USD million)  

Net Interest expense

   (816   (262   (2,546   (702

Accretion expense

   (137   (1   (346   (10

Other Financial results

   (13   (18   (66   (82
                        

Net finance costs

   (966   (281   (2,958   (794
                        

Share of Result of Associates

Reported consolidated share of result of associates was USD 157 million in the three-month period ended 30 September 2009 compared to USD 1 million in the three-month period ended 30 September 2008, and USD 385 million in the nine-month period ended 30 September 2009 compared with USD 4 million in the nine-month period ended 30 September 2008, largely reflecting the results of Grupo Modelo.

Income Tax Expense

Reported consolidated income tax expense was USD 601 million in the three-month period ended 30 September 2009, with an effective tax rate of 26.3%, and USD 1,421 million in the nine months ended 30 September 2009, with an effective tax rate of 27.2%. The income tax expense was mainly impacted by the consolidation of the Anheuser-Busch U.S. companies acquired, for which the results were taxed at an average rate of 40%, and higher realized profits at AmBev Brazil taxed at a marginal tax rate of 34%. For the full year 2009, we continue to expect an effective tax rate of 25% to 27%.

Profit Attributable to Minority Interests

Reported share of consolidated profit attributable to minorities decreased to USD 298 million in the three-month period ended 30 September 2009 and USD 854 million in the nine-month period ended 30 September 2009, from USD 307 million in the three-month period ended 30 September 2008 and USD 866 million achieved in the nine-month period ended 30 September 2008.

Recent Transactions

On 1 July 2009, we announced that we had established a “Level 1” American Depositary Share (“ ADS ”) program in the United States. Each ADS represents one of our ordinary shares. In September 2009, we filed a registration statement on Form 20-F with the SEC and, from 16 September 2009, ADSs representing our ordinary shares are listed on the New York Stock Exchange under the symbol “BUD”. Our ordinary shares continue to trade on Euronext Brussels under the symbol “ABI”.

On 24 July 2009 we completed the previously announced sale of our Korean subsidiary Oriental Brewery to an affiliate of KKR for USD 1.8 billion, which resulted in USD 1.5 billion of cash proceeds at closing. Under the terms of the agreement, we will continue our relationship with Oriental Brewery through granting Oriental Brewery exclusive licenses to distribute certain brands in South Korea including Budweiser, Bud Ice and Hoegaarden and by having an ongoing interest in Oriental Brewery through an agreed earnout. In addition, we have the right but not the obligation to reacquire Oriental Brewery after five years at predetermined financial terms.

 

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On 2 September 2009, InBev Participações Societárias SA, our wholly-owned Brazilian subsidiary, issued notes in an aggregate principal amount of 2.0 billion reais, which will mature on 12 August 2012 (the “ September Brazilian Notes ”). The notes bear interest at a floating rate of 114% of CDI, the monthly Brazilian interbank lending rate, and are guaranteed by us and another of our wholly-owned subsidiaries, Interbrew International BV. The net proceeds from the offering were used to pay down the Facility A loan, which comprises part of the senior debt facilities agreement and which is described under “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”.

On 29 September 2009, we completed the previously announced sale of our Tennent’s Lager brand and associated trading assets in Scotland, Northern Ireland and the Republic of Ireland (part of InBev UK Limited) to C&C Group plc for a total enterprise value of GBP 180 million. Included in the sale are the Glasgow Wellpark Brewery in Scotland, where Tennent’s Lager is brewed, rights to the Tennent’s Lager brand itself, Tennent’s Ales and assets located in Scotland, Northern Ireland and the Republic of Ireland which currently belong to us. As part of the agreement, we appointed C&C Group as distributor of certain of our brands in Scotland, Northern Ireland and the Republic of Ireland, and C&C Group granted us the right to use the Tennent’s Super and Tennent’s Pilsner brands in certain worldwide geographies.

On 1 October 2009, we completed the sale of four metal beverage can and lid manufacturing plants from our U.S. metal packaging subsidiary, Metal Container Corporation, to Ball Corporation for approximately USD 577 million. In connection with this transaction, Ball Corporation has entered into a long-term supply agreement to continue to supply us with metal beverage cans and lids from the divested plants, and has committed, as part of the acquisition agreement, to offer employment to each active employee of the plants.

On 16 October 2009, we issued the Old Notes with an aggregate value of USD 5.5 billion in an offering to qualified institutional buyers in the United States in reliance on Rule 144A under the Securities Act and outside the United States in reliance on Regulation S under the Securities Act. As a result, during October 2009, we completed repayment of the remaining balance of the USD 12 billion Facility A, one year before its maturity, and repaid a portion of our senior Facility C. Consequently, we project our net finance costs in the three months ended 31 December 2009 will include incremental accretion expenses of USD 86 million and an interest rate hedging loss of USD 240 million, as hedging instruments for the repaid parts of Facility C are no longer effective. For further details of Facility A and Facility C, see “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition—Senior Facilities Agreement”.

On 12 November 2009 immediately after the closure of Euronext Brussels, we purchased 8,300,000 of our shares over the counter from our fully owned subsidiary Brandbrew SA. The purchase price was equal to the closing price of the shares on Euronext Brussels on 12 November 2009, which was EUR 32.59 per share.

On 1 December 2009, we completed the sale of our indirect wholly owned subsidiary, Busch Entertainment Corporation, to an entity established by Blackstone Capital Partners V L.P., for up to USD 2.7 billion. The purchase price was comprised of a cash payment of USD 2.3 billion and a right to participate in Blackstone Capital Partners’ return on its initial investment, which is capped at USD 400 million.

On 2 December 2009, we completed the sale of our Central European operations to CVC Capital Partners, for an enterprise value of approximately USD 2,231 million and additional rights to a future payment estimated to be as much as USD 800 million contingent on CVC Capital Partners’s return on its initial investment. The USD 2,231 million estimated enterprise value is comprised of (1) USD 1,618 million in cash, (2) USD 448 million in an unsecured subordinated deferred payment obligation with a six year maturity, which can be automatically extended by up to two years in the event of restructuring of the senior debt financing, bearing interest at 8-15% and (3) USD 165 million in minority interests, assuming market value at close on 16 October 2009. Under the terms of the agreement, our operations in Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, Romania, Serbia and Slovakia were sold. CVC Capital Partners agreed to brew and/or distribute Stella Artois, Beck’s, Löwenbräu, Hoegaarden, Spaten and Leffe in the above countries

 

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under license from us. We retain rights to brew and distribute Staropramen in several countries including Ukraine, Russia, the US, Germany and the UK. In addition, we have a right of first offer to reacquire the business should CVC Capital Partners decide to sell in the future.

Recent Legal Developments

With respect to the Ginsburg Litigation, we received a judgment in our favor on 4 August 2009. The plaintiffs filed an appeal of this judgment on 19 August 2009. We, however, continue to vigorously defend against these claims through the appellate process.

With respect to the Group Modelo arbitration, the final arbitration proceeding was conducted in New York City in August 2009. There has been no ruling from the arbitration panel to date.

OUTLOOK AND TREND INFORMATION

The overall environment remains challenging; we project full-year total cost of sales per hectoliter to decline slightly in 2009. We expect to continue to deliver on our synergy and cash flow generation goals, while at the same time driving growth through sales and marketing programmes that combine discipline and efficiency with innovation.

Looking out on the rest of the year, we have a number of initiatives and targets to achieve. We will continue to work hard to deliver on our 2009 commitments:

 

   

Capturing USD 1 billion of synergies from Anheuser-Busch in 2009 (with a goal of ultimately achieving aggregate synergies of USD 2.25 billion by the end of 2011);

 

   

Releasing at least USD 500 million of working capital in the U.S. while continuing to strive for improvements at the former InBev;

 

   

Maintaining pricing discipline in relevant markets while continuing to support our focus brands;

 

   

Reducing capital expenditures by at least USD 1 billion from pro-forma 2008 while not compromising the quality of our products and the safety of our people;

 

   

Enhancing the maturity and currency profile of our outstanding debt; and

 

   

Optimising the effective tax rate of the combined company towards the 25% to 27% range.

 

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BUSINESS DESCRIPTION

GENERAL OVERVIEW

We are the world’s largest brewing company by volume, and one of the world’s five largest consumer products companies by 2008 EBITDA, as defined, based on the 2008 full-year pro-forma financial information. As a consumer-centric, sales-driven company, we produce, market, distribute and sell a strong, balanced portfolio of nearly 300 beer brands. These include global flagship brands Budweiser, Stella Artois and Beck’s; multi-country brands such as Leffe and Hoegaarden; and many “local champions” such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske and Jupiler. We also produce and distribute soft drinks, particularly in Latin America.

Our brewing heritage and quality are rooted in brewing traditions that originate from the Den Horen brewery in Leuven, Belgium, dating back to 1366, and those of Anheuser & Co brewery, established in 1860 in St. Louis, U.S.A. As at 31 December 2008, we employed approximately 120,000 people, with operations in over 30 countries across the world. Given the breadth of our operations, we are organised along seven business zones or segments: North America, Latin America North, Latin America South, Western Europe, Central & Eastern Europe, Asia Pacific and Global Export & Holding Companies. The first six correspond to specific geographic regions in which our operations are based. As a result, we have a global footprint with a balanced exposure to developed and developing markets and production facilities spread across our six geographic regions.

On 18 November 2008, we completed our acquisition of Anheuser-Busch, the largest brewer of beer and other malt beverages in the United States. Following completion of the Anheuser-Busch acquisition, we have significant brewing operations within our North America business zone. On a pro-forma basis for the combined company, the North America business zone would have accounted for 33.8% of our consolidated volumes for the year ended 31 December 2008 as compared to 4.8% of our actual consolidated volumes for the year ended 31 December 2007. Through Anheuser-Busch, we own a number of subsidiaries that conduct various other business operations, including one of the largest theme park operators in the United States, a major manufacturer of aluminium cans and one of the largest recyclers of aluminium cans in the United States by weight.

We also have significant exposure to fast-growing emerging markets in Latin America North (which on a pro-forma basis for the combined company would have accounted for 24.5% of our consolidated volumes in the year ended 31 December 2008), Central & Eastern Europe (which would have accounted for 11.0% on the same basis), Asia Pacific (which would have accounted for 13.4% on the same basis) and Latin America South (which would have accounted for 8.2% on the same basis).

Based on the 2008 pro-forma information for our combined company, our 2008 volumes (beer and non-beer) would have amounted to 416 million hectoliters and our revenue would have amounted to approximately USD 39.0 billion.

Registration and Main Corporate Details

Anheuser-Busch InBev SA/NV was incorporated on 2 August 1977 for an unlimited duration under the laws of Belgium under the original name BEMES. It has the legal form of a public limited liability company ( naamloze vennootschap/société anonyme ). Its registered office is located at Grand-Place/Grote Markt 1, 1000 Brussels, Belgium, and it is registered with the Register of Legal Entities of Brussels under the number 0417.497.106. Our headquarters are located at Brouwerijplein 1 3000 Leuven, Belgium (tel.: +32 16 27 61 11). Our agent in the United States is John Blood, c/o AB InBev Services LLC, 250 Park Avenue, 2nd Floor, New York, NY 10017.

We are a publicly traded company, listed on Euronext Brussels under the symbol ABI. ADSs representing our ordinary shares trade on the New York Stock Exchange under the symbol BUD.

 

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History and Development of the Company

Our roots can be traced back to Den Horen in Leuven, which began making beer in 1366. In 1717 Sébastien Artois, master brewer of Den Horen, took over the brewery and renamed it Sébastien Artois.

In 1987, the two largest breweries in Belgium merged: Brouwerijen Artois NV, located in Leuven, and Brasserie Piedboeuf SA, founded in 1853 and located in Jupille, resulting in the formation of Interbrew SA (“ Interbrew ”). Following this merger, Interbrew acquired a number of local breweries in Belgium. By 1991, a second phase of targeted external growth began outside Belgium’s borders. The first transaction in this phase took place in Hungary with the acquisition of Borsodi Sorgyar in 1991, followed in 1995 by the acquisition of John Labatt Ltd. in Canada, and then in 1999 by a joint venture with SUN Brewing in Russia.

Interbrew operated as a family-owned business until December 2000, the time of its initial public offering on Euronext Brussels.

The last decade has been marked by increasing geographical diversification, seeing Interbrew move into new areas or strengthen its operations in countries or regions in which it had previously acquired a foothold. In 2000, Interbrew acquired Bass Brewers and Whitbread Beer Company in the United Kingdom, and in 2001 it established itself in Germany with the acquisition of Brauerei Diebels GmbH & Co KG. This was followed by the acquisition in 2001 of Brauerei Beck GmbH & Co KG. and in 2002 of the Gilde Group. In 2002, Interbrew strengthened its position in China by acquiring stakes in the K.K. Brewery and the Zhujiang Brewery. In 2004, Interbrew acquired Spaten-Franziskaner Bräu KGaA.

2004 marked a significant event in our recent history: the combination of Interbrew and AmBev, a Brazilian company listed (and currently still listed) on the New York Stock Exchange and on the São Paulo Stock Exchange, resulting in the creation of InBev. At the time of the combination, AmBev was the world’s fifth largest brewer, with a significant presence in the Brazilian market, as well as strong positions throughout Latin America.

In 2004, InBev also acquired, through AmBev, its initial 50.64% interest in Quilmes Industrial S.A. (“ Quinsa ”) as part of the Interbrew-AmBev combination, thereby strengthening its foothold in Argentina, Bolivia, Chile, Paraguay and Uruguay. Following a series of transactions as a result of which AmBev’s equity interest in Quinsa increased to approximately 91%, on 28 December 2007 AmBev launched a voluntary offer to purchase the outstanding shares of Quinsa that were not owned by AmBev or its subsidiaries. On 12 February 2008, when the voluntary offer to purchase expired, AmBev’s voting interest in Quinsa increased to 99.56% and its economic interest increased to 99.26%. After subsequent Quinsa share buy-backs, and continued purchases of shares in 2008 from Quinsa’s minority shareholders by AmBev’s subsidiary, Dunvegan S.A., AmBev increased its voting interest in Quinsa to approximately 99.83% and its economic interest to approximately 99.81%.

The AmBev and Quinsa transactions allowed InBev to position itself in the Latin American beer market and also to gain a presence in the soft drinks market (as AmBev is PepsiCo’s second largest bottler in the world and largest bottler outside of the United States).

In 2004, InBev further acquired the China brewery activities of the Lion Group.

2005 marked the acquisition of 100% of the Tinkoff brewery in St. Petersburg, Russia.

In 2006, InBev acquired Fujian Sedrin Brewery Co. Ltd., the largest brewer in Fujian province of China, making InBev a major brewer in China, the world’s largest beer market by volume. The acquisition of the Sedrin brand also allowed InBev to strengthen its Chinese products portfolio.

In 2007, Labatt Brewing Company Limited (“ Labatt ”) acquired Lakeport Brewing Income Fund in Canada, securing a strong presence for us in the growing value segment in Ontario. 2007 also marked the acquisition of Cervejarias Cintra Indústria e Comércio Ltda (“ Cintra ”) by AmBev, thereby enabling AmBev to expand production capacity to meet the continuing increase in demand in the beer and soft drink markets in

 

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Brazil. The initial transaction did not include the brands and distribution assets of Cintra. In January 2008, AmBev reached an agreement for the purchase of the Cintra brands, and these brands were subsequently sold to the Brazilian brewer Schincariol in May 2008.

In May 2007, InBev announced a long-term joint venture agreement with the RKJ group, a leading beverage group operating in India. InBev expected this to be its vehicle to invest in the Indian beer market. As of 1 April 2009, the joint venture vehicle began selling, marketing and distributing Budweiser in India. We expect that the venture will build a meaningful presence in India over time.

In March 2008, InBev reached an agreement with its Chinese partner in the InBev Shiliang (Zhejiang) Brewery to increase InBev’s stake in this business to 100%. The deal was approved by the relevant authorities in June 2008. This step enabled InBev to strengthen its position in the Zhejiang province in China.

On 13 July 2008, InBev and Anheuser-Busch announced their intention to combine the two companies by way of an offer by InBev of USD 70 per share in cash for all outstanding shares of Anheuser-Busch. The total amount of funds necessary to consummate the Anheuser-Busch acquisition was approximately USD 54.8 billion, including the payment of USD 52.5 billion to shareholders of Anheuser-Busch, refinancing certain Anheuser-Busch indebtedness, payment of all transaction charges, fees and expenses and the amount of fees and expenses and accrued but unpaid interest to be paid on Anheuser-Busch’s outstanding indebtedness. InBev shareholders approved the Anheuser-Busch acquisition at InBev’s Extraordinary Shareholders Meeting on 29 September 2008 and, on 12 November 2008, a majority of Anheuser-Busch shares were voted to approve the transaction at a Special Shareholders Meeting of Anheuser-Busch. The Anheuser-Busch acquisition was completed, and the certificate of merger filed, on 18 November 2008. For further details of our acquisition of Anheuser-Busch, see “Business Description—Material Contracts”.

In November 2008, InBev agreed to divest the assets of InBev USA LLC to win clearance from the U.S. Department of Justice for its acquisition of Anheuser-Busch. On 13 March 2009 we announced that we had completed the sale of the assets of InBev USA LLC (d/b/a Labatt USA) to an affiliate of KPS Capital Partners, LP. Under the terms of the agreement announced on 23 February 2009, KPS Capital Partners, LP acquired the assets of Labatt USA and an exclusive license, granted by Labatt, (i) to brew Labatt branded beer in the U.S. or Canada solely for sale for consumption in the U.S.; (ii) to distribute, market and sell Labatt branded beer for consumption in the U.S.; and (iii) to use the relevant trademarks and intellectual property to do so. On 11 August 2009, the U.S. District Court for the District of Columbia gave final approval to the settlement proposed by the U.S. Department of Justice in connection with our acquisition.

Beginning in 2003, Anheuser-Busch participated in a strategic alliance with Tsingtao, one of the largest brewers in China and producer of the Tsingtao brand. Through the Anheuser-Busch acquisition, we acquired Anheuser-Busch’s 27% economic ownership interest and a 20% voting interest in Tsingtao. On 30 April 2009, we announced that we had completed the previously announced sale of a 19.9% minority stake in Tsingtao to Asahi Breweries, Ltd. As a result of the transaction, Asahi Breweries, Ltd became Tsingtao’s second largest shareholder. Tsingtao Brewery Group remained the largest shareholder in Tsingtao. On 8 May 2009, we announced that we had entered into an agreement with a private investor, Mr. Chen Fashu, to sell our remaining 7% stake in Tsingtao. On 5 June 2009 we announced that the transaction had closed.

On 24 July 2009, we completed the previously announced sale of our South Korean subsidiary, Oriental Brewery, to an affiliate of Kohlberg Kravis Roberts & Co. L.P. (“ KKR ”) for USD 1.8 billion, which resulted in USD 1.5 billion of cash proceeds at closing. Under the terms of the agreement, we will continue our relationship with Oriental Brewery through granting Oriental Brewery exclusive licenses to distribute certain brands in South Korea including Budweiser, Bud Ice and Hoegaarden, and by having an ongoing interest in Oriental Brewery through an agreed earn-out. In addition, we will have the right, but not the obligation, to re-acquire Oriental Brewery five years after the closing of the transaction based on predetermined financial terms. The divestiture of Oriental Brewery is part of our ongoing deleveraging programme and allows us to repay debt incurred as a result of the Anheuser-Busch acquisition.

 

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We have continued and may continue to dispose of additional assets or businesses, and expect to utilise the proceeds from any such disposals to repay indebtedness incurred to finance the Anheuser-Busch acquisition. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions.” Aside from the transactions disclosed in this Form F-4, we have not yet reached any definitive agreements regarding disposals of assets or businesses, but we are currently exploring our options in relation to such disposals, taking into account a range of factors, including the possibility of disposals of assets that are not core to its businesses, disposals of self-contained operations on a stand-alone basis and disposals that can occur with minimum adverse tax effects.

For further details of our principal capital expenditures and divestitures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Investments”.

STRENGTHS AND STRATEGY

Strengths

We believe that the following key strengths will drive the realisation of our strategic goals and reinforce our competitive position in the marketplace:

Global platform with strong market positions in key markets

We are one of the world’s largest brewing companies and believe we hold leading market positions in over 20 markets. We have strong market positions based on strong brands and benefit from scale. We believe this positions us well to deploy significant resources on sales and marketing to build and maintain our brands, achieve attractive sourcing terms, generate cost savings through centralisation and produce a lean cost structure. Our global reach provides us with a strong platform to grow our global and multi-country brands, while developing local brands tailored to regional tastes. We benefit from a global distribution network which, depending on the location, is either owned by us or is based on strong partnerships with wholesalers and local distributors.

We believe that in 2008 the approximate industry volumes and our approximate market shares by volume in the world’s five largest beer markets by volume are as follows:

 

     Total
industry
volume
(million
hectoliters) (1)
   AB InBev
market
share
(%)

China

   407    12.05

United States

   251    50.80

Brazil

   102    67.50

Germany

   91    9.62

Russia

   77    18.38

United Kingdom

   47    21.80

 

(1)

Total industry volume figures are based on total beer industry sales or consumption volumes in the relevant market, except for the China volume figures, which are based on total industry production volumes and Russia volume figures, which are based on retail audits. Sources: China – National Statistic Bureau (SSB); United States – Beverage Market Corp.; Brazil – AC Nielsen Audit Retail; Germany – Deutscher Brauer-Bund; Russia – Business Analytica; United Kingdom – British Beer and Pub Association.

Since the completion of the Anheuser-Busch acquisition and the combination of InBev and Anheuser-Busch, we have been a global leader in the brewing industry by volume and, measured by EBITDA, as defined, for 2008 on the basis of the 2008 full-year pro-forma financial information, we are ranked among the top five

 

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consumer products companies worldwide. The Anheuser-Busch acquisition significantly enhances our position in the United States, one of the most stable and profitable beer markets in the world, and in China, the world’s largest beer market by volume. Management believes that it can realise significant upside potential by rolling out Anheuser-Busch’s brands using our global distribution platform.

Geographical diversification

Our geographically diversified platform balances the growth opportunities of emerging markets with the stability and strength of mature markets. With significant operations in both the Southern and Northern Hemisphere, we benefit from a natural hedge against market, economic and seasonal volatility.

The Anheuser-Busch acquisition further enhanced our geographic diversity and has provided an even more solid balance between high-growth emerging markets and stable mature markets. Based on the 2008 full-year pro-forma financial information for the combined company assuming completion of the Anheuser-Busch acquisition on 1 January 2008, our operating profit was split approximately evenly between emerging and mature markets.

Strong brand portfolio with global, multi-country and local brands

Our strong brand portfolio addresses a broad range of market segments and offers a range of international and local brands in key beer markets through segmentation into three main brand categories:

 

   

Global brands: Capitalising on common values and experiences which appeal to consumers across borders, global flagship brands such as Budweiser, Beck’s and Stella Artois have the strength to be marketed worldwide;

 

   

Multi-country brands: With a strong consumer base in their home market, multi-country brands, such as Leffe and Hoegaarden, bring international flavour to selected markets, connecting with consumers across continents; and

 

   

Local brands: Offering locally popular tastes, local brands, such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Antarctica, Franziskaner and Jupiler, connect particularly well with consumers in their home markets.

Our strategy is to focus our portfolio on premium brands. As a result, we undertake clear brand choices and seek to invest in those brands that build deep connections with consumers and meet their needs. We seek to replicate our successful brand initiatives and best practices across geographic markets.

We believe that Anheuser-Busch’s brands are highly complementary to InBev’s brand portfolio. Many of the Anheuser-Busch brands also have broader appeal and have the potential to be developed into multi-country brands using our global distribution platform.

Strong innovation and brand development capabilities

As a consumer-centric, sales-driven company, we continue to strive to understand the values, lifestyles and preferences of both today’s and tomorrow’s consumers, building fresh appeal and competitive advantage through innovative products and services tailored to meet those needs. We believe that consumer demand can be best anticipated by a close relationship between our marketing and research teams in which current and expected market trends trigger and drive research processes. Successful examples of recently developed products include Stella Artois 4% and Beck’s Vier in the U.K., Bohemia in Brazil, Sedrin in China, Chernigivske in the Ukraine, Quilmes Stout in Argentina, Alexander Keith’s Red Amber Ale in Canada, Hoegaarden Rosée in Belgium and Klinskoye Freeze and Sibirskaya Korona Lime in Russia. Anheuser-Busch has also successfully brought to market a number of innovative product offerings, including Bud Light Lime, and is renowned for its brand development capabilities, creative marketing campaigns and in-depth knowledge of its marketplaces, which we believe will be of significant value.

 

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We believe that our excellence programmes, such as our “World Class Commercial Program”, are one of our competitive advantages. As part of our consumer-centric, sales driven approach, we have established an integrated marketing and sales execution programme, the “World Class Commercial Program”, which is designed to continuously improve the quality of our sales and marketing capabilities and processes by ensuring they are understood and consistently followed. We believe our World Class Commercial Programme in sales contributed to the success of our sales practices and we therefore extended this programme to our marketing practices. During 2008, this programme achieved effective global alignment in our key markets by facilitating shared processes in marketing and sales.

Strict financial discipline

World-class efficiency has been, and remains, a long-term objective for us across all lines of business and markets as well as under all economic circumstances. Avoiding unnecessary costs is a core component of our culture. We distinguish between “non-working” and “working” expenses, the latter having a direct impact on sales volumes or revenues. We currently have a greater focus on reducing non-working expenses, given that they are incurred independently from sales volumes or revenues and without immediate benefit to consumers. By maintaining strict financial discipline and turning non-working expenses into working expenses, our “Cost–Connect–Win” model aims to fund sustainable sales and marketing efforts throughout an economic cycle in order to connect with our customers and win by achieving long-term, profitable growth. We have a number of group-wide cost efficiency programmes in place, including:

 

   

Zero-Based Budgeting or ZBB: Under ZBB, budget decisions are unrelated to the previous year’s levels of expenditure and require justification starting from a zero base each year. Employee compensation is closely tied to delivering on zero-based budgets. ZBB has already been successfully adopted in Latin America North, North America, Central & Eastern Europe, Western Europe as well as at global headquarters, and ZBB was introduced in Latin America South and China in 2007 and is currently being implemented in the United States;

 

   

Voyager Plant Optimisation or VPO: VPO aims to bring greater efficiency and standardisation to our brewing operations and to generate cost savings, while at the same time improving quality, safety and the environment. VPO also entails assessment of our procurement processes to maximise purchasing power and to help us achieve the best results when purchasing a range of goods and services. Behavioural change towards greater cost awareness is at the core of this programme, and comprehensive training modules have been established to assist our employees with the implementation of VPO in their daily routines.

In addition, we have set up business service centres across our business zones which focus on transactional and support activities within our group. The centres help standardise working practices and identify and disseminate best practice.

We expect the Anheuser-Busch acquisition to generate at least USD 2.25 billion of cost savings by the end of 2011, with USD 250 million of cost saving synergies having been delivered in 2008 and the aim to capture USD 1.0 billion in cost saving synergies in 2009 and the balance in the two following years. The cost savings figures fall into four categories:

 

   

Implementation of ZBB and Blue Ocean cost saving programs

 

   

Benefits of scale resulting in lower procurement costs

 

   

Manufacturing best practices resulting in more efficient use of existing capacity

 

   

Other, including the benefit of synergies in China and UK

 

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The estimated cost savings are calculated by comparing the cost forecast for our U.S. operation for the years 2009-2011 (as reflected in our three-year business plan) to the Anheuser-Busch U.S. cost base before the Anheuser-Busch acquisition. We perform this comparison by benchmarking activities at a low level of granularity, including down to the level of individual cost centers for the current budget year. The synergies figures represent amounts estimated to be achieved by the combined businesses in the relevant period. For 2008, we estimated the synergies by comparing the cost base of Anheuser-Busch for the fourth quarter of 2008 to the fourth quarter of 2007. The 2008 savings mainly resulted from savings triggered by the Blue Ocean program implemented by Anheuser-Busch in anticipation of the acquisition and by some ZBB savings.

In addition to cost synergies, management believes that the Anheuser-Busch acquisition will add substantial value through the exchange of best practices in areas such as sales, distribution, marketing and corporate social responsibility. We believe that the disciplined programmes of sales and marketing execution of our group companies can be combined to achieve a best-in-class commercial programme. Anheuser-Busch’s Blue Ocean programme is a cost reduction initiative commenced by Anheuser-Busch prior to the completion of the acquisition, which is aimed at cost savings and process improvements across all areas of that company, including through process benchmarking in Anheuser-Busch’s breweries, energy and environmental initiatives to reduce its reliance on natural gas and fuel oil, supply chain savings, improved materials usage, business process redesign using technology to further centralise Anheuser-Busch’s brewing control rooms and automation of its warehouse functions, the implementation of a new early retirement programme for salaried Anheuser-Busch employees, reorganisations aimed at enhancing efficiency and effectiveness, reducing overhead growth and achieving widespread reductions in non-salary spending.

Experienced management team with a strong track record of delivering synergies through business combinations

During the last two decades, our management (or the management of our predecessor companies) has executed a number of merger and acquisition transactions of varying sizes, with acquired businesses being successfully integrated into our operations, realising significant synergies. Notable examples include:

 

   

The creation of AmBev in 2000. Between 2000 and 2004, operating income after financial income and financial expense increased from 331.7 million reais to 2,163.3 million reais;

 

   

The acquisition of Beck’s in 2002, which today is the number one German beer in the world, with distribution in over 100 countries;

 

   

The combination of AmBev and Quilmes in 2002, where Quilmes’ operating profit increased substantially from 2002 to 2008;

 

   

Labatt, where profitability increased by approximately 10% within the first three years of AmBev gaining control in 2004; and

 

   

The creation of InBev in 2004, through the merger of AmBev and Interbrew, where operating profit margin has increased from 11.9% on a standalone basis in 2003 to 22.7% in 2008.

Our strong track record also extends to successfully integrating portfolios of brands such as Spaten-Löwenbräu in 2003 and leveraging cross-selling potential and distribution networks such as the distribution of Stella Artois through AmBev’s channels in Latin America.

Strategy

Our strategy is based on our vision to be “the Best Beer Company in a Better World”

The guiding principle for our strategy is a vision to be “the Best Beer Company in a Better World” by uniting strong brand development, sales execution and best-in-class efficiency with the role of a responsible

 

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global corporate citizen. The “Best Beer Company” element relates primarily to our aim of maintaining highly profitable operations in all markets where we operate. The term “Better World” articulates our belief that all stakeholders will benefit from good corporate citizenship, finding its expression in the concept of “responsible enjoyment”. We discourage consumers from excessive or underage drinking through marketing campaigns aimed at moderate consumption, as outlined in our Commercial Communications Code.

Four pillars are fundamental to our future strategic positioning

First, we aim to win consumers and secure loyalty through our strong brand portfolio.

 

   

In a rapidly changing marketplace, we seek to continue to focus on understanding customer needs. We aim to achieve high levels of customer orientation in our brand portfolio by positioning it to deliver on consumer demands;

 

   

Our goal is to deliver volume growth in excess of market growth through brand strength, continued premiumisation of our brand portfolio, and sales and marketing investment. We aim to grow revenue ahead of volume growth; and

 

   

We intend to further strengthen brand innovation in order to stay ahead of market trends and maintain consumer appeal;

Second, we intend to win points of connection with consumers through world-class consumer programmes.

 

   

In partnership with distributors, off-trade retailers and on-trade points of sale, we seek to further improve the combination of brand appeal and purchasing experience for the consumer, driven by sustainable marketing investments;

 

   

We intend to further enhance our focus on sales management and marketing by responsibly connecting with new classes of consumers of drinking age; and

 

   

We have established a number of consumer-dedicated activities, such as specific outdoor events, which are designed to provide consumers with a brand experience which exceeds the pure enjoyment of beer;

Third, we strive to continuously improve efficiency and to continue our strong track record in margin enhancements by unlocking the potential for variable and fixed cost savings.

 

   

We aim to maintain long-term cost increases at below inflation, benefiting from the application of cost efficiency programmes such as of ZBB and VPO, as well as from hedging commodity prices; and

 

   

Our management believes cost savings are not yet fully realised across all geographies, and remains committed to its target of long-term margin improvement;

Finally, we seek to continue to drive external growth opportunities through selected acquisitions, with the Anheuser-Busch integration being the key focus in the medium term.

 

   

Our management has repeatedly demonstrated its ability to successfully integrate acquisitions and drive revenue growth ahead of our competitors. External growth will remain a cornerstone of our strategic focus; and

 

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The combination of Anheuser-Busch and InBev has provided us with significant global scale.

 

   

We see significant opportunities to internationalise Anheuser-Busch’s key brands, gain greater access to the U.S. market and benefit from significant cost synergies; and

 

   

Our management anticipates that our combined company will be highly cash-generative which, along with diligent use of capital and active working capital management, is expected to contribute to our objective of rapid de-leveraging.

General factors facilitate the implementation of our corporate strategy

We have identified certain key tools which we believe will enable us to implement our corporate strategy, including:

 

   

An open innovation policy on all levels, aimed at revitalising the beer category and increasing its market share;

 

   

A strong company culture, investing in people and maintaining a strong target-related compensation structure; and

 

   

Best-in-class financial discipline spread throughout the whole organisation.

PRINCIPAL ACTIVITIES AND PRODUCTS

We produce, market, distribute and sell a strong, balanced portfolio of nearly 300 beer brands and have a global footprint with a balanced exposure to developed and developing markets and production facilities spread across our six geographic regions.

We are a consumer-centric, sales-driven company. Consequently, our production facilities and other assets are predominantly located in the same geographical areas as our customers. We set up local production when we believe that there is substantial potential for local sales that cannot be addressed in a cost efficient manner through exports or third-party distribution into the relevant country. Local production also helps us to reduce, although it does not eliminate, our exposure to currency movements.

The table below sets out the main brands we sell in the markets listed below.

 

Market

 

Global brands

 

Multi-country brands

 

Local brands

North America

     

Canada

  Beck’s, Budweiser, Stella Artois   Hoegaarden, Leffe   Beer: Alexander Keith’s, Brahma, Bud Light, Kokanee, Labatt Blue, Labatt Blue Light, Labatt Lite, Staropramen

Cuba

  Beck’s     Beer: Bucanero, Cristal, Mayabe

Mexico (Grupo Modelo)

  Budweiser     Beer: Corona, Bud Light

United States

  Beck’s, Budweiser, Stella Artois   Hoegaarden, Leffe   Beer: Bass, Boddingtons, Brahma, Bud Ice, Bud Light, Bud Light Lime, Budweiser Select, Busch, Busch Light, Michelob Ultra, Natural Light, Staropramen

Latin America

     

Argentina

  Budweiser, Stella Artois    

Beer: Andes, Brahma, Norte, Patagonia, Quilmes

Soft drinks: 7UP, Pepsi, H20h

 

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Market

 

Global brands

 

Multi-country brands

 

Local brands

Bolivia

  Stella Artois     Beer: Ducal, Paceña, Taquiña

Brazil

  Budweiser, Stella Artois   Hoegaarden, Leffe   Beer: Antarctica, Bohemia, Brahma, Skol Soft drinks: Guaraná Antarctica, Pepsi

Chile

  Budweiser, Stella Artois     Beer: Baltica, Becker, Brahma

Dominican Republic

  Budweiser    

Beer: Brahma

Soft drinks: Pepsi, 7UP, Red Rock

Ecuador

  Budweiser     Brahma

Guatemala

      Brahma

Paraguay

  Beck’s, Budweiser, Stella Artois     Beer: Baviera, Brahma, Ouro Fino, Pilsen

Peru

     

Beer: Brahma

Soft drinks: Concordia, Pepsi, Triple Kola

Uruguay

  Budweiser, Stella Artois     Beer: Pilsen, Norteña, Patricia

Venezuela

      Beer: Brahma, Brahma Light, Brahma Ice Soft drinks: Malta Caracas

Western Europe

     

Belgium

  Stella Artois, Beck’s, Budweiser   Hoegaarden, Leffe   Beer: Belle-Vue, Jupiler, Brahma

France

  Stella Artois, Budweiser, Beck’s   Hoegaarden, Leffe   Beer: Boomerang, La Bécasse, Loburg, Brahma

Germany

  Stella Artois, Beck’s   Leffe   Beer: Diebels, Franziskaner, Haake-Beck, Hasseröder, Löwenbräu, Staropramen

Luxembourg

  Stella Artois, Beck’s   Leffe   Beer: Diekirch, Jupiler, Mousel, Belle-Vue, Brahma

Netherlands

  Stella Artois, Beck’s, Budweiser   Hoegaarden, Leffe   Beer: Dommelsch, Jupiler, Hertog Jan, Brahma

United Kingdom

  Stella Artois, Beck’s, Budweiser   Hoegaarden, Leffe   Beer: Bass, Boddingtons, Castlemaine XXXX, Brahma, Staropramen

Italy

  Stella Artois, Beck’s, Budweiser   Leffe   Beer: Brahma, Löwenbräu, Staropramen

Central & Eastern Europe

     

Bulgaria

  Stella Artois, Beck’s   Leffe, Hoegaarden   Beer: Kamenitza, Staropramen

Croatia

  Stella Artois, Beck’s   Leffe, Hoegaarden   Beer: Ozujsko, Staropramen

Czech Republic

  Stella Artois, Beck’s   Leffe, Hoegaarden   Beer: Branik, Kelt, Mestan, Ostravar, Velvet, Vratislav, Staropramen

Hungary

  Stella Artois, Beck’s   Leffe, Hoegaarden   Beer: Borsodi, Staropramen

Serbia

  Stella Artois, Beck’s     Beer: Apatinsko Pivo, Jelen Pivo

 

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Market

 

Global brands

 

Multi-country brands

 

Local brands

Montenegro

  Stella Artois, Beck’s     Beer: Niksicko

Romania

  Stella Artois, Beck’s   Leffe, Hoegaarden   Beer: Bergenbier, Noroc, Löwenbräu

Russia

  Stella Artois, Beck’s, Budweiser   Leffe, Hoegaarden   Beer: Bagbier, Klinskoye, Sibirskaya Korona, T. Tinkoff, Tolstiak, Brahma, Löwenbräu, Staropramen

Ukraine

  Stella Artois, Beck’s   Leffe, Hoegaarden   Beer: Chernigivske, Rogan, Taller, Yantar, Brahma, Staropramen

Asia Pacific

     

China

  Beck’s, Budweiser     Beer: Harbin, Sedrin, Double Deer, Jinling, KK, Zhujiang, Brahma

South Korea

  Stella Artois, Beck’s, Budweiser*   Hoegaarden,* Leffe   Beer: Cass, Cafri, OB, Brahma

 

*

Oriental Brewery has an exclusive license to distribute these brands in South Korea. See “Business Description—Licensing”.

 

The Cass, OB and Cafri brands are produced by Oriental Brewery, which we sold in a transaction that was completed on 24 July 2009. See “—General Overview—History and Development of the Company”.

The table below sets out our sales broken down by business zone for the periods shown:

 

    Six months ended
30 June 2009
    2008 Pro-Forma (2)     2008 Reported (3)     2007 (4)     2006 (4)  

Market

  Revenue (1)
(million
USD)
  Revenue
(% of
total)
    Revenue (1)
(million
USD)
  Revenue
(% of
total)
    Revenue (1)
(million
USD)
  Revenue
(% of
total)
    Revenue (1)
(million
USD)
  Revenue
(% of
total)
    Revenue (1)
(million
USD)
  Revenue
(% of
total)
 

North America

  7,871   44.5   15,416   39.5   3,753   16.0   2,139   10.8   2,296   13.8

Latin America North

  3,111   17.6   7,664   19.6   7,664   32.6   6,707   34.0   5,353   32.1

Latin America South

  883   5.0   1,855   4.8   1,855   7.9   1,372   7.0   919   5.5

Western Europe

  2,049   11.6   4,967   12.7   4,754   20.2   4,725   23.9   4,573   27.4

Central & Eastern Europe

  1,222   6.9   3,267   8.4   3,267   13.9   3,006   15.2   2,283   13.7

Asia Pacific

  1,074   6.1   2,285   5.9   1,494   6.3   1,359   6.9   1,144   6.8

Global Export & Holding Companies

  1,487   8.3   3,548   9.1   720   3.1   427   2.2   124   0.7
                                                 

Total

  17,698   100   39,002   100   23,507   100   19,735   100   16,692   100
                                                 

 

(1)

Gross revenue (turnover) less excise taxes and discounts. In many jurisdictions, excise taxes make up a large proportion of the cost of beer charged to our customers.

 

(2)

The 2008 pro-forma information in the table above is based on pro-forma financial information for our combined company as reflected in our full-year pro-forma financial information included elsewhere in this Form F-4.

 

(3)

The 2008 reported information in the table above is based on our historical consolidated 2008 financial information as reflected in our audited consolidated financial information as of, and for the year ended, 31 December 2008, which reflects the contribution of Anheuser-Busch’s operations to our 2008 results from the closing of the Anheuser-Busch acquisition on 18 November 2008.

 

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(4)

The 2007 and 2006 information in the table above is based on our historical consolidated financial information (as InBev) during those years as reflected in our actual audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

On 2 December 2009, we completed the sale of our Central European operations to CVC Capital Partners. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions”.

For a discussion of changes in revenue, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—Revenue”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Year Ended 31 December 2008 Compared to Year Ended 31 December 2007—Revenue” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Year Ended 31 December 2007 Compared to Year Ended 31 December 2006—Revenue” under our year-over-year Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Beer

We manage a portfolio of nearly 300 brands of beer. In terms of distribution, our beer portfolio is divided into global, multi-country and local brands. Our brands are our foundation and the cornerstone of our relationships with consumers. We invest in our brands to create a long-term, sustainable and competitive advantage, by meeting the various needs and expectations of consumers around the world and by developing leading brand positions around the globe.

On the basis of quality and price, beer markets can be differentiated into the following segments:

 

   

Premium brands at the top of the market, with the very top of the market being represented by the super-premium segment;

 

   

Mainstream or core brands in the middle of the market; and

 

   

Value or discount brands at the lower end of the market.

Our brands are situated across all these segments. For instance, a global brand like Stella Artois generally targets the premium segment across the globe, while a local brand like Lakeport targets the value segment in Canada. We have a particular focus on the premium and core (mainstream) segments, but will be present in the value segment if the market so requires or following an acquisition (for example the acquisition of the value brand Lakeport in Ontario, Canada).

We make clear segment choices and, within those segments, clear brand choices. Examples of these choices include the focus on the premium and carbonated soft drink segments in Argentina, on the premium category in Brazil, on the value, light and premium segments in Canada, on premium and core brands in Russia and on the international premium, domestic premium and core segments in China. The majority of our resources are directed to our “focus brands”, those that we believe have the greatest growth potential in their relevant consumer segments. As of 30 June 2009, our focus brands accounted for approximately two-thirds of our volume.

In lower disposable income markets (for example, Brazil, Russia, Ukraine and China), the value segment can be substantial and growing. As set out above, in such cases we generally intend to ensure that we are present in the market to address the demand for value brands.

In recent years, including through 2007, we observed a trend where the premium segment drove growth in the beer industry. Based on this trend, we established a strategy to select focus brands in certain markets (such

 

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as our North America, Western Europe and Central & Eastern Europe business zones) within the premium rather than the value segment. Due to the slow-down in the global economy in 2008, however, certain countries in these zones experienced a shift from premium to core brands and from core to value brands. We believe we are well placed to deal with short-term trend changes from a portfolio perspective, particularly in key countries like the U.S. while continuing our long-standing strategy of accelerating growth in the core and premium beer segments. We believe that the premium segment will resume its previous momentum and aim to continue our strategy of focusing on selected brands, which seeks to address consumers’ desire to trade up from value to core and from core to premium.

Another trend is the growing need for consumer choice. Again, with our strong brand portfolio and best practice sharing, we believe we are well-placed to take advantage of this opportunity.

Our portfolio includes three global beers with worldwide distribution:

 

   

Stella Artois, the number one Belgian beer in the world according to Plato Logic Limited. Stella currently is distributed in over 80 countries worldwide and has strong global potential. The brand’s heritage dates back to our foundations in 1366. Stella Artois is a premium lager. In 2008, Stella Artois accounted for 2.3% of our pro-forma consolidated volumes for the combined company.

 

   

Beck’s, the number one German beer in the world according to Plato Logic Limited, with distribution in over 100 countries. Beck’s has been brewed using only four key natural ingredients for over 125 years and according to the traditional German Reinheitsgebot (purity law). In 2008, Beck’s accounted for 1.9% of our pro-forma consolidated volumes for the combined company.

 

   

Budweiser, which we consider to be the United States’ first truly national beer brand, continued its strong performance in North America in 2008, with a 11.6% share of the U.S. market (based on Budweiser shipments compared to Beer Institute industry tax paid shipments) and remained the number one brand in Canada according to Plato Logic Limited.

In addition, we have a multi-country portfolio of brands, which increasingly transcend the distinction between global and local. The key multi-country brands include:

 

   

Leffe, a beer that hails from Belgium, available in four varieties in over 60 countries worldwide, with sales volumes that have more than doubled over the last decade; and

 

   

Hoegaarden, a high-end Belgian wheat (or “white”) beer, which is expanding its growth in the United States and even more in Russia.

More locally, we manage numerous well-known “local champions”, which form the foundation of our business. The portfolio of local brands includes:

 

   

Bud Light, originating from the U.S. In the U.S., its share of the premium-light segment is 50% (more than the combined share of the next two premium-light brands) and its volume has grown more than any other top 10 beer brand over recent years. It is the fastest growing brand amongst the top 20 brands in the Canadian beer market.

 

   

Bud Light Lime, a high-end brand extension of Bud Light that was introduced in 2008. Based on Bud Light Lime shipments compared to Beer Institute industry tax paid shipments, it became one of the top 25 U.S. beer brands by volume in its first year.

 

   

Michelob ULTRA, which was rolled out nationally in 2002, is estimated by to be the #12 brand in the U.S. based on Michelob ULTRA shipments compared to Beer Institute industry tax paid shipments.

 

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Michelob and Michelob Light are two Anheuser-Busch trademark brands which combined sell over 1.17 million hectoliters annually in the U.S.

 

   

Natural Light is the largest sub-premium brand in the U.S. with a nearly 20% share of the sub-premium category based on Natural Light shipments compared to Beer Institute industry tax paid shipments. On the same basis (that is , the respective brand shipments compared to Beer Institute industry tax paid shipments), Busch Light and Busch are the #2 and #3 sub-premium brands, respectively, and all our sub-premium brands combined have an over 50% market share in this category in the U.S.

 

   

Brahma, originating from Brazil and available in over 30 countries, including 20 outside Latin America. For example, Brahma is present in the super-premium segment of the Russian market;

 

   

Jupiler, the market leader in terms of sales volumes in Belgium and the official sponsor of the highest Belgian football division, the Jupiler League. It is also sponsor of the Belgian national football team;

 

   

Skol, the leading beer brand in the Brazilian market according to Plato Logic Limited. We invested in pioneering and innovation of the Skol brand, showing new market trends and involvement in entertainment initiatives, such as music festivals;

 

   

Bohemia, which we believe is the leader in the super-premium segment in Brazil;

 

   

Quilmes, the leading beer in Argentina according to Plato Logic Limited, representing 50% of the beer market, and a national symbol with its striped light blue and white label linked to the colours of the Argentine national flag and football team;

 

   

Sibirskaya Korona, developed from a local brand in Western Siberia into a full-fledged national brand sold throughout Russia;

 

   

Klinskoye, having its home market in Moscow;

 

   

Chernigivske, Ukraine’s best selling brand; and

 

   

Harbin and Sedrin, the key drivers of the growth of our business in China.

The branding and marketing of our global brands, Stella Artois, Beck’s and Budweiser is managed centrally within our group. Multi-country brands are managed with more flexibility at the local level for branding and marketing, while the marketing and branding of our local brands is generally managed at a local level. See “—J. Branding and Marketing” for more information on brand positioning, branding and marketing.

In certain markets, we also distribute products of other brewers.

Soft Drinks

While our core business is beer, we also have a presence in the soft drink market in Latin America through our subsidiary AmBev and in the U.S. through Anheuser-Busch. Soft drinks include both carbonated soft drinks and non-alcoholic and non-carbonated soft drinks.

Our non-beer activities encompass the production and sale of our own brands as well as, more significantly, the bottling and distribution of third-party brands. Based on our actual historical financial information for these periods, our non-beer activities accounted for 15.1% of consolidated volumes in 2008,

 

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15.1% of consolidated volumes in 2007 and 14.2% in 2006. In terms of revenue, our non-beer activities generated 8.3% of consolidated revenue in 2008, compared to 8.3% in 2007 and 7.5% in 2006 based on our actual historical financial information for these periods.

Our soft drinks business includes both our own production and agreements with PepsiCo related to bottling and distribution. AmBev is one of PepsiCo’s largest bottlers in the world. Major brands that are distributed under these agreements are Pepsi, 7UP and Gatorade. AmBev has long-term agreements with PepsiCo whereby AmBev was granted the exclusive right to bottle, sell and distribute certain brands of PepsiCo’s portfolio of carbonated soft drinks in Brazil. The agreements will expire on 31 December 2017 and are automatically extended for additional ten-year terms, unless terminated prior to the expiration date by written notice by either party at least two years prior to the expiration of their term or on account of other events, such as a change of control or insolvency of, or failure to comply with material terms or meet material commitments by, our relevant subsidiary. AmBev also has agreements with PepsiCo to bottle, sell, distribute and market some of its brands in the Dominican Republic and in some regions of Peru, including the north and the Lima regions. Through Quinsa, AmBev is also PepsiCo’s bottler for Argentina, Bolivia and Uruguay.

Apart from the bottling and distribution agreements with PepsiCo, AmBev also produces, sells and distributes its own soft drinks. Its main carbonated soft drinks brand is Guaraná Antarctica.

In the U.S., Anheuser-Busch also produces non-alcoholic malt beverage products, including O’Doul’s and O’Doul’s Amber, energy drinks and related products. On a limited basis, we have also entered into arrangements under which other non-alcoholic products and spirits, including Hansen energy drinks (such as Monster Energy), are distributed and sold in select markets though the Anheuser-Busch distribution network.

The table below sets out the breakdown between our beer and non-beer volumes and revenue.

 

    Beer   Non-Beer   Consolidated
    Six
months
ended
30 June
2009
  2008 (3)   2007 (4)   2006 (4)   Six
months
ended
30 June
2009
  2008 (3)   2007 (4)   2006 (4)   Six
months
ended
30 June
2009
  2008 (3)   2007 (4)   2006 (4)

Volume (1) (million hectoliters)

  180   242   230   212   20   43   41   35   200   285   271   247

Revenue (2) (million USD)

  15,554   21,533   18,103   15,444   2,144   1,974   1,632   1,248   17,698   23,507   19,735   16,692

 

(1)

Volumes include not only brands that we own or license, but also third-party brands that we brew or otherwise produce as a subcontractor and third-party products that we sell through our distribution network, particularly in Western Europe. Our pro-rata share of volumes in Grupo Modelo and Tsingtao are not included in this table.

 

(2)

Gross revenue (turnover) less excise taxes and discounts. In many jurisdictions, excise taxes make up a large proportion of the cost of beer charged to our customers.

 

(3)

The 2008 information in the table above is based on our actual 2008 financial information as reflected in our audited financial information as of, and for the year ended, 31 December 2008, which reflects the contribution of Anheuser-Busch’s operations to our 2008 results from the closing of the Anheuser-Busch acquisition on 18 November 2008.

 

(4)

The 2007 and 2006 information in the table above is based on our actual financial information (as InBev) during those years as reflected in our actual audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Please refer to the AF pages for further details of Anheuser-Busch volumes and revenue prior to the Anheuser-Busch acquisition.

 

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Family Entertainment

On 1 December 2009, we completed the sale of Busch Entertainment Corporation to an entity established by Blackstone Capital Partners V L.P. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions”.

U.S. Packaging

In the U.S., our indirect subsidiary, Metal Container Corporation, manufactures beverage cans at eight plants and beverage can lids at three plants for sale to our Anheuser-Busch beer operations and U.S. soft drink customers. Anheuser-Busch also owns a recycling business, which buys and sells used beverage containers and recycles aluminium and plastic containers; a manufacturer of crown liner materials for sale to our North American beer operations; and a glass manufacturing plant which manufactures glass bottles for use by our North American beer operations.

The packaging industry is highly competitive. Metal Container Corporation’s competitors include Ball Corporation, Rexam Corporation, and Crown Holdings. In addition, the can industry faces competition from other beverage containers, such as glass and plastic bottles.

On 1 October 2009, we completed the sale of four metal beverage can and lid manufacturing plants of Metal Container Corporation to Ball Corporation. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions”.

MAIN MARKETS

We are a global brewer, with sales in over 130 countries across the globe.

The last two decades have been characterised by rapid external growth in fast-growing emerging markets, notably in regions in Latin America North, Central & Eastern Europe, Asia Pacific and Latin America South, where we have significant sales. The table below sets out our volumes broken down by business zone for the periods shown:

 

    Six months ended
30 June 2009
    2008 Pro-Forma (1)     2008 Reported (2)     2007 (3)     2006 (3)  

Market

  Volumes
(million
hectoliters)
  Volumes
(% of
total)
    Volumes
(million
hectoliters)
  Volumes
(% of
total)
    Volumes
(million
hectoliters)
  Volumes
(% of
total)
    Volumes
(million
hectoliters)
  Volumes
(% of
total)
    Volumes
(million
hectoliters)
  Volumes
(% of
total)
 

North America

  69   34.4   140   33.8   27   9.5   13   4.8   14   5.7

Latin America North

  50   24.9   102   24.5   102   35.8   101   37.3   95   38.5

Latin America South

  16   7.9   34   8.2   34   11.9   31   11.4   23   9.3

Western Europe

  16   8.2   35   8.4   34   11.9   36   13.3   39   15.8

Central & Eastern Europe

  21   10.4   46   11.0   46   16.1   49   18.1   43   17.4

Asia Pacific

  26   13.0   56   13.4   37   13.0   36   13.3   31   12.6

Global Export & Holding Companies

  2   1.2   3   0.7   5   1.8   5   1.8   2   0.7
                                                 

Total

  200   100   416   100   285   100   271   100   247   100
                                                 

 

(1)

The 2008 pro-forma information in the table above is based on the pro-forma information for our combined company for the year ended 31 December 2008.

 

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(2)

The 2008 reported information in the table above is based on our actual 2008 financial information as of, and for the year ended, 31 December 2008, and reflects the contribution of Anheuser-Busch’s operations to our 2008 results from the closing of the Anheuser-Busch acquisition on 18 November 2008.

 

(3)

The 2007 and 2006 information in the table above is based on our actual audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Please refer to the AF pages for further details of Anheuser-Busch volumes prior to the Anheuser-Busch acquisition.

Our North American zone generated 9.6 million hectoliters in the first nine months of 2008 (equivalent to 4.8% of our consolidated volumes). As a result of the Anheuser-Busch acquisition, the relative share of our North America zone in our consolidated volumes and revenue has increased and the North America zone is now our largest business zone. Our pro-forma consolidated volumes for North America as a combined company for 2008 represented 140 million hectoliters (equivalent to 33.8% of our consolidated volumes).

On an individual country basis, our 10 largest markets by volume during the six months ended 30 June 2009 were the United States, Brazil, China, Argentina, Russia, Ukraine, the United Kingdom, Canada, Germany and South Korea. Each market has its own dynamics and customer preferences and values. Given the breadth of our portfolio, we believe we are well placed and can launch, relaunch, market and ultimately sell the beer that best addresses consumer choice in the various segments (premium, mainstream and value) in a given market.

We are committed to innovation generated from consumer insights. Through this approach, we seek to understand the values, lifestyles and preferences of today’s and tomorrow’s consumers, with a view to building fresh appeal and competitive advantage through innovative products and services tailored to meet those needs. See “—Intellectual Property; Research & Development” for further information.

COMPETITION

Historically, brewing was a local industry with only a few players having a substantial international presence. Larger brewing companies often obtained an international footprint through direct exports, licensing agreements and joint venture arrangements. However, the last couple of decades have seen a transformation of the industry, with a prolonged period of consolidation. This trend started within the more established beer markets of Western Europe and North America, and took the form of larger businesses being formed through merger and acquisition activity within national markets. More recently, consolidation has also taken place within emerging markets. Over the last decade, the global consolidation process has accelerated, with acquisitive brewing groups making significant acquisitions outside of their domestic markets and increasingly looking to purchase other regional brewing organisations. Recent examples of this trend include SABMiller’s acquisition of Bavaria in 2005 and the acquisition of Scottish & Newcastle by Carlsberg and Heineken in April 2008. As a result of this consolidation process, the absolute and relative size of the world’s largest brewers has increased substantially. Therefore, today’s leading international brewers have significantly more diversified operations and have established leading positions in a number of international markets.

We have participated in this consolidation trend, and have grown our international footprint through a series of mergers and acquisitions described in “—General Overview—History and Development of the Company”, which include:

 

   

The acquisition of Labatt in 1995;

 

   

The acquisition of Beck’s in 2001;

 

   

The combination of AmBev and Quilmes Industrial S.A. in 2002;

 

   

The creation of InBev in 2004, through the merger of Interbrew and AmBev; and

 

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The Anheuser-Busch acquisition.

The ten largest brewers in the world in 2008 in terms of volume (2008 provisional pro-forma) are as set out in the table (1) below.

 

Rank

  

Name

   Volume
(million
hectoliters) (2)
1    AB InBev    372.8
2    SABMiller    236.7
3    Heineken    168.8
4    Carlsberg    124.1
5    Molson Coors Brewing Company    57.2
6    Grupo Modelo    53.8
7    Tsingtao (Group)    51.5
8    Beijing Yanjing    42.2
9    FEMSA    41.1
10    Kirin    34.0

 

(1)

Source: Plato Logic Limited (including the 2008 volume information for us in the table above). Our own determination is that the pro-forma volumes for InBev and Anheuser-Busch as a combined company for 2008 would have been 416 million hectoliters, as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Year Ended 31 December 2008 Compared to Year Ended 31 December 2007”.

 

(2)

Calendar year basis.

In each of our regional markets, we compete against a mixture of national, regional, local, and imported beer brands. In Latin America, we compete mainly with local players and local beer brands. In North America, Western Europe, Eastern Europe and Asia/Pacific, we compete primarily with large leading international or regional brewers and international or regional brands.

In the U.S., our beers are distributed and sold in competition with other beers distributed nationally, locally and regionally in the U.S., and with other imported beers. Although the methods of competition in the industry vary widely, in part due to differences in applicable state laws, the principal methods of competition are product quality, taste and freshness, packaging, price, advertising (including television, radio, sponsorships, billboards, stadium signs, and print media), point-of-sale materials, and service to retail customers. Major competitors in the United States brewing industry include MillerCoors, a joint venture of SAB Miller and Molson Coors Brewing Company, Grupo Modelo, and Heineken. In addition to competing with the other brewers’ brands, Anheuser-Busch’s beer brands must also compete in the marketplace with other types of alcoholic beverage choices available to consumers.

WEATHER AND SEASONALITY

For information on how weather affects consumption of our products and the seasonality of our business, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations —A. Key Factors Affecting Results of Operations—Weather and Seasonality”.

BREWING PROCESS; RAW MATERIALS AND PACKAGING; PRODUCTION FACILITIES; LOGISTICS

Brewing Process

The basic brewing process for most beers is straightforward, but significant know-how is involved in quality and cost control. The most important stages are brewing and fermentation, followed by maturation,

 

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filtering and packaging. Although malted barley (malt) is the primary ingredient, other grains such as unmalted barley, corn, rice or wheat are sometimes added to produce different beer flavours. The proportion and choice of other raw materials varies according to regional taste preferences and the type of beer.

The first step in the brewing process is making wort by mixing malt with warm water and then gradually heating it to around 75°C in large mash tuns to dissolve the starch and transform it into a mixture, called “mash”, of maltose and other sugars. The spent grains are filtered out and the liquid, now called “wort”, is boiled. Hops are added at this point to give a special bitter taste and aroma to the beer, and help preserve it. The wort is boiled for one to two hours to sterilise and concentrate it, and extract the flavour from the hops. Cooling follows, using a heat exchanger. The hopped wort is saturated with air or oxygen, essential for the growth of the yeast in the next stage.

Yeast is a micro-organism that turns the sugar in the wort into alcohol and carbon dioxide. This process of fermentation takes five to 11 days, after which the wort has finally become beer. Different types of beer are made using different strains of yeast and wort compositions. In some yeast varieties, the cells rise to the top at the end of fermentation. Ales and wheat beers are brewed in this way. Lagers are made using yeast cells that settle to the bottom. Some special Belgian beers, called lambic or gueuze, use yet another method where fermentation relies on spontaneous action by airborne yeasts.

During the maturation process the liquid clarifies as yeast and other particles settle. Further filtering gives the beer more clarity. Maturation varies by type of beer and can take as long as three weeks. Then the beer is ready for packaging in kegs, cans or bottles.

Raw Materials and Packaging

The main raw materials used in our beer production are malted barley, corn grits, corn syrup, rice, yeast, hops and water. For non-beer production (mainly carbonated soft drinks) the main ingredients are flavoured concentrate, fruit concentrate, sugar or sweetener and water. In addition to these inputs into our products, delivery of our products to consumers requires extensive use of packaging materials such as glass or PET plastic bottles, aluminium or steel cans and kegs, labels, bottle caps, plastic crates, metal closures, plastic closures, preforms and cardboard products.

We use only our own proprietary yeast, which we grow in our facilities. In some regions, we import hops to obtain adequate quality and appropriate variety. We purchase these ingredients through the open market and through contracts with suppliers. We also purchase barley and process it to meet our malt requirements at our malting plants.

Prices and sources of raw materials are determined by, among other factors:

 

   

the level of crop production;

 

   

weather conditions;

 

   

export demand; and

 

   

governmental regulations.

We are reducing the number of our suppliers in each region to develop closer relationships that allow for lower prices and better service, while at the same time ensuring that we are not entirely dependent on a single supplier. We hedge some of our commodities contracts on the financial markets and some of our malt requirements are purchased on the spot market. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk—Market Risk, Hedging and Financial Instruments” and note 30 to our audited financial information as of 31 December 2008 and 2007, and for the three years ended 31 December 2008, for further details on commodities hedging.

 

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We have supply contracts with respect to most packaging material as well as our own production capacity as outlined below in “—Production Facilities”. The choice of packaging materials varies by cost and availability in different regions, as well as consumer preferences and the image of each brand. We also use aluminium cansheet for the production of beverage cans and lids. For details of the U.S. packaging business, see “—Principal Activities and Products—U.S. Packaging”.

Hops, PET resin, soda ash for our own glass plant and—to some extent—cans are mainly sourced globally. Malt, adjuncts (such as unmalted grains or fruit), sugar, steel, cans, labels, metal closures, plastic closures, preforms and folding carton are sourced regionally. Electricity is sourced nationally, while water is sourced locally, for example, from municipal water systems and private wells.

We use natural gas and fuel oil as our primary fuel materials, and we believe adequate supplies of fuel and electricity are available for the conduct of our business. The energy commodity markets have experienced and can be expected to continue to experience significant price volatility. We manage our energy costs using various methods including supply contracts, hedging techniques, and fuel switching.

Production Facilities

Our production facilities are spread across our six geographic regions, giving us a balanced geographical footprint in terms of production and allowing us to efficiently meet customer demand across the globe. We manage our production capacity across our geographic regions, countries and plants. We typically own our production facilities free of any major encumbrances. We also lease a number of warehouses and other commercial buildings from third parties.

Beverage Production Facilities

Our beverage production facilities comprised 147 breweries and/or soft drink plants as of 31 December 2008 spread across our six geographic regions. Of these 147 plants, 119 produced only beer, 15 produced only soft drinks and 13 produced both beer and soft drinks. Except in limited cases (for example, our Hoegaarden brewery in Belgium), our breweries are not dedicated to one single brand of beer. This allows us to allocate production capacity efficiently within our group.

The table below sets out, for each of our business zones in 2008, the number of our beverage production plants (breweries and/or soft drink plants) as well as the plants’ overall capacity and production volumes.

 

          2008 volumes    Annual operational
capacity as of

31 December 2008

Business zone

   Number of
plants
   Beer (khl)    Soft drinks
(khl)
   Beer (khl)     Soft drinks
(khl)

North America

   19    138,300       139,600 (1)    

Latin America North

   35    73,400    28,000    88,772      49,530

Latin America South

   21    20,500    13,300    21,091      15,912

Western Europe (2)

   16    35,000       49,056     

Central & Eastern Europe

   24    46,100       63,465     

Asia Pacific (3)(4)(5)

   32    56,900       64,493     
                         

Total

   147    370,200    41,300    426,477      65,442
                         

 

(1)

Internal company estimate.

 

(2)

Includes the Stag Brewery near London, England, the closure of which was announced in 2008 and is expected to occur in the coming years.

 

(3)

Includes a brewery in Wuhan owned and operated by a joint venture in which we have a 97% equity interest and three breweries in which we hold a majority interest through our wholly-owned subsidiary, Harbin Brewery Group Limited. Also includes the Jilin brewery in China, which was closed during the first quarter of 2009.

 

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(4)

Excludes our 50% equity interest in a joint venture that owns and operates a brewery in Hyderabad, India.

 

(5)

On 24 July 2009, we completed the previously announced sale of Oriental Brewery to an affiliate of KKR. For additional detail, see “—General Overview—History and Development of the Company”. Volumes in the table above are inclusive of these operations.

Non-Beverage Production Facilities

Our beverage production plants are supplemented and supported by a number of plants and other facilities that produce raw materials and packaging materials for our beverages. The table below provides additional detail on these facilities at 31 December 2008.

 

Type of plant / facility

  

Number of plants /facilities

  

Countries in which plants / facilities are located

Malt plants

   17    Brazil, Argentina, Uruguay, Romania, Russia, Hungary, Bulgaria, United States

Rice mills

   2    United States

Hop farms

   2    Germany, United States

Hop pellet plant

   1    Argentina

Guaraná farm

   1    Brazil

Glass manufacturing plant

   1    United States

Glass bottle plants

   3    United States, Brazil, Paraguay

Bottle cap plant

   2    Argentina, Brazil

Label plant

   1    Brazil

Can plants

   9    Bolivia, United States (1)

Can lid manufacturing plants

   3    United States

Crown and closure liner material plant

   1    United States

Aluminium and plastic recycling plant

   1    United States

Syrup plant

   1    Brazil

 

(1)

For details of our sale in October 2009 of four metal beverage can and lid manufacturing plants from our US metal packaging subsidiary, Metal Container Corporation, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions”.

In addition to production facilities, we also maintain a geographical footprint in key markets through sales offices and distribution centres. Such offices and centres are opened as needs in the various markets arise.

Capacity Expansion

We continually assess whether our production footprint is adequate in view of existing or potential customer demand. Footprint optimisation by adding new plants to our portfolio not only allows us to boost production capacity, but the strategic location often also reduces distribution time so that our products reach consumers rapidly and efficiently. Conversely, footprint optimisation can lead to the divesting of plants through sales to third parties or to plant closures, as was the case with the Stag brewery in the United Kingdom and the Jilin brewery in China.

Additional production facilities can be acquired from third parties or through greenfield investments in new projects. For example, in April 2009 our Angarsk brewery, constructed at a cost of USD 244 million, was opened in Angarsk, Russia. The plant has an annual capacity of 1.8 million hectoliters and produces brands including Sibirskaya Korona, Klinskoye, Tolstyak and Zolotaya Angara. Similarly, in March 2007 we set up a new greenfield brewery in Foshan in the Guangdong province of China. The brewery started trial brewing in November 2008, and formal production started in March 2009. The brewery, constructed at a cost of USD 78 million and with an annual capacity of 2.0 million hectoliters, will support our Budweiser sales in the Southeast part of China. In Sete Lagoas (Nova Minas) Brazil a new plant constructed at a cost of USD 88 million entered into operation in June 2009. The plant, with an annual capacity of 2.1 million hectoliters, is currently

 

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brewing beer and will later produce soft drinks as well. The plant currently brews the Brahma, Skol, Antarctica and Bohemia brands of beer, which are sold in glass bottles. An additional USD 12.7 million is expected to be invested to add a canning line to package the Brahma, Skol and Antarctica beer brands in cans. In addition to building or acquiring additional facilities, we also upgrade our existing facilities and expand capacity.

We also outsource, to a limited extent, the production of items which we are unable to produce in our own production network (for example, due to a lack of capacity during seasonal peaks) or for which we do not yet want to invest in new production facilities (for example, to launch a new product without incurring the associated full start-up costs). Such outsourcing mainly relates to secondary repackaging materials that we cannot practicably produce on our own, in which case our products are sent to external companies for repackaging (for example, gift packs with different types of beers).

Logistics

Our logistics organisation is composed of (i) a first tier, which comprises all inbound flows into the plants of raw materials and packaging materials and all the outbound flows from the plants into the second drop point in the chain (for example, distribution centres, warehouses or wholesalers) and (ii) a second tier, which comprises all distribution flows from the second drop point into the customer delivery tier (for example, pubs or retailers).

Transportation is mainly outsourced to third-party contractors, although we do own a small fleet of vehicles.

Each of our breweries has a warehouse which is attached to its production facilities. In places where our warehouse capacity is limited, external warehouses are rented. We strive to centralise fixed costs, which has resulted in some plants sharing warehouse and other facilities with each other.

Where it has been implemented, the VPO programme has had a direct impact on our logistics organisation for example, in respect of scheduling, warehouse productivity and loss prevention actions.

DISTRIBUTION OF PRODUCTS

We depend on effective distribution networks to deliver products to our customers. We review our priority markets for distribution and licensing agreements on an annual basis. The focus markets will typically be markets with an interesting premium segment and with sound and strong partners (brewers and/or importers). Based on these criteria, focus markets are then chosen.

In addition, the distribution of beer varies from country to country and from region to region. The nature of distribution reflects consumption patterns and market structure, geographical density of customers, local regulation, the structure of the local retail sector, scale considerations, market share, expected added-value and capital returns, and the existence of third-party wholesalers or distributors. In some markets brewers distribute directly to customers (for example Belgium and France), while in other markets wholesalers may, for legal reasons (for example, certain U.S. states and Canada where there may be legal constraints on the ability of a beer manufacturer to own a wholesaler – a so-called three-tier system), or because of historical market practice (for example, Russia and Argentina), play an important role in distributing a significant proportion of beer to customers. In some instances, as is currently the case in Brazil, we have acquired third-party distributors to move away from distribution by way of wholesalers to direct distribution. The products we brew in the United States are sold to approximately 550 wholesalers for resale to retailers. We own 11 of these wholesalers and have minority interests in another six of them. The remaining wholesalers are independent businesses. In Mexico, Budweiser, Bud Light and O’Doul’s are imported and distributed by a wholly-owned subsidiary of Grupo Modelo. Under the distribution agreement with Grupo Modelo, it has exclusive distribution rights to those brands in all of Mexico. In return it agrees not to sell Budweiser, Bud Light and O’Doul’s outside of Mexico, and not to sell in Mexico any other beer that is brewed outside of Mexico. In certain countries, we enter into exclusive importer arrangements and depend on our counterparties to these arrangements to market and distribute our products to points of sale. In certain markets we also distribute the products of other brewers.

 

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We generally distribute our products through (i) direct distribution networks, in which we deliver to points of sale directly, and (ii) indirect distribution networks, in which delivery to points of sale occurs through wholesalers and independent distributors. Indirect distribution networks may be exclusive or non-exclusive and may, in certain business zones, involve use of third-party distribution while we retain the sales function through an agency framework. We seek to fully manage the sales teams in each of our markets. In case of non-exclusive distributorships, we try to encourage best practices through wholesaler excellence programmes.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Results of Operations—Distribution Arrangements” for a discussion of the effect of the choice of distribution arrangements on our results of operations.

As a customer-driven organisation, we have, regardless of the chosen distribution method, programmes for professional relationship building with our customers in all markets. This happens directly, for example, by way of key customer account management, and indirectly by way of wholesaler excellence programmes.

We seek to provide media advertising, point-of-sale advertising, and sales promotion programmes to promote our brands. Where relevant, we complement national brand strategies with geographic marketing teams focused on delivering relevant programming addressing local interests and opportunities.

LICENSING

In markets where we have no local affiliate, we may choose to enter into licence agreements or alternatively international distribution agreements, depending on the best strategic fit for each particular market. Licence agreements issued by us grant the right to third-party licensees to manufacture, package, sell and market one or several of our brands in a particular assigned territory under strict rules and technical requirements. In the case of international distribution agreements, we produce and package the products ourselves while the third party distributes, markets and sells the brands in the local market.

Stella Artois is licensed to third parties in Algeria, Australia, New Zealand, Tanzania, South Africa and Greece, while Beck’s is licensed to third parties in Algeria, Turkey, Australia, New Zealand, Tunisia, Nigeria and Mauritius.

On 1 January 1998, Labatt Brewing Company Limited, one of our indirect subsidiaries, entered into long-term licensing agreements with Anheuser-Busch, Inc., one of our subsidiaries, for the latter’s Budweiser and Bud Light brands. The licensing agreements between Labatt and Anheuser-Busch, Inc. grant Labatt the right to manufacture, package, sell and distribute these brands in Canada, using Anheuser-Busch, Inc.’s trademarks, trade secrets and know-how relative to the manufacturing of the brands and provide marketing spending commitments designed to grow the brands in Canada. In addition, in 2002 Labatt and Anheuser-Busch, Inc. entered into medium-term licensing agreements for Busch and Busch Light brands. The parties also entered into supplemental shared marketing spend agreements on Budweiser and Bud Light and share Canadian National Football League sponsorship rights fees through 2011. In 2008 Anheuser-Busch brands sold by Labatt in Canada represented approximately 41% of Labatt’s total sales volumes.

In Japan, Budweiser is brewed and sold through a license agreement with Kirin Brewery Company, Limited. A licensing agreement allows Guinness Ireland Limited to brew and sell Budweiser and Bud Light in the Republic of Ireland. Budweiser is also brewed under license and sold by brewers in Spain (Sociedad Anonima Damm) and Panama (Heineken). Through Anheuser-Busch we own a 4.6% stake in a subsidiary in Argentina of Compañía Cervecerías Unidas S.A., a leading Chilean brewer, which brews and distributes Budweiser under license in Argentina and distributes Budweiser in Chile and Uruguay. In Italy, Budweiser is brewed by Heineken, though we have retained exclusive sales, marketing and distribution rights. We also sell various brands, including Budweiser and Bud Light, by exporting from our license partners’ breweries located in Argentina and Spain.

 

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On 24 July 2009, we completed the previously announced sale of our South Korean subsidiary, Oriental Brewery, to an affiliate of KKR for USD 1.8 billion, which resulted in USD 1.5 billion of cash proceeds at closing. Under the terms of the agreement, we granted Oriental Brewery exclusive licenses to distribute certain brands in South Korea including Budweiser, Bud Ice and Hoegaarden.

See “Risk Factors—Risks Relating to our Business—We rely on key third parties, including key suppliers, and the termination or modification of the arrangements with such third parties could negatively affect our business.”

We also manufacture and distribute other third-party brands. AmBev, our listed Brazilian subsidiary, and some of our other subsidiaries have entered into agreements with PepsiCo. Pursuant to the agreements between AmBev and PepsiCo, AmBev is PepsiCo’s second largest bottler in the world and the largest bottler outside of the United States. Major brands that are distributed under this agreement are Pepsi, 7UP and Gatorade. See “—Principal Activities and Products—Soft Drinks” for further information in this respect.

BRANDING AND MARKETING

Our brands are our foundation, the cornerstone of our relationships with consumers and the key to our long-term success. Our brand portfolio, its enduring bonds with consumers and its partnerships with customers are our most important assets. We invest in our brands to create long-term, sustainable, competitive advantage by seeking to meet the beverage needs of consumers around the world and to develop leading brand positions in every market in which we operate.

Our brand portfolio consists of global flagship brands (Budweiser, Stella Artois and Beck’s), multi-country brands (Leffe and Hoegaarden) and many “local champions” (Jupiler, Skol, Quilmes, Bud Light, Sibirskaya Korona and Sedrin to name but a few). We believe this global brand portfolio provides us with strong growth and revenue opportunities and, coupled with a powerful range of premium brands, positions us well to meet the needs of consumers in each of the markets in which we compete. For further information about our focus brands, see “—Principal Activities and Products—Beer”.

We have established a “focus brands” strategy. Focus brands are those in which we invest the majority of our resources (money, people, and attention). They are a small group of brands which we believe have growth potential within each relevant consumer group. These focus brands include our three global brands, key multi-country brands and selected “local champions”. As of 30 June 2009, our focus brands accounted for approximately two-thirds of our volume.

We seek to constantly strengthen and develop our brand portfolio through enhancement of brand quality, marketing and product innovation. Our marketing team therefore works together closely with our research & development team (see “—Intellectual Property; Research & Development” for further information).

We continually assess consumer needs and values in each geographic market in which we operate with a view to identifying the key characteristics of consumers in each beer segment (that is, premium, core and value). This allows us to position our existing brands (or to introduce new brands) in order to address the characteristics of each segment.

Our marketing approach is based on a “value based brands” approach. A value based brands proposition is a single, clear, compelling values based reason for consumer preference. We have defined 37 different consumer values (such as ambition, authenticity or friendship) to establish a connection between consumers and our products. The value based brands approach first involves the determination of consumer portraits, secondly brand attributes (that is, tangible characteristics of the brand that support the brand’s positioning) and brand personality (that is, the way the brand would behave as a person) are defined, and finally a positioning statement to help ensure the link between the consumer and the brand is made. Once this link has been established, a particular brand can either be developed (brand innovation) or re-launched (brand renovation or line extension

 

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from the existing brand portfolio) to meet the customers’ needs. We apply Zero-Based Budgeting principles for yearly budget decisions and for ongoing investment reviews and reallocations. We invest in each brand in line with its local or global strategic priority and taking into account its local circumstances, seeking to maximise profitable and sustainable growth.

Anheuser-Busch owns rights to its principal brand names and trademarks in the U.S. in perpetuity.

INTELLECTUAL PROPERTY; RESEARCH & DEVELOPMENT

Innovation is one of the key factors enabling us to achieve our strategy. We seek to combine technological know-how with market understanding to develop a healthy innovation pipeline in terms of production process, product and packaging features as well as branding strategy. In addition, as beer markets mature, innovations play an increasingly important role in driving value growth.

Intellectual Property

Our intellectual property portfolio mainly consists of trademarks, patents, registered designs, copyright, know-how and domain names. This intellectual property portfolio is managed by our internal legal department, in collaboration with a selected network of external intellectual property advisors. We place importance on achieving close cooperation between our intellectual property team and our marketing and research & development teams. An internal stage gate process promotes the protection of our intellectual property rights, the swift progress of our innovation projects and the development of products that can be launched and marketed without infringing any third parties’ intellectual property rights. A project can only move on to the next step of its development after the necessary verifications (for example, availability of trademark, existence of prior technology/earlier patents, freedom to market) have been carried out. This internal process is designed to ensure that financial and other resources are not lost due to oversights in relation to intellectual property protection during the development process.

Our patent portfolio is carefully built to gain a competitive advantage and support our innovation and other intellectual assets. We currently have more than 100 patent families, meaning that more than 100 different technologies are protected by patents. The extent of the protection differs between technologies, as some patents are protected in many jurisdictions, while others are only protected in one or a few jurisdictions. Our patents may relate, for example, to brewing processes, improvements in production of fermented malt-based beverages, treatments for improved beer flavour stability, non-alcoholic beer development, filtration processes, beverage dispensing systems and devices or beer packaging.

One of the key technologies supporting our innovation strategy is PerfectDraft, a home beer dispensing appliance developed by us with Koninklijke Philips Electronics N.V. and Philips Consumer Electronics BV. The intellectual property rights to the PerfectDraft technology, name and design are co-owned by us and Koninklijke Philips Electronics N.V.

We license in limited technology from third parties. We also license out certain of our intellectual property to third parties, for which we receive royalties.

Research & Development

Given our focus on innovation, we place a high value on R&D. In 2008 we expensed USD 75 million (USD 27 million in 2007 and USD 21 million in 2006) in the area of market research and on innovation in the areas of process optimisation and product development, mainly in our Belgian R&D centre.

R&D in process optimisation is primarily aimed at capacity increase (plant debottlenecking and addressing volume issues, while minimising capital expenditure), quality improvement and cost management. Newly developed processes, materials and/or equipment are documented in best practices and shared across business zones. Current projects range from malting to bottling of finished products.

 

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R&D in product innovation covers liquid, packaging and draft innovation. Product innovation consists of breakthrough innovation, incremental innovation and renovation (that is, implementation of existing technology). The main goal for the innovation process is to provide consumers with better products and experiences. This implies launching new liquid, new packaging and new draught products that deliver better performance both for the consumer and in terms of financial results, by increasing our competitiveness in the relevant markets. With consumers comparing products and experiences offered across very different drink categories and the offering of beverages increasing, our R&D efforts also require an understanding of the strengths and weaknesses of other drink categories, spotting opportunities for beer and developing consumer solutions (products) that better address consumer needs and deliver better experiences. This requires first understanding consumer emotions and expectations in order to guide our innovation efforts. Sensory experience, premiumisation, convenience, sustainability and design are all central to our R&D efforts.

Knowledge management and learning is also an integral part of R&D. We seek to continuously increase our knowledge through collaborations with universities and other industries.

Our R&D team is briefed annually on our business zones’ priorities and approves concepts which are subsequently prioritised for development. Launch time, depending on complexity and prioritisation, usually falls within the next calendar year.

In November 2006 we opened the doors of our Global Innovation and Technology Centre in Leuven. This state of the art building accommodates the Packaging, Product, Process Development teams and facilities such as Labs, Experimental Brewery and the European Central Lab, which also includes Sensory Analysis.

In addition to our Global Innovation and Technology Centre, we also have Product, Packaging and Process development teams located in each of our six geographic regions focusing on the short-term needs of such regions.

REGULATIONS AFFECTING OUR BUSINESS

Our worldwide operations are subject to extensive regulatory requirements regarding, among other things, production, distribution, importation, marketing, promotion, labeling, advertising, labour, pensions and public health, consumer protection and environmental issues. In the United States, federal and state law regulate most aspects of the brewing, sale, marketing, labeling and wholesaling of our products. At the federal level, the Alcohol & Tobacco Tax & Trade Bureau of the U.S. Treasury Department oversees the industry, and each state in which we sell or produce products and some local authorities in jurisdictions in which we sell products also have regulations that affect the business conducted by us and other brewers and wholesalers. It is our policy to abide by the laws and regulations around the world that apply to us or to our business. We rely on legal and operational compliance programmes, as well as local in-house and external counsel, to guide businesses in complying with applicable laws and regulations of the countries in which we operate.

See “Risk Factors—Risks Relating to Our Business—Certain of our operations depend on independent distributors or wholesalers to sell our products.”, “Risk Factors—Risks Relating to Our Business—Negative publicity may harm our business.”, “Risk Factors—Risks Relating to Our Business—We could incur significant costs as a result of compliance with, and/or violations of or liabilities under various regulations that govern our operations.”, “Risk Factors—Risks Relating to Our Business—Our operations are subject to environmental regulations, which could expose us to significant compliance costs and litigation relating to environmental issues.”, “Risk Factors—Risks Relating to Our Business—We operate a joint venture in Cuba, in which the Government of Cuba is our joint venture partner. Cuba has been identified by the U.S. Department of State as a state sponsor of terrorism and is targeted by broad and comprehensive economic and trade sanctions of the United States. Our operations in Cuba may adversely affect our reputation and the liquidity and value of our securities.”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Results of Operations—Governmental Regulations”.

 

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Advertising, marketing and sales of alcoholic beverages are subject to various restrictions in markets around the world. These range from a complete prohibition of alcohol in certain countries and cultures, through the prohibition of the import of alcohol, to restrictions on the advertising style, media and messages used. In a number of countries, television is a prohibited medium for advertising alcoholic products, and in other countries, television advertising, while permitted, is carefully regulated. Media restrictions may constrain our brand building potential. Labelling of our products is also regulated in certain markets, varying from health warning labels to importer identification, alcohol strength and other consumer information. Specific warning statements related to the risks of drinking alcoholic products, including beer, have also become increasingly prevalent in recent years. Smoking bans recently introduced in pubs and restaurants in Western Europe have negative effects on on-trade consumption (that is, beer purchased for consumption in a pub or restaurant or similar retail establishment), as opposed to off-trade consumption (that is, beer purchased at a retail outlet for consumption at home or another location).

The distribution of our beer products may also be regulated. In certain markets, alcohol may only be sold through licensed outlets, varying from government or state operated monopoly outlets (for example in the off-trade channel of certain Canadian provinces) to the common system of licensed on-trade outlets (for example licensed bars and restaurants) which prevails in many countries (for example in much of the European Union). In most U.S. states, applicable regulations impose a three-tier system from brewer to wholesaler to retailer, meaning that we cannot use our own direct distribution system but must work with third-party distributors to distribute our products to the points of connection.

In the United States, both federal and state laws generally prohibit us from providing anything of value to retailers, including paying slotting fees or holding ownership interests in retailers. Some states prohibit us from acting as a wholesaler for our own products. State laws also regulate the interactions among us, our wholesalers and consumers by, for example, limiting merchandise that can be provided to consumers or limiting promotional activities that can be held at retailer premises. If we were found to have violated applicable federal or state alcoholic beverage laws, we could be subject to a variety of sanctions, including fines, equitable relief and suspension or permanent revocation of our license to brew or wholesale our products.

Governments in most of the countries in which we operate also establish minimum legal drinking ages, which generally vary from 16 to 21 years, impose minimum prices on beer products or impose other restrictions on sales, which affect demand for our products. Moreover, governments may respond to public pressure to curtail alcohol consumption by raising the legal drinking age, further limiting the number, type or operating hours of retail outlets or expanding retail licensing requirements. We work both independently and together with other breweries to limit the negative consequences of inappropriate use of alcoholic products, and actively promote responsible sales and consumption.

Similarly, governmental bodies may respond to public pressure to address obesity by curtailing soft drink consumption at schools and other government-owned facilities.

We are subject to antitrust and competition laws in the jurisdictions in which we operate and may be subject to regulatory scrutiny in certain of these jurisdictions, including due to our size and market share in such jurisdictions. See “Risk Factors—Risks Relating to Our Business—We are exposed to antitrust and competition laws in certain jurisdictions and the risk of changes in such laws or in the interpretation and enforcement of existing antitrust and competition laws.”

In many jurisdictions, excise and other indirect duties make up a large proportion of the cost of beer charged to customers. In the United States, for example, the brewing industry is subject to significant taxation. The United States federal government currently levies an excise tax of $18 per barrel (equivalent to 1.1734776 hectoliters) of beer sold for consumption in the United States. All states also levy excise taxes on alcoholic beverages. Proposals have been made to increase the federal excise tax as well as the excise taxes in some states. Rising excise duties can drive our pricing to the consumer up, which in turn could have a negative impact on our results of operations. See “Risk Factors—Risks Relating to Our Business—The beer and beverage industry may be subject to changes in taxation.”

 

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Our products are generally sold in glass or PET bottles or aluminium or steel cans. Legal requirements apply in various jurisdictions in which we operate, requiring that deposits or certain ecotaxes or fees are charged for the sale, marketing and use of certain non-refillable beverage containers. The precise requirements imposed by these measures vary. Other types of beverage container-related deposit, recycling, ecotax and/or product stewardship statutes and regulations also apply in various jurisdictions in which we operate.

We are subject to different environmental legislation and controls in each of the countries in which we operate. Environmental laws in the countries in which we operate are mostly related to (i) the conformity of our operating procedures with environmental standards regarding, among other things, the emission of gas and liquid effluents and (ii) the disposal of one-way (that is, non-returnable) packaging. We believe that the regulatory climate in most countries in which we operate is becoming increasingly strict with respect to environmental issues and expect this trend to continue in the future. Achieving compliance with applicable environmental standards and legislation may require plant modifications and capital expenditure. Laws and regulations may also limit noise levels and the discharge of waste products, as well as impose waste treatment and disposal requirements. Some of the jurisdictions in which we operate have laws and regulations that require polluters or site owners or occupants to clean up contamination.

The Anheuser-Busch facilities in the U.S. are subject to federal, state and local environmental protection laws and regulations. We comply with these laws and regulations or are currently taking action to comply with them. Our compliance with environmental laws and regulations is not expected to materially affect our capital expenditures, earnings or competitive position.

Certain U.S. states and various countries have adopted laws and regulations that require deposits on beverages or establish refillable bottle systems. Such laws generally increase beer prices above the costs of deposit and may result in sales declines. The United States Congress and other states continue to consider similar legislation, the adoption of which would impose higher operating costs on us while depressing sales volume.

The amount of dividends payable to us by our operating subsidiaries is, in certain countries, subject to exchange control restrictions of the respective jurisdictions where those subsidiaries are organised and operate. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Transfers from Subsidiaries”.

INSURANCE

We maintain comprehensive insurance policies with respect to casualty, property and certain specialised coverage. Our insurance programme is mainly divided into two general categories:

 

   

Assets: these insurance policies cover our physical properties and include global property and business interruption. Additionally we have a constructor all risk policy for projects.

 

   

Liabilities: these insurance policies cover losses due to damages caused to third parties and include general and product liability, executive risks (risks related to our management) and driver’s insurance (which is taken out in accordance with local requirements).

We believe we have adequate insurance cover taking into account our market capitalisation and our worldwide presence. We further believe that the level of insurance we maintain is appropriate for the risks of our business and is comparable to that maintained by other companies in its industry.

 

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GROUP ORGANISATIONAL STRUCTURE

The diagram below shows a simplified legal structure of our group and provides an overview of our main subsidiaries.

LOGO

 

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Our significant subsidiaries (as at 30 June 2009) are:

 

Subsidiary name

   Jurisdiction of
incorporation
or residence
   Proportion
of ownership
interest
   Proportion
of voting
rights
held (1)

Anheuser-Busch Companies, Inc.

        

One Busch Place

   Delaware,      

St. Louis, MO 63118

   U.S.A.    100    100

Companhia de Bebidas das Américas—AmBev

        

Rua Dr. Renato Paes de Barros 1017

        

4° Andar (parte), cj. 44 e 42—Itaim Bibi

        

São Paulo

   Brazil    61.75    74.00

 

(1)

The difference between economic interest and voting interest for AmBev results from the fact that AmBev has issued common shares (with voting rights) and preferred shares (without voting rights).

For a more comprehensive list of our most important financing and operating subsidiaries by country (as at 31 December 2008), see note 36 of our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Post-Acquisition International Restructuring

Having completed the Anheuser-Busch acquisition, we plan to undertake an internal restructuring of a number of our subsidiaries. The restructuring is intended to permit us to take advantage of various efficiencies and will involve, among other things, the transfer of several of our subsidiaries or their assets to other existing or newly formed subsidiaries, or the movement of such subsidiaries to new jurisdictions.

For information on principal capital expenditures and divestitures currently in progress or to which we have committed, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Expenditures”.

LEGAL AND ARBITRATION PROCEEDINGS

Except as set forth below, there have been no governmental, judicial or arbitration proceedings (including any such proceedings which are pending or threatened of which we are aware) during a period covering 12 months prior to the Form F-4 which may have, or have had in the recent past, significant effects on our financial position and profitability.

Anheuser-Busch InBev SA/NV

We have received notice of claims relating to the use by Cerveceria Bucanero S.A., a joint venture in which we participate in Cuba, of a trademark which is alleged to have been confiscated by the Cuban government and trafficked by us through our ownership and management of Cerveceria Bucanero S.A. Although we have attempted to review and evaluate the validity of the claims, due to the uncertain underlying circumstances, we are currently unable to express a view as to the validity of such claims, or as to the standing of the claimants to pursue them.

AmBev and its Subsidiaries

AmBev only makes provisions for litigation in which there is a probable chance of loss. Litigation in which there is only a possible chance of loss is not provisioned, rather the total amount of the risk is disclosed in a note to AmBev’s financial statements.

 

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Tax matters

As of 31 December 2008, AmBev had approximately 3,525 tax claims pending in Brazil, including judicial and administrative proceedings. Most of these claims relate to ICMS ( Imposto sobre Circulação de Mercadorias e Serviços , which is a state value-added tax levied on goods and services), the IPI excise tax, and income tax and social contributions. As of 31 December 2008, AmBev had made provisions of 500.9 million reais in connection with those tax proceedings for which it believes there is a probable chance of loss.

Among the pending tax claims, there are claims filed by AmBev against Brazilian tax authorities alleging that certain taxes are unconstitutional. Such tax proceedings include claims for income taxes, ICMS, IPI and revenue taxes. As these claims are contingent on obtaining favourable judicial decisions, the corresponding assets which might arise in the future are only recorded once it becomes certain that AmBev will receive the amounts previously paid or deposited.

As of 31 December 2008, there were also tax proceedings with a total estimated risk of 5.9 billion reais for which AmBev believes there is a possible chance of loss.

In order to carry out certain activities, including obtaining BNDES financings (that is, by Banco Nacional de Desenvolvimento Econômico e Social , a Brazilian state-owned development bank), certain tax incentives or registering the sale of real estate, AmBev, like other Brazilian corporations, is required to obtain federal and state tax and social security good standing certificates, which are normally valid for six months. In circumstances in which such certificates are not issued by the competent authority on the basis of the existence of tax claims that AmBev believes are without merit or need further information, it has sought court injunctions requesting such certificates to be issued. As of 31 December 2008, AmBev had court bonds ( cartas de fiança ) issued in connection with such injunctions in the amount of approximately 504 million reais. Court bonds are a means provided for by Brazilian law to guarantee amounts under dispute in a given litigation, including the request for injunctive relief. In the event that AmBev loses the litigation, the court bond will be used to pay the amounts owed by AmBev and AmBev will have to reimburse the financial institution that issued such court bond.

Value Added Tax, Excise Tax and Taxes on Net Sales

During 1999, legislation came into effect requiring Brazilian companies to pay income taxes, ICMS, IPI and revenue taxes not only on sales and services net sales, but also on financial income. AmBev has not been paying income taxes, ICMS, IPI and revenue taxes as required by such law, as it has obtained injunctions permitting the non-payment of these additional taxes on the basis that such legislation is unconstitutional. In November 2005, a leading case unrelated to AmBev was adjudicated by the Brazilian Supreme Court in favour of taxpayers. As of 31 December 2008, AmBev had provisions in connection with cases still pending in the amount of 61.8 million reais.

AmBev currently is party to legal proceedings with the State of Rio de Janeiro where it is challenging such State’s attempt to assess ICMS with respect to irrevocable discounts granted by AmBev in January 1996 and February 1998. These proceedings are currently before the Superior Court of Justice and the Brazilian Supreme Court, and involve the amount of approximately 306 million reais as of December 2008, which AmBev has treated as a possible loss. Such estimate is based on reasonable assumptions and assessments of management, but should AmBev lose such proceedings the expected net impact on its statement of operations would be an expense for this amount.

AmBev received in 2007 and 2008 five tax assessments from the State of São Paulo in the amount of approximately 64.7 million reais (updated as of 31 December 2008), challenging the legality of tax credits arising from an existing tax incentive of AmBev in the State of Santa Catarina. AmBev has treated this proceeding as a possible loss. Such estimate is based on reasonable assumptions and assessments of external counsel but should AmBev lose such proceedings the expected net impact on its statement of operations would be an expense for

 

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this amount. Moreover, AmBev cannot rule out the possibility of other Brazilian states issuing similar tax assessments related to AmBev’s tax incentive granted by the State of Santa Catarina.

The State of São Paulo also has challenged in the Brazilian Supreme Court laws enacted by other Brazilian states upon which certain of the above benefits have been granted, on the basis that they constitute tax benefits created without certain approvals required under Brazilian tax laws and regulations, which would render such state laws unconstitutional. Although the Brazilian Supreme Court, in a case unrelated to AmBev, has already declared part of Pará state’s benefit law unconstitutional, almost every state has specific legislation on this topic and even the State of Pará may still grant benefits which were not covered in the decision. In this sense, insofar as the tax benefits are granted based on valid state legislation and the operational requirements are met, most companies apply for and use these benefits when granted.

Between 2000 and 2004, certain third-party distributors of Cintra (as it was then called) obtained preliminary injunctions permitting the non-payment of the IPI. These preliminary injunctions were revoked between 2002 and 2005, and as a result, tax authorities considered Cintra responsible for the payment of IPI during the period in which IPI was not collected by the third-party distributors. In 2007, Cintra received tax assessments from Brazilian federal tax authorities relating to IPI in the total amount, at that time, of approximately 228 million reais. AmBev has provisioned 157 million reais, for the settlement of these cases, with 193 million reais being considered as a possible loss.

Income Tax and Social Contribution

Beginning in 1997, an amendment to the tax laws confirmed the deductibility of interest on shareholders’ equity for social contribution and income tax purposes. Companhia Cervejaria Brahma, which has since been succeeded in a series of corporate restructuring transactions by AmBev, filed a lawsuit with the Federal Courts of the State of Rio de Janeiro requesting the recovery of social contribution taxes previously paid for the fiscal year of 1996. The Federal Court granted Companhia Cervejaria Brahma an injunction recognising the deductibility of payment of interest on shareholders’ equity and, as a result, allowed Companhia Cervejaria Brahma to suspend the payment of social contribution amounts owed in 1999 up to the amount not deducted in 1996 (approximately 50.9 million reais as of 31 December 2008). Notwithstanding the aforesaid suspension of social contribution’s payment, the tax authority filed an administrative proceeding against Companhia Cervejaria Brahma claiming the payment of such amount. Companhia Cervejaria Brahma presented its defence and is waiting for a final decision by the administrative court. Meanwhile, in April 2001, the Federal Appellate Court reversed the Federal Court’s injunction. Though AmBev appealed to the Brazilian Supreme Court in April 2002, its appeal was denied, and, therefore, should AmBev lose on the administrative proceeding, it will be required to pay approximately 50.9 million reais which have been provisioned by AmBev.

During the first quarter of 2005, certain subsidiaries of AmBev received a number of assessments from Brazilian federal tax authorities relating to earnings of its foreign subsidiaries, in the total amount, at that time, of approximately 2.9 billion reais. In December 2008, the Administrative Court decided one of the tax assessments relating to earnings of AmBev’s foreign subsidiaries. This decision was partially favourable to AmBev, but AmBev can still appeal. Based on the advice of external counsel, AmBev has not recorded any provision in connection therewith. After this decision, it has estimated the total exposures of possible losses in relation to these assessments to be approximately 2.682 billion reais as of 31 December 2008.

Labatt

Labatt was assessed by the Canada Revenue Agency for the interest rate used in certain related-party debts and related-party transactions, and other transactions existing prior to the merger of Labatt into AmBev. As of 31 December 2008, the estimated amount of the exposure corresponded to CAD 218.0 million. In the event Labatt is required to pay these amounts, CAD 110.0 million would be reimbursed by us. During 2008, as required by Canadian tax law, and in order to be able to challenge these assessments, Labatt paid CAD 115.3 million, CAD 79.2 million of which were reimbursed by us. Labatt continues to challenge these assessments.

 

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In June 2007, Labatt and AmBev were named in an Ontario class action lawsuit seeking damages and injunctive relief in connection with changes to retiree health care benefits. AmBev consented to joint representation with Labatt. Prior to motions for class certification, the parties explored dispute resolution alternatives. The parties reached an agreement in principle to settle the matter, which settlement agreement was subsequently approved by the Court on 13 January 2009. The settlement includes cost-sharing of health benefits through payment of deductibles by retirees.

Labour matters

As of 31 December 2008 AmBev was involved in approximately 13,240 legal proceedings in Brazil with former and current employees, mainly relating to overtime, dismissals, severance, health and safety premiums, supplementary retirement benefits and other matters, all of which are awaiting judicial resolution. AmBev has made provisions totalling 221.3 million reais as of 31 December 2008. In Brazil, it is not unusual for a company to be a defendant in a large number of labour claims.

AmBev has approximately 16 claims made by the Brazilian National Institute for Social Security with an aggregate exposure of 67.3 million reais. These claims are classified as having a possible chance of loss and argue, among other things, that AmBev should have paid social security contributions in relation to bonus payments and payments to third-party service providers.

Civil claims

As of 31 December 2008 AmBev had 4,396 civil claims pending in Brazil, including distributors and product-related claims. AmBev is the plaintiff in 1,683 and the defendant in 2,713 of these claims. AmBev has established provisions totalling 41 million reais as of 31 December 2008 in connection with civil claims.

AmBev is a party to a tortious interference claim brought by its competitor Schincariol whereby Schincariol seeks damages in the range of 100 million reais from AmBev, arguing that AmBev signed up singer Zeca Pagodinho while he was still contractually bound with Schincariol. On 20 July 2007, the lower courts of the State of São Paulo denied Schincariol’s claim, and Schincariol filed an appeal on 24 August 2007. Based on the advice of external counsel, AmBev has not recorded a provision in connection with such proceeding.

Warrants

In 2002, AmBev decided to request a ruling from the CVM ( Comissão de Valores Mobiliários , the Securities and Exchange Commission of Brazil) in connection with a dispute between AmBev and some of its warrant holders regarding the criteria used in the calculation of the strike price of certain AmBev warrants. In March and April 2003, the CVM ruled that the criteria used by AmBev to calculate the strike price were correct. In response to the CVM’s final decision and seeking to reverse it, some of the warrant holders filed separate lawsuits before the courts of São Paulo and Rio de Janeiro.

Although the warrants expired without being exercised, the warrant holders claim that the strike price should be reduced to take into account the strike price of certain stock options granted by AmBev under its Stock Ownership Programme, as well as for the strike price of other warrants issued in 1993 by Companhia Cervejaria Brahma.

AmBev has been notified of 7 claims from 12 holders arguing that they would be entitled to those rights. One of them was ruled favourably to AmBev by the appellate court of the State of São Paulo. Another one is still awaiting final rulings by the same court. A third one was settled. Of the four other claims, one is awaiting a decision and three were ruled against AmBev in the appellate court of the State of Rio de Janeiro. AmBev has appealed to the Superior Court of Justice with respect to the final decisions issued by the appellate court of the State of Rio de Janeiro, and so have the warrant holders whose claim was denied by the appellate court of the State of São Paulo.

 

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In the event the plaintiffs prevail in the above six pending proceedings, AmBev believes that the corresponding economic dilution for the existing shareholders would be the difference between the market value of the shares at the time they are issued and the value ultimately established in liquidation proceedings as being the subscription price pursuant to the exercise of the warrants. AmBev believes that the warrants which are the object of those six proceedings represent 5,545,129 preferred and 1,376,574 common shares that would be issued at a value substantially below fair market value, should claimants ultimately prevail.

AmBev has filed counterclaims to six of these lawsuits. One of those counterclaims is still awaiting final ruling by the appellate court of the State of São Paulo. Of the five other counterclaims, one was settled, three were ruled against AmBev in the appellate court of the State of Rio de Janeiro, and one was ruled against AmBev in the appellate court of the State of São Paulo. AmBev has already appealed to the Superior Court of Justice with respect to the final decisions issued by the appellate courts of the states of Rio de Janeiro and São Paulo, except for one of the rulings rendered by the appellate courts of the State of Rio de Janeiro, which, therefore, is a final decision.

Based on advice from external counsel, AmBev believes that its chances to prevail on these claims and on the counterclaims are possible. However, no assurance can be given that the unfavourable decisions to AmBev rendered so far may be reversed by the appellate courts or the Superior Court of Justice. As these disputes are based on whether AmBev should receive as a subscription price a lower price than the price that it considers correct, a provision of amounts with respect to these proceedings would only be applicable with respect to legal fees and past dividends.

Distributors and product-related claims

Numerous claims have been filed in Brazil against AmBev by former distributors whose contracts were terminated. Most claims are still under review by first instance and state Appellate Courts, and a few are currently being reviewed by the Superior Court of Justice.

AmBev has established provisions in the amount of 23 million reais in connection with these claims as of 31 December 2008, based on the advice of external legal counsel.

Antitrust matters

Investigations

AmBev currently has a number of antitrust investigations pending against it before Brazilian antitrust authorities.

Tô Contigo

On 22 July 2009, CADE issued its ruling in connection with a proceeding initiated in 2004 as a result of a complaint filed by Schincariol that had, as its main purpose, the investigation of AmBev’s conduct in the market, in particular AmBev’s customer loyalty program known as “Tô Contigo” and which is similar to airline frequent flyer and other mileage programs.

During its investigation, the Secretariat of Economic Law of the Ministry of Justice (“SDE”) concluded that the program should be considered anticompetitive unless certain adjustments were made. These adjustments have already been substantially incorporated into the current version of the program. The SDE opinion did not threaten any fines and recommended that the other accusations be dismissed. After the SDE opinion, the proceeding was sent to CADE, which issued a ruling that, among other things, imposed a fine in the amount of R$352 million.

AmBev believes that CADE’s decision was without merit and thus has challenged it before the federal courts, which have ordered the suspension of the fine and other parts of the decision upon our posting of a guarantee. AmBev has already rendered a court bond (carta de fiança) for this purpose. According to AmBev’s advisors’ analysis, a loss is possible, and therefore we have not established a provision in our interim financial statements.

 

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Kaiser

On 2 April 2007, Cervejaria Kaiser, which is currently AmBev’s third largest beer competitor in Brazil and part of the FEMSA Group, filed a complaint with Brazilian antitrust authorities alleging that AmBev’s cooler programmes and exclusivity agreements are anti-competitive practices, and also that AmBev launched two combat brands (Puerto del Sol and Puerto del Mar) in connection with the entry of Kaiser’s product Sol Pilsen in 2006. On 9 December 2008, the SDE requested the opening of two administrative proceedings to investigate the alleged practices. AmBev’s preliminary responses were filed before SDE on 18 February 2009. AmBev believes such claims are without merit and intends to vigorously defend this complaint.

630ml Bottle

On 3 April 2008, the Brazilian Association of Carbonated Soft Drinks Manufacturers, the Brazilian Association of Beverages, which comprises Schincariol and Petrópolis—currently AmBev’s two largest competitors in Brazil — and Cervejaria Imperial (a small Brazilian beverage company), filed complaints with Brazilian antitrust authorities challenging AmBev’s new 630ml returnable bottle launched under the Skol brand in the State of Rio de Janeiro and under the Bohemia brand in the State of Rio Grande do Sul. On 17 April 2008, Cervejarias Kaiser also filed a complaint with the Brazilian antitrust authorities challenging the Skol bottle. These competitors claim that AmBev should be prevented from launching the new exclusive 630ml bottle and should be compelled to continue to use the standard 600ml returnable bottle used by all players in the market. On 27 May 2008, SDE issued an injunction prohibiting the use of the new 630ml bottle by AmBev. Due to an appeal filed by AmBev against the SDE injunction, on 23 July 2008 CADE decided to allow the use of the 630ml bottle by AmBev in the states of Rio de Janeiro and Rio Grande do Sul, as long as AmBev maintains a system to change the 630ml bottles acquired by its competitors for 600ml bottles. AmBev will vigorously defend its right to innovate and create differentiation for its products and believes that its competitors’ claims are without merit.

1L Bottle

On 20 August 2009, the Brazilian Association of Beverages filed a complaint with the Brazilian antitrust authorities challenging AmBev’s new proprietary 1L returnable bottle launched under its main brands. The Association claims that AmBev’s new 1L bottle would cause the standard 600ml bottle exchange system to cease to exist, therefore artificially increasing the costs of competitors and restricting their access to the points of sale. In response, on 14 September 2009, AmBev submitted preliminary clarifications to the SDE arguing for the economic rationality and the benefits to the consumer deriving from the 1L format. On 28 October 2009, SDE decided to initiate an Administrative Proceeding against AmBev to further investigate the issue. In its note initiating the proceedings, the SDE stated that although it believes that market players are in principle free to decide whether or not to participate in a standard bottle exchange system, it wanted to further investigate whether the manner pursuant to which AmBev was alledgedly introducing the 1L bottle could potentially create lock-in effects. AmBev will vigorously defend its right to innovate and create differentiation for its products and believes that its competitors’ claims are without merit.

Others

In February 2002, ABRADISA (the Brazilian Association of Antarctica Distributors) filed a complaint challenging the legality of exclusivity provisions in AmBev’s distribution agreements. This dispute was settled in March 2003, with ABRADISA filing a petition in November 2003 before the Brazilian antitrust authorities stating that the settlement agreement was fully complied with by all its parties and that ABRADISA had no interest in continuing with this proceeding. On 11 December 2008, SDE, the Secretariat of Economic Development, issued its opinion recommending the dismissal of the case. On 28 October 2009 CADE dismissed the case.

 

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In April 2007, the Brazilian Association of Carbonated Soft Drinks Manufacturers filed a complaint with the Brazilian antitrust authorities alleging that AmBev engaged in the following anticompetitive practices: (i) predatory prices, (ii) restriction of competitors’ access to shelf space in supermarkets; (iii) exclusivity agreements with strategic points of sales; and (iv) adoption of a proprietary reusable glass bottle. In August 2009, SDE initiated a preliminary inquiry to investigate these alleged practices. The case is still under the analysis of SDE which will decide whether or not to initiate an administrative proceeding to further investigate the company. AmBev believes such claims are without merit and intends to vigorously defend this complaint.

In July 2007, CADE forwarded to SDE for further investigation a complaint issued by Globalbev Bebidase Alimentos Ltda. alleging that AmBev was restricting competitors’ access to the shelf space in supermarkets. In August 2009, SDE initiated a preliminary inquiry to investigate this supposed anticompetitive practice. The case is still under the analysis of SDE which will decide whether or not to initiate an administrative proceeding to further investigate the company. AmBev believes such claim is without merit and intends to vigorously defend this complaint.

After the approval of the acquisition of Cintra in 2008 (see “—AmBev and its Subsidiaries—Merger Control”), SDE initiated an administrative proceeding to investigate the closing in 2009 of a plant of Cintra in the city of Mogi-Mirim, in the State of São Paulo. The SDE wants to investigate whether, after the acquisition, the industrial capacity of Cintra was reduced, contrary to information provided by AmBev to SDE during the report of the Cintra acquisition. AmBev already informed SDE about the rationale for the closure of the Mogi-Mirim plant and that the overall capacity of Cintra has increased substantially after its acquisition by AmBev. As a result, AmBev believes such claim is without merit and intends to vigorously defend this complaint.

Merger Control

On 28 March 2007, AmBev announced the signing of a purchase and sale agreement with respect to the acquisition of 100% of Goldensand Comércio e Serviços Lda, the controlling shareholder of what was then called Cintra. The transaction was submitted for CADE review on 19 April 2007. On 21 May 2008, AmBev sold the Cintra brands to Schincariol. In July 2008, CADE issued a favourable decision approving the transaction.

Labatt completed its acquisition of Lakeport Brewing Income Fund on 29 March 2007. The Competition Bureau of Canada had filed an application with the Competition Tribunal for a temporary injunction to delay closing to allow the Bureau to complete its review of the transaction. The Tribunal dismissed the Bureau’s application and allowed the transaction to close as scheduled. The Bureau appealed the Tribunal’s decision to the Federal Court of Appeal. The Court of Appeal rejected the Bureau’s argument on 22 January 2008. The Bureau continued its review of the transaction and concluded in January 2009 that there was insufficient evidence to establish that the transaction was likely to substantially lessen or prevent competition.

CVM

Caixa de Previdência dos Funcionários do Banco do Brasil —PREVI, a Brazilian pension fund which is one of AmBev’s largest minority shareholders, filed an administrative complaint against AmBev with the CVM in April 2004 alleging abuse of position by AmBev’s controlling shareholders and breach of fiduciary duty by AmBev’s directors in connection with the approval of the InBev-AmBev Transactions, appropriation of commercial opportunity and inadequate disclosure. The complaint requested, among other things, that the CVM render an opinion contesting the legality of the transactions and intervene to prevent the closing of the Incorporação . The CVM ruled in December 2004 that (i) there was no basis to conclude that there had been an abuse of position by the controlling shareholders or conflict of interests in relation to them, and (ii) that there was no indication of an appropriation of a commercial opportunity by the directors of AmBev, without prejudice to any further investigation that the staff of the CVM might conduct, as appropriate. Moreover, the CVM expressed its opinion that one director involved in the InBev-AmBev Transactions could not have intervened in the AmBev board resolutions related thereto, recommending further investigations by the staff. The CVM recommended also that the staff investigate the performance of the duty of care of other directors during the decision process and the adequacy of the disclosure proceeding of the transactions by AmBev’s officers. The CVM requested certain

 

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information related to the InBev-AmBev Transactions. On 6 May 2009 AmBev was informed that the CVM initiated formal complaints against certain AmBev directors and officers regarding the aforementioned investigations. AmBev’s directors and officers presented their defences on 17 August 2009.

The CVM also initiated an administrative proceeding in October 2008 in which it alleges that certain shareholders, members of the board of directors and officers of AmBev violated Brazilian Corporations Law and CVM rules, relating to (i) insider trading at the time of the InBev-AmBev Transactions; (ii) violation of AmBev’s Stock Ownership Programme, which was supposedly used to raise the share participation of certain shareholders; (iii) negotiation of shares from AmBev’s Stock Ownership Programme without previously offering these shares to AmBev; and (iv) non-disclosure of acquisition of significant shareholding and disclosure of incorrect information to the market. Each of the involved parties has denied violating CVM rules. If the CVM rules that violations occurred, sanctions could include reprimands, fines or decrees temporarily barring the individuals found guilty from acting as officers or directors of AmBev. Any decision of the CVM is subject to administrative appeal and/or to judicial review. See “Directors, Senior Management and Employees—Directors and Senior Management—Board of Directors—General Information on the Directors” and “Directors, Senior Management and Employees—Directors and Senior Management—Chief Executive Officer and Senior Management—General Information on the Members of the Executive Board of Management” for further details.

Environmental matters

In August 2003, Oliveira Comércio de Sucatas filed a complaint with the Public Attorney of the city of Pedreira, in the State of São Paulo, alleging that Companhia Brasileira de Bebidas (a predecessor of AmBev) was using the waste disposal site of the city as a disposal for toxic garbage. In September 2003, AmBev presented its response with all the evidence it had. This case is still in the discovery phase.

The Public Attorney of the State of Rio de Janeiro has requested the initiation of a civil investigation to investigate anonymous reports of pollution allegedly caused by Nova Rio, AmBev’s beer plant located in the state of Rio de Janeiro. Currently this investigation is in the discovery phase. AmBev expects this investigation to be dismissed as AmBev has presented several expert opinions, including one from the State environmental agency, showing lack of environmental damages. Simultaneously, the police of Rio de Janeiro have requested the initiation of a criminal investigation to investigate the author of the alleged crime, which is also in the discovery phase. AmBev expects this investigation will be dismissed concurrently with the civil investigation mentioned above.

On 17 April 2007, the Promotoria , or Public Attorney, of Viamão, State of Rio Grande do Sul requested the initiation of a civil investigation and a criminal investigation to investigate reports made by local population of pollution around the plant. AmBev reached a settlement with the Promotoria of Viamão on 12 June 2007. In February 2009 the investigations were suspended for a period of three years in order to be certified that the settlement was entirely accomplished by AmBev.

Brazilian alcohol industry litigation

On 28 October 2008, the Brazilian Ministério Público Federal filed a suit for damages against AmBev and two other beverage companies claiming total damages of approximately 2.8 billion reais (of which approximately 2.1 billion reais are claimed against AmBev). The public prosecutor alleges that: (i) alcohol causes serious damage to individual and public health, and that beer is the most consumed alcoholic beverage in Brazil; (ii) defendants have approximately 90% of the national beer market share and are responsible for heavy investments in advertising; and (iii) the advertising campaigns increase not only the market share of the defendants but also the total consumption of alcohol and, hence, the damages to society, and encourage underage consumption. AmBev believes such claims are without merit and intends to vigorously defend this litigation.

Shortly after the above lawsuit was filed, a consumer-protection association applied to be admitted as a joint-plaintiff. The association has made further requests in addition to the ones made by Public Prosecutor,

 

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including the claim for “collective moral damages” in an amount to be ascertained by the court; however, it suggests that it should be equal to the initial request of 2.8 billion reais (therefore, it doubles the initial amount involved). The court has admitted the association as joint-plaintiff and has agreed to hear the new claims. AmBev intends to vigorously defend this litigation. See note 33 to our audited financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Anheuser-Busch

Grupo Modelo arbitration

On 16 October 2008, Grupo Modelo, Diblo S.A. de C.V. and the Grupo Modelo series A shareholders filed a notice of arbitration, under the arbitration rules of the United Nations Commission on International Trade Law, against Anheuser-Busch, Anheuser-Busch International Inc. and Anheuser-Busch International Holdings Inc. The notice of arbitration claimed the transaction between Anheuser-Busch and InBev violated provisions of the 1993 investment agreement, governed by the law of the United Mexican States, between the Anheuser-Busch entities, Grupo Modelo, Diblo and the series A shareholders. It seeks post-closing relief, including (i) a declaration that Anheuser-Busch breached the 1993 investment agreement, (ii) rescission of certain continuing rights and obligations under the 1993 investment agreement, (iii) a permanent injunction against Anheuser-Busch or its successors from exercising governance rights under the 1993 investment agreement, (iv) suspension of Anheuser-Busch’s right to exercise a right of first refusal to purchase the stock of Grupo Modelo held by the series A shareholders, (v) “rectification” of the 1993 investment agreement to add additional restrictions on the Anheuser-Busch entities and (vi) money damages of up to $2.5 billion. The respondents believe that the claims are without merit because, among other things, there is no change of control clause in the investment agreement and no sale or transfer of the shares of Grupo Modelo and Diblo held by Anheuser-Busch International Holdings Inc. occurred. However, the relief sought by Grupo Modelo, Diblo and its series A shareholders in the arbitral proceeding or any other equitable or other relief they may seek may have an adverse effect on us, including by limiting our ability to exercise governance rights under the investment agreement with Grupo Modelo after the closing of the Anheuser-Busch acquisition. On 2 February 2009, the arbitration panel denied Grupo Modelo’s request for interim measures that would have prevented Anheuser-Busch from exercising its corporate governance rights pending the final arbitration proceeding. The panel also ruled that Anheuser-Busch was to provide 90 days notice if it intends to sell its shares. In August 2009, the final arbitration proceeding was conducted in New York City. The arbitration panel has not yet issued a ruling.

Ginsburg Litigation

On 10 September 2008 an action brought under Section 7 of the Clayton Antitrust Act entitled Ginsburg et al. v. InBev NV/SA et al., C.A. No. 08-1375 (the “ Ginsburg Litigation ”), was filed against InBev, Anheuser-Busch and Anheuser-Busch, Inc. in the United States District Court for the Eastern District of Missouri. The complaint alleges that the Anheuser-Busch acquisition will have certain anticompetitive effects and consequences on the beer industry and will create a monopoly in the production and sale of beer in the United States. Plaintiffs generally seek declaratory relief that the Anheuser-Busch acquisition violates Section 7 of the Clayton Antitrust Act, injunctive relief to prevent consummation of the acquisition, and fees and expenses. On 18 November 2008 plaintiffs’ request for injunctive relief was denied. On 3 August 2009 the Court granted defendants’ Motion to Dismiss plaintiffs claims with prejudice. On 4 August 2009 the Court entered judgment in favour of the defendants. On 19 August 2009, plaintiffs filed an appeal of such judgment. We continue to vigorously defend against these claims through the appellate process.

Acquisition antitrust matters

The Anheuser-Busch merger was subject, and required approvals or notifications pursuant to, various antitrust laws, including under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

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United States

Under the Hart-Scott-Rodino Act and the rules promulgated thereunder by the U.S. Federal Trade Commission, the Anheuser-Busch merger could not have been completed until Anheuser-Busch and we had each filed a notification and report form under the Hart-Scott-Rodino Act and the applicable waiting period had expired or been terminated. On 15 July 2008, we had filed, and on 18 July 2008, Anheuser-Busch filed notification and report forms under the Hart-Scott-Rodino Act with the U.S. Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice. The initial 30-day waiting period under the Hart-Scott-Rodino Act (which ended on 18 August 2008) was extended by the Department of Justice’s issuance, on 18 August 2008, of a Request for Additional Information and Documentary Material. The extension resulting from such request was for a period of time necessary for us and Anheuser-Busch to substantially comply with the request and provide relevant information and documentary materials, plus an additional 30 days for the relevant U.S. authorities to review the information and documentary materials so provided after both parties have substantially complied with the request.

On 14 November 2008, we and Anheuser-Busch reached a proposed consent final judgement with the Department of Justice that permitted the completion of our acquisition of Anheuser-Busch. Under the terms of the proposed final judgment filed on 14 November 2008 in U.S. District Court for the District of Columbia, the following three actions were required to occur:

 

   

Labatt, a partially owned, indirect subsidiary of ours headquartered in Toronto, Canada, was required to grant to an independent third party a perpetual exclusive license:

 

   

to market, distribute and sell Labatt branded beer (primarily Labatt Blue and Labatt Blue Light) for consumption in the United States;

 

   

to brew such Labatt branded beer in the United States or Canada solely for sale for consumption in the United States; and

 

   

to use the relevant trademarks and intellectual property to do so;

 

   

We were required to sell to the licensee the assets of InBev USA LLC d/b/a/ Labatt USA, our subsidiary, headquartered in Buffalo, New York that related to its sale of Labatt branded beer in the United States; and

 

   

Labatt was required to brew and supply the Labatt branded beer for the licensee for an interim period of no more than three years.

The proposed consent final judgement required implementation of the actions above within the later of 90 days of filing of the complaint (which was on 14 November 2008) or five calendar days after notice of the entry of the final judgment with the U.S. District Court. The proposed consent final judgment received final approval by the U.S. District Court for the District of Columbia on 11 August 2009. We agreed to indemnify AmBev and its subsidiary Labatt against certain losses, claims and damages arising out of this final judgment and the divestiture of the assets disposed of thereunder.

To satisfy the requirements imposed by the U.S. Department of Justice in connection with its clearance of the Anheuser-Busch acquisition, on 13 March 2009, we announced the completion of the sale of the assets of InBev USA LLC (d/b/a Labatt USA) to North American Breweries, Inc., an affiliate of KPS Capital Partners, LP. Under the terms of the agreement announced on 23 February 2009, KPS Capital Partners, LP acquired the assets of Labatt USA and an exclusive license, granted by Labatt to (i) brew Labatt branded beer in the United States or Canada solely for sale for consumption in the United States; (ii) distribute, market and sell Labatt branded beer for consumption in the United States; and (iii) use the relevant trademarks and intellectual property required to do so. The transaction does not affect Labatt branded beer in Canada or elsewhere outside the United States. Approximately 1.7 million hectoliters of Labatt branded beer were sold in the United States in 2008. The impact on earnings of the foregoing actions is not material to us.

 

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U.S. antitrust laws also allow the U.S. Department of Justice and others such as U.S. state governments and private individuals to bring antitrust actions contending that an already completed merger substantially lessens competition or has created a monopoly or otherwise violates the antitrust laws in different or additional respects not contemplated by the action filed on 14 November 2008 and resolved by the final judgment described above.

Argentina

Authorisation, approval and/or clearance of the Anheuser-Busch acquisition in Argentina under the applicable antitrust laws is still pending based on ongoing regulatory review.

MATERIAL CONTRACTS

The following contracts have been entered into by us within the two years immediately preceding the date of this Form F-4 or contain provisions under which we or another member of our group has an obligation or entitlement which is material to our group:

The Merger Agreement

On 13 July 2008, InBev and its indirect wholly-owned subsidiary formed exclusively for the purpose of effecting the Anheuser-Busch merger (as defined below), Pestalozzi Acquisition Corp., entered into an Agreement and Plan of Merger with Anheuser-Busch Companies, Inc. (the “ Merger Agreement ”). The Merger Agreement is filed as Exhibit 10.1 to this Form F-4. Anheuser-Busch Companies, Inc is a Delaware corporation that was organised in 1979 as the holding company of Anheuser-Busch, Incorporated, a Missouri corporation whose origins date back to 1875.

InBev shareholders approved the Anheuser-Busch merger at InBev’s Extraordinary Shareholders Meeting on 29 September 2008 and, on 12 November 2008, a majority of Anheuser-Busch shares were voted to approve the Anheuser-Busch acquisition at a Special Shareholders Meeting of Anheuser-Busch. The closing of the Anheuser-Busch merger was completed, and the certificate of merger filed, on 18 November 2008. InBev financed the closing of the Anheuser-Busch acquisition with funds drawn under senior and bridge facilities put in place to finance the Anheuser-Busch acquisition.

Pursuant to the Merger Agreement, upon the terms and subject to the conditions set forth in the Merger Agreement, on 18 November 2008 (i) Pestalozzi Acquisition Corp. merged with and into Anheuser-Busch, (ii) each outstanding share of Anheuser-Busch common stock (other than shares held by InBev, Pestalozzi Acquisition Corp., Anheuser-Busch or their respective subsidiaries, in each case not held on behalf of third parties, and shares held by stockholders who had perfected and not withdrawn a demand for statutory appraisal rights, if any), was converted into the right to receive USD 70.00 in cash, without interest and less any applicable withholding tax and (iii) each outstanding share of Pestalozzi Acquisition Corp. common stock was converted into shares of the surviving corporation. Anheuser-Busch became the surviving corporation in the merger and continues to do business as “Anheuser-Busch Companies, Inc.” following the merger, while Pestalozzi ceased to exist. As a result, upon completion of the merger, Anheuser-Busch became an indirect wholly-owned subsidiary of Anheuser-Busch InBev SA/NV.

Post-Closing Agreements under Merger Agreement

Under the Merger Agreement, we agreed that, effective upon the closing of the transactions contemplated by the Merger Agreement:

 

   

Anheuser-Busch’s current headquarters in St. Louis, Missouri would be the surviving corporation’s headquarters, our headquarters for North America (excluding Cuba) and the global home of the flagship “Budweiser” brand;

 

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The current name of Anheuser-Busch would be the name of the surviving corporation, and the name of InBev SA/NV would be “Anheuser-Busch InBev SA/NV”; and

 

   

We would, after consultation with the Anheuser-Busch Board of Directors, nominate and cause to be elected following the closing two current or former directors of Anheuser-Busch to our Board, each such director to be confirmed for a three-year term at our first annual general meeting following the closing of the transactions contemplated by the Merger Agreement.

We agreed, following the closing of the transactions contemplated by the Merger Agreement, to:

 

   

Cause the surviving corporation to preserve Anheuser-Busch’s heritage and continue to support philanthropic and charitable causes in St. Louis and other communities in which Anheuser-Busch operates, including Grant’s Farm and the Clydesdales operations;

 

   

Confirm the surviving corporation’s good faith commitment that it will not close any of Anheuser-Busch’s current 12 breweries located in the United States, provided there are no new or increased federal or state excise taxes or other unforeseen extraordinary events which negatively impact Anheuser-Busch’s business;

 

   

Reaffirm our commitment to the three-tier distribution system in the United States and agree to work with Anheuser-Busch’s existing wholesaler panel to strengthen the relationship between the surviving corporation and its wholesalers; and

 

   

Honour Anheuser-Busch’s obligations under the Naming Rights and Sponsorship Agreement, dated 3 August 2004, as amended, between Busch Media Group, Inc., as authorised agent for Anheuser-Busch, Incorporated and Cardinals Ballpark, LLC relating to Busch Stadium.

Although we have not attempted to quantify these post-closing obligations under the Merger Agreement in monetary terms due to their nature, we do not expect such obligations to be material in relation to our business going forward.

Indemnification

Under the Merger Agreement, following the effective time of the Anheuser-Busch merger, we and the surviving corporation of the merger are required to indemnify, defend and hold harmless each present and former director and officer of Anheuser-Busch or any of its subsidiaries and any fiduciary under any Anheuser-Busch benefit plan and promptly advance expenses as incurred against (i) any costs or expenses (including attorneys’ fees and disbursements), (ii) judgments, (iii) fines, (iv) losses, (v) claims, (vi) damages or (vii) liabilities, incurred in connection with any claim, action, suit, proceeding or investigation (whether civil, criminal, administrative or investigative) arising out of or pertaining to the fact that the indemnified party is or was:

 

   

An officer, director, employee or fiduciary of Anheuser-Busch or any of its subsidiaries; or

 

   

A fiduciary under any Anheuser-Busch benefit plan,

whether any such claim, action, suit, proceeding or investigation is or was asserted or claimed prior to, at or after the effective time of the merger (including with respect to any acts or omissions in connection with the Merger Agreement and the transactions and actions contemplated thereby), to the fullest extent permitted under the law of the State of Delaware and Anheuser-Busch’s certificate of incorporation or bylaws and any indemnification agreement in effect on the date of the Merger Agreement.

Prior to the merger, each of Anheuser-Busch’s directors and executive officers was party to an indemnification agreement with Anheuser-Busch which provided indemnitees with, among other things, certain indemnification and advancement rights in third-party proceedings, proceedings by or in the right of Anheuser-

 

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Busch, proceedings in which the indemnitee is wholly or partly successful, and for an indemnitee’s expenses incurred as a witness in a proceeding by reason of his or her corporate status. In the event of a potential change of control of Anheuser-Busch, each of the directors and executive officers had the right to request that Anheuser-Busch fund a trust in an amount sufficient to satisfy any and all expenses reasonably anticipated at the time of request to be incurred in connection with investigating, preparing for and defending any claim relating to an indemnifiable event, and any and all judgments, fines, penalties and settlement amounts of any and all claims relating to an indemnifiable event from time to time actually paid or claimed, reasonably anticipated or proposed to be paid.

Employee Benefits

From and after the effective time of the Anheuser-Busch merger, we agreed under the Merger Agreement to, and to cause the surviving corporation to honour, in accordance with their terms, all Anheuser-Busch benefit plans. In addition, we agreed to pay, or cause to be paid, the annual bonuses for the 2008 calendar year to employees of Anheuser-Busch and its subsidiaries who remained employed through 31 December 2008 or who were involuntarily terminated without cause, between the effective time of the Anheuser-Busch merger and 31 December 2008 (other than employees who were given a notice of termination prior to the effective time of the Anheuser-Busch merger), based on their performance for the 2008 year in accordance with Anheuser-Busch’s practices and policies in effect on the date of the Merger Agreement.

Until the first anniversary of the effective time of the Anheuser-Busch merger or 31 December 2009, whichever is later, we agreed to, or to cause the surviving corporation and each of its subsidiaries to, provide employees of Anheuser-Busch and its subsidiaries at the effective time of the Anheuser-Busch merger with compensation and benefits that are not less favourable in the aggregate than the compensation and benefits provided to current employees immediately prior to the effective time of the Anheuser-Busch merger.

We agreed to cause the surviving corporation to cause service rendered by employees of Anheuser-Busch and its subsidiaries prior to the consummation of the Anheuser-Busch merger to be taken into account for vesting and eligibility purposes (but not accrual purposes) under employee benefit plans of the surviving corporation and its subsidiaries, to the same extent as such service was taken into account under the corresponding benefit plans of Anheuser-Busch and its subsidiaries for those purposes. Current employees will not be subject to any pre-existing condition limitation under any health plan of the surviving corporation or its subsidiaries for any condition for which they would have been entitled to coverage under the corresponding benefit plan of Anheuser-Busch and its subsidiaries in which they participated prior to the effective time of the Anheuser-Busch merger. We will cause the surviving corporation and its subsidiaries to give such current employees credit under such plans for co-payments made and deductibles satisfied prior to the date of the Merger Agreement.

Until the first anniversary of the effective time of the Anheuser-Busch merger or 31 December 2009, whichever is later, we or the surviving corporation, or we or the surviving corporation’s subsidiaries, as applicable, will pay severance benefits to non-union employees of Anheuser-Busch and its subsidiaries who are involuntarily terminated without cause during such period (other than those employees who were given a notice of termination prior to the effective time of the Anheuser-Busch merger) that are not less favourable than the severance benefits payable under Anheuser-Busch’s severance pay programme as in effect immediately prior to the effective time of the merger.

Financing the Anheuser-Busch Acquisition

The total amount of funds that was required to consummate the Anheuser-Busch acquisition, including for the payment of USD 52.5 billion to shareholders of Anheuser-Busch, refinancing certain Anheuser-Busch indebtedness, payment of all transaction charges, fees and expenses and the amount of fees and expenses and accrued but unpaid interest to be paid on Anheuser-Busch’s outstanding indebtedness, was determined to be

 

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approximately USD 54.8 billion. We put in place certain short- and long-term senior and bridge financing commitments in the amount of USD 54.8 billion for this purpose. We drew USD 53.8 billion upon these short- and long-term senior and bridge financing commitments to enable it to consummate the Anheuser-Busch acquisition.

In connection with the Anheuser-Busch acquisition, we entered into the following definitive short- and long-term financing arrangements:

 

   

USD 45 billion senior facilities agreement, dated as of 12 July 2008 as amended as of 23 July 2008, 21 August 2008 and 3 September 2008, for InBev and Anheuser-Busch InBev Worldwide Inc. (previously known as InBev Worldwide S.à.r.l), arranged by Banco Santander, S.A., Barclays Capital, BNP Paribas, Deutsche Bank AG, London Branch, Fortis Bank SA/NV, ING Bank N.V., J.P. Morgan PLC, Mizuho Corporate Bank, LTD., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and The Royal Bank of Scotland PLC, as Mandated Lead Arrangers and Bookrunners, and Fortis Bank SA/NV, acting as Agent and Issuing Bank; and

 

   

USD 5.6 billion bridge facility agreement, dated as of 12 July 2008 as amended and increased to USD 9.8 billion pursuant to a supplemental agreement dated 23 July 2008 and as further amended as of 3 September 2008 for InBev, arranged by Banco Santander, S.A., BNP Paribas, Deutsche Bank AG, London Branch, Fortis Bank SA/NV, ING Bank N.V., J.P. Morgan PLC and The Royal Bank of Scotland PLC, as Mandated Lead Arrangers and Fortis Bank SA/NV, acting as Agent.

As described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Net debt and Equity—Rights Offering”, “—January Notes Offerings”, “—Euro MTN Notes Offerings” and “—May Notes Offerings”, we have repaid the debt we incurred under the bridge facility agreement and a portion of the debt incurred under the senior facilities agreement through the cash proceeds of a combination of equity and debt offerings and certain pre-hedging transactions, cash from operations and the net proceeds of asset dispositions. In addition, we may, in the future, dispose of additional of our assets or businesses and expect to utilise proceeds from any such disposals to repay indebtedness incurred to finance the Anheuser-Busch acquisition.

The following table sets forth the sources and uses of funds in connection with the Anheuser-Busch acquisition:

 

Sources of funds

  

Uses of funds

USD billion (except number of shares)

Facility A—bridge to debt capital markets issuances (1)

   12.0    Offer price for Anheuser-Busch shares    70

Facility B—bridge to disposals (2)

   7.0    Number of shares (fully diluted) (millions)    750

Facility C—three-year bullet bank loan

   13.0    Equity value    52.5

Facility D and Revolving Credit Facility—five-year bullet bank loan

   12.0    Anheuser-Busch debt to be refinanced (5)    0.0

Bridge Facility—bridge to equity (4)

   9.8    Fees and Transaction Costs (6)    1.3

5-year Revolving Credit Facility (undrawn)

   1.0    Additional Liquidity    1.0

Total Sources of Funds

   54.8    Fees and transaction costs    54.8

 

(1)

Facility A was fully repaid as of 27 October 2009. We prepaid USD 1.468 billion of Facility A using the net proceeds of the January Notes offering, USD 4.160 billion of Facility A using the net proceeds of the Euro MTN Notes offerings, USD 2.977 billion of Facility A using the net proceeds of the May Notes, USD 1.029 billion of Facility A using the net proceeds of the September Brazilian Notes offering, USD 1.348 billion of Facility A using the net proceeds of the Old Notes offering and USD 1.016 billion of Facility A using the net proceeds of certain assets and businesses dispositions.

 

(2)

Facility B was fully repaid as of 3 August 2009. We prepaid USD 3.5 billion of Facility B using the net proceeds from the January Notes offering, USD 2.225 million of Facility B using the net proceeds of certain asset and business dispositions and USD 1.275 billion of Facility B using cash flow from operations.

 

(3)

USD 8.893 billion remaining outstanding under Facility C as of 5 November 2009. We prepaid USD 4.107 billion of Facility C using the net proceeds of the sale of the Old Notes.

 

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(4)

The Bridge Facility has been fully repaid from funds raised in connection with the rights offering and cash proceeds received by us from hedging the foreign exchange rate between the euro and the U.S. dollar in connection with the rights offering.

 

(5)

The financing obtained by us was based on the assumption that USD 1.0 billion of Anheuser-Busch debt may be refinanced. Because such refinancing was not required, we retain USD 1.0 billion in available liquidity under the Revolving Credit Facility.

 

(6)

The fees and transaction costs include certain arrangement fees and underwriting commissions, as well as other costs and expenses related to the Anheuser-Busch acquisition and the debt and equity financing arrangements put in place for financing the Anheuser-Busch acquisition.

Senior Facilities Agreement

Overview

The senior facilities agreement makes the following five senior facilities available to us and our subsidiary, Anheuser-Busch InBev Worldwide Inc., for the purpose of funding the Anheuser-Busch acquisition and certain related purposes or, in the case of the Revolving Credit Facility described in (v) below, for other additional purposes: (i) “ Facility A ”, a 364 day term loan facility for up to USD 12 billion principal amount, which may, at our option, be extended by one year, (ii) “ Facility B ”, a 364 day term loan facility for up to USD 7 billion principal amount, (iii) “ Facility C ”, a three year term loan facility for up to USD 13 billion principal amount, (iv) “ Facility D ”, a five year term loan facility for up to USD 12 billion principal amount, and (v) “ Revolving Credit Facility ”, a five year multicurrency revolving credit facility for up to USD 1 billion principal amount. The senior facilities agreement is filed as Exhibit 10.2 to this Form F-4.

As of 5 November 2009, and after giving effect to the repayments described above, there existed USD 20.893 billion of outstanding indebtedness under our senior facilities agreement, which was comprised of USD 8.893 billion outstanding indebtedness under Facility C and USD 12 billion outstanding indebtedness under Facility D. Facility A was fully repaid as of 27 October 2009, and Facility B was fully repaid as of 3 August 2009. The Revolving Credit Facility remains undrawn.

The senior facilities agreement contains customary representations and warranties, covenants and events of default. Among other things, an event of default is triggered if either a default or an event of default occurs under any of our or our subsidiaries’ financial indebtedness, or if there is actual or threatened litigation or other action regarding the Anheuser-Busch acquisition transaction documents that may reasonably cause a material adverse affect on us. These provisions were included in the agreement in consideration of the market conditions at the time, the size of the loans and their intended use in financing the Anheuser-Busch acquisition. With the resolution of the Ginsburg litigation, we are not aware of any actual or threatened material litigation regarding the Anheuser-Busch acquisition transaction documents. See “Legal and Arbitration Proceedings”. The obligations of the borrowers under the senior facilities agreement are jointly and severally guaranteed by certain guarantors. We were required to procure that, following the closing of the Anheuser-Busch merger, Anheuser-Busch and certain key of our subsidiaries accede as guarantors to the senior facilities agreement within certain periods of time after the first utilisation of the senior facilities.

Use of Proceeds

Borrowings under Facility A, Facility B, Facility C and Facility D are required to be made pro rata across all such facilities and may only be applied towards: (i) the direct costs of acquiring Anheuser-Busch, including the costs of financing the cash compensation payable to existing shareholders of Anheuser-Busch, (ii) refinancing existing indebtedness of Anheuser-Busch and its subsidiaries, or (iii) fees, costs and expenses and any stamp, registration and other taxes incurred in connection with acquiring Anheuser-Busch.

Borrowings under the Revolving Credit Facility, which may be drawn-down or utilised by way of letters of credit, may be applied towards: (i) refinancing existing indebtedness of Anheuser-Busch and its subsidiaries, (ii) fees, costs and expenses and any stamp, registration and other taxes incurred in connection with acquiring Anheuser-Busch or (iii) general corporate and working capital purposes of us and our subsidiaries.

 

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USD 44 billion was borrowed on the closing date of the Anheuser-Busch merger to finance a portion of the costs in connection with the closing of the merger.

Conditions Precedent and Certain Funds Period

The availability of funds under the senior facilities, including the Revolving Credit Facility, are subject to the satisfaction of a set of initial conditions precedent, including the delivery to the lenders’ agent of certain resolutions, confirmations and documentation related to completion of the Anheuser-Busch acquisition that have been satisfied, and evidence that, as at the funding date, we have a written confirmation from each of Standard & Poor’s and Moody’s Investor Service that its credit rating (as assessed pro-forma to reflect the Anheuser-Busch acquisition and taking into account the incurrence of related financial indebtedness) was at least BBB– or better from Standard & Poor’s and Baa3 or better from Moody’s Investors Service.

In addition to these conditions precedent, all utilisations, both initial and subsequent, also generally require satisfaction of further conditions precedent, including that no event of default or (in the case of any utilisation that does not constitute a rollover loan, that is, a Revolving Credit Facility loan for purposes of refinancing a maturing Revolving Credit Facility loan or satisfying a claim in respect of a letter of credit and meeting specified conditions) potential event of default is continuing or would result from the proposed utilisation and that certain repeating representation and warranties made by each borrower or guarantor remain true in all material respects.

Margin

We may borrow under each senior facility at an interest rate equal to LIBOR or EURIBOR, plus mandatory costs (if any), plus a margin that ranges from 1.0% to 1.75% per annum based upon the current ratings assigned by rating agencies to our long-term debt. With the exception of Facility B, whose margin increases with time, the margins of the senior facilities increase to the extent that the ratings assigned to our long-term debt are lowered, to a maximum level of 2.375% per annum for Facility A and 3% per annum for Facilities C and D and the Revolving Credit Facility. The margin applicable to certain senior facilities may also be reduced in certain circumstances where our ratings improve.

Certain senior facility margins may also adjust following the first anniversary of the funding date, for instance, if the option to extend the term of Facility A by one year is taken, the margin on Facility A increases by a specified percentage per annum, while the Facility D and Revolving Credit Facility margins may decrease following the first anniversary of the funding date in response to repayments, reductions or prepayments of the Term Facilities (except to the extent funded by a utilisation under the Revolving Credit Facility or another existing credit facility).

Prepayments

Mandatory prepayments are required to be made under the senior facilities in certain circumstances, including (i) in the event that a person or a group of persons acting in concert (other than any existing shareholder(s) of the Stichting) acquires control of us, in which case individual lenders are accorded rights to require prepayment in full of their respective portions of the outstanding utilisations and (ii) out of the net proceeds received by us or our subsidiaries from funds raised in any public or private loan or debt capital markets, funds raised in the equity capital markets or funds raised from asset disposals, subject in each case to specific exceptions.

 

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Under the terms of the senior facilities agreement, prepayments of Facility A, Facility B, Facility C and Facility D will be applied as follows:

 

   

Voluntary prepayments and the net cash proceeds from funds raised in the equity capital markets that are required to be used for prepayments of the senior facilities were applied first in prepayment of Facility B until it was repaid in full, then of such others of Facility A, Facility C and Facility D as we may select until all are repaid in full, and then of the Revolving Credit Facility;

 

   

Net cash proceeds from funds raised in any public or private loan or debt capital markets that are required to be used for prepayments will be applied first in prepayment of Facility A, second in prepayment (at our discretion) of Facility C and/or Facility D, third in prepayment of Facility B, and lastly towards the Revolving Credit Facility (subject to certain exceptions); provided, that a portion of the amount that would otherwise have been required to be applied in prepayment of Facility A may have been applied (at our discretion) towards prepayment of Facility B Loans before prepaying Facility A in an amount not to exceed USD 3,500,000,000; and

 

   

Net cash proceeds from asset disposals were applied first in prepayment of Facility B and then of Facility A, such that the aggregate amount of disposal proceeds applied in prepayment of Facility B and Facility A is not less than USD 7 billion, and then may be applied at our discretion towards any other financial indebtedness of us or our subsidiaries (other than the bridge facility).

Note, however, that the net cash proceeds from equity raising transactions are required to be used to prepay amounts outstanding under the bridge facility agreement before any application against the senior facilities.

Facility A was fully repaid as of 27 October 2009, and Facility B was fully repaid as of 3 August 2009. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions.

Financial Condition Undertaking

The senior facilities agreement requires us to abide by a specified interest cover ratio and leverage ratio which is tested semi-annually for the 12-month test period ending on the test date, beginning on 30 June 2009. The initial interest cover ratio (which is the ratio of EBITDA, calculated in accordance with the senior facilities agreement, to net interest expense on a consolidated basis) is 2.5:1 and it is stepped up incrementally during the term of the facilities to 3.0:1 and the initial leverage ratio (which is the ratio of its total net debt to EBITDA, calculated in accordance with the senior facilities agreement, on a consolidated basis) is 5.2:1 and is stepped down during the term of the facilities to 3.5:1.

 

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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

Administrative, Management, Supervisory Bodies and Senior Management Structure

Our management structure is a “one-tier” governance structure composed of our Board, a Chief Executive Officer responsible for our day-to-day management and an executive board of management chaired by our Chief Executive Officer.

Board of Directors

Role and Responsibilities, Composition, Structure and Organisation

The role and responsibilities of our Board, its composition, structure and organisation are described in detail in our corporate governance charter (“ Corporate Governance Charter ”) which is available on our website: http://www.ab-inbev.com/go/corporate_ governance/corporate_governance_charter.

Our Board may be composed of a maximum of 14 members. There are currently 13 directors, all of whom are non-executives.

Pursuant to a shareholders’ agreement in which certain of our key shareholders agree to hold certain of their interests in us through Stichting Anheuser-Busch InBev, a foundation organised under the laws of the Netherlands (the “ Stichting ”), the holder of the class B Stichting certificates and the holder of the class A Stichting certificates each have the right to nominate four of our directors (see “Major Shareholders and Related Party Transactions—Major Shareholders”). The Stichting board of directors (which consists of eight directors, four of whom are appointed by the holder of the class B certificates and four of whom are appointed by the holder of the class A certificates) nominates four to six directors to our Board who are independent of shareholders, based on recommendations of our Compensation and Nominating Committee.

As a consequence, our Board is currently composed of four members nominated by Eugénie Patri Sébastien S.A. (which represents Interbrew’s founding Belgian families and holds the class A Stichting certificates), four members nominated by BRC S.à.R.L. (which represents the Brazilian families that were previously the controlling shareholders of AmBev and holds the class B Stichting certificates), four independent directors and August A. Busch IV. The independent directors are recommended by our Compensation and Nominating Committee, nominated by the Stichting board and are subsequently elected by our shareholders’ meeting (at which the Stichting, together with its related parties, has the majority of the votes). Our Board was enlarged to 13 members through the addition of the former Anheuser-Busch President and Chief Executive Officer, August A. Busch IV, following completion of the Anheuser-Busch acquisition, and we may further enlarge it to 14 members through the addition of one other former member of Anheuser-Busch’s board of directors.

Directors are appointed for a maximum term of three years. The upper age limit for the directors is 70, although exceptions can be made in special circumstances.

Independent directors on our Board are required to meet the following requirements of independence pursuant to our current Corporate Governance Statement. Such requirements are derived from but not fully identical to the requirements of Belgian company law (when legally required, we shall apply the criteria of independence provided by Belgian company law). Based on the provisions of the new Belgian Corporate Governance Code of March 2009 and the Belgian Company Code, the requirements of independence contained in our Corporate Governance Charter are the following:

 

   

the director is not an executive or managing director of us or an associated company, and has not been in such a position for the previous five years;

 

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the director has not served for more than three successive terms as a non-executive director on our board, nor for total terms of more than twelve years;

 

   

the director is not an employee of us or an associated company and has not been in such a position for the previous three years;

 

   

the director does not receive significant additional remuneration or benefits from us or an associated company apart from a fee received as non-executive director;

 

   

the director is not the representative of a controlling shareholder or a shareholder with a shareholding of more than 10%, or a director or executive officer of such a shareholder;

 

   

the director does not have or has not had within the financial reported year, a significant business relationship with us or an associated company, either directly or as a partner, shareholder, director or senior employee of a body that has such a relationship;

 

   

the director is not or has not been within the last three years, a partner or an employee of our external auditor or the external auditor of an associated company; and

 

   

the director is not a close family member of an executive or managing director or of persons in the situations described above.

When an independent director has served on the Board for three terms, any proposal to renew his mandate as independent director must expressly indicate why the Board considers that his independence as a director is preserved.

Independent directors on our Board are also required to meet the criteria for independence set forth in Rule 10A-3 under the Exchange Act of 1934.

The appointment and renewal of all of our directors is based on a recommendation of the Compensation and Nominating Committee, and is subject to approval by our shareholders’ meeting.

Our Board is our ultimate decision-making body, except for the powers reserved to our shareholders’ meeting by law, or as specified in the articles of association.

Our Board meets as frequently as our interests require. In addition, special meetings of our Board may be called and held at any time upon the call of either the chairman of our Board or at least two directors. Board meetings are based on a detailed agenda specifying the topics for decision and those for information. Board decisions are made by a simple majority of the votes cast.

The composition of our Board is currently as follows:

 

Name

 

Principal function    

 

Nature of directorship

  Initially
appointed
  Term
expires

August A. Busch IV

  Director   Non-executive   2008   2011

Jean-Luc Dehaene

  Independent director   Non-executive   2001   2010

Stéfan Descheemaeker

  Director   Non-executive, nominated by the holders of class A Stichting certificates   2008   2011

Peter Harf

  Independent director   Non-executive, Chairman of our Board   2002   2011

Marcel Herrmann Telles

  Director   Non-executive, nominated by the holders of class B Stichting certificates   2004   2010

Jorge Paulo Lemann

  Director   Non-executive, nominated by the holders of class B Stichting certificates   2004   2010

 

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Name

 

Principal function    

 

Nature of directorship

  Initially
appointed
  Term
expires

Arnoud de Pret Roose de Calesberg

 

Director
  Non-executive, nominated by the holders of class A Stichting certificates   1990   2011

Grégoire de Spoelberch

  Director   Non-executive, nominated by the holders of class A Stichting certificates   2007   2010

Kees J. Storm

  Independent director   Non-executive   2002   2011

Roberto Moses Thompson Motta

 

Director
  Non-executive, nominated by the holders of class B Stichting certificates   2004   2010

Alexandre Van Damme

  Director   Non-executive, nominated by the holders of class A Stichting certificates   1992   2010

Carlos Alberto da Veiga Sicupira

 

Director
  Non-executive, nominated by the holders of class B Stichting certificates   2004   2010

Mark Winkelman

  Independent director   Non-executive   2004   2010

The business address for all of our directors is: Brouwerijplein 1, 3000 Leuven, Belgium.

Mr. Busch IV has held a variety of positions in Anheuser-Busch management, brewing, operations and marketing. He was born in 1964 and is a U.S. citizen. He holds an MBA from St. Louis University, a brewmaster’s degree from the International Brewing Institute in Berlin and graduated magna cum laude with a bachelor’s degree in finance from St. Louis University. He holds an honorary doctorate of business administration from Webster University.

Mr. Dehaene is an independent Board member. Born in 1940, he has served on the Board since 2001. He is an eminent Belgian politician and member of the European Parliament. He is also Chairman of the board of Dexia (Belgium) and a board member of Umicore, Thrombogenics and Lotus Bakeries (Belgium).

Mr. Descheemaeker is a representative of the main shareholders (nominated by Eugénie Patri Sébastien S.A., the holder of the class A Stichting certificates). Born in 1960, Mr. Descheemaeker joined Interbrew in 1996. He began his professional career with the Belgian Ministry of Finance, from where he moved on to Banque Paribas. A Belgian citizen, Mr. Descheemaeker holds a degree in Commercial Engineering from Solvay Business School, Brussels. At Interbrew he led Business Development and External Growth Strategy from 1996 to 2004. He was appointed Zone President U.S. & Latin America in September 2003. In January 2005 Mr. Descheemaeker became Zone President Central & Eastern Europe. In December 2005 his responsibilities shifted to the Western European Zone and he was also appointed a member of the Convergence Committee. In January 2009, Mr. Descheemaeker was appointed Chief Financial Officer of Delhaize Group.

Mr. Harf is an independent Board member (Chairman). Born in 1946, he is a German citizen and Chairman of Coty, a global cosmetics group. He is also the Chairman and Chief Executive Officer of Joh. A. Benckiser SE and Deputy Chairman of the Reckitt Benckiser Group plc, the world’s number one producer of household cleaning products.

Mr. Herrmann Telles is a representative of the main shareholders (nominated by BRC S.à.R.L., the holder of the class B Stichting certificates). Born in 1950, he has been a member of the board of directors of AmBev since 2000. Mr. Telles has a degree in economics from Universidade Federal do Rio de Janeiro, and attended the Owners/Presidents Management Programme at Harvard Business School.

 

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Mr. Lemann is a representative of the main shareholders (nominated by BRC S.à.R.L., the holder of the class B Stichting certificates). Born in Brazil in 1939, he graduated from Harvard University, A.B. 1961. He founded and was senior partner of Banco de Investimentos Garantia S.A. in Brazil from 1971 to June 1998, when it was sold to Credit Suisse First Boston. Until early 2005 he was a director of The Gillette Company in Boston, Swiss Re in Zurich, Chairman of the Latin American Advisory Committee of the New York Stock Exchange and director of Lojas Americanas, a Brazilian retailer. He resigned from these boards to concentrate on his beer investments with us. In 2004 Mr. Lemann aligned his AmBev beer interests with those of Interbrew of Belgium to help create InBev. He is also a board member of Fundação Estudar, provider of scholarships for Brazilians and a member of Harvard Business School’s board of Dean’s Advisors.

Mr. de Pret Roose de Calesberg is a representative of the main shareholders (nominated by Eugénie Patri Sébastien S.A., the holder of the class A Stichting certificates). Born in 1944, he graduated as a commercial engineer from the University of Leuven (Belgium) and has been one of our directors since 1990. He first joined the board of Brasseries Artois S.A. as “ Commissaire ” in the late seventies. From 1972 until 1978 Mr. de Pret served as Corporate Account Manager at Morgan Guaranty Trust Company of New York and from 1978 until 1981 he was Treasurer at the Cockerill-Sambre steel company (Belgium). Between 1981 and 1990 he held various finance positions with UCB (Belgium), first as Treasurer and then as Chief Financial Manager and member of the executive Committee. In 1990 Mr. de Pret joined Société Générale de Belgique as the Corporate Finance Officer. From 1991 to 2000 he was a member of the executive Committee of Union Minière (the company now known as Umicore) (Belgium), as well as Corporate Vice-President Finance, and in 1992 he became Chief Financial Officer. Today, Mr. de Pret holds several board and committee mandates: Delhaize Group (board and audit committee), Umicore (board and audit committee), Sibelco (board and audit committee), L’Integrale (board and finance committee), Euronext (supervisory board), Lesaffre & Cie (board and finance committee) and Sébastien Holding (chairman of the board).

Mr. de Spoelberch is a representative of the main shareholders (nominated by Eugénie Patri Sébastien S.A., the holder of the class A Stichting certificates). Born in 1966, he is a Belgian citizen and an active private equity shareholder. Recent activities include shared Chief Executive Officer responsibilities for Lunch Garden, the leading Belgian self-service restaurant chain. He is a member of the boards of several family-owned companies, such as Eugénie Patri Sébastien S.A., Verlinvest, Orpar (Remy Cointreau) and Cobehold (Cobepa). He holds an MBA from INSEAD, Fontainebleau France.

Mr. Storm is an independent Board member. Born in 1942, he is a Dutch citizen and is the retired chairman of the executive board of directors of AEGON, a life insurance group. He is also chairman of the supervisory board of KLM, the airline carrier of the Netherlands, vice-chairman of the supervisory board of PON Holdings, a member of the supervisory board of AEGON and a member of the board of directors of Baxter Intl (member of the audit committee) and Unilever (chairman of the audit committee).

Mr. Thompson Motta is a representative of the main shareholders (nominated by BRC S.à.R.L., the holder of the class B Stichting certificates). Born in 1957. Mr. Thompson Motta is a founder and board member of GP Investments Ltd. (Bermuda) and is also a board member of Lojas Americanas S.A. and São Carlos S.A. He holds a degree in mechanical engineering from Pontificia Universidade Católica do Rio de Janeiro, and an MBA from the Wharton School of the University of Pennsylvania.

Mr. Van Damme is a representative of the main shareholders (nominated by Eugénie Patri Sébastien S.A., the holder of the class A Stichting certificates). Born in 1962, he held various operational positions within the AB InBev Group until 1991, including Head of Corporate Planning and Strategy. He has managed several private venture holding companies and currently is a director of Patri S.A. (Luxembourg). Mr. Van Damme holds a degree in Business Administration from the University of Brussels (Belgium).

Mr. da Veiga Sicupira is a representative of the main shareholders (nominated by BRC S.à.R.L., the holder of the class B Stichting certificates). Born in 1948, he has been Chairman of Lojas Americanas since 1981, where he served as chief executive officer until 1992. He has been a board member of Quilmes since 2002 and a member of the Board of Dean’s Advisors of Harvard Business School since 1998.

 

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Mr. Winkelman is an independent Board member. Born in 1946, he is a citizen of the Netherlands. He served as a Management Committee member of Goldman Sachs & Co. from 1988 to 1994, where he is now a Senior Director. He holds a degree in Economics from the Erasmus University in Rotterdam, and an MBA from the Wharton School at the University of Pennsylvania, where he is a trustee. Before joining Goldman Sachs & Co. in 1978, he served at the World Bank for four years as a senior investment officer.

General Information on the Directors

In relation to each of the members of our Board, other than as set out below, we are not aware of (i) any convictions in relation to fraudulent offences in the last five years, (ii) any bankruptcies, receiverships or liquidations of any entities in which such members held any office, directorships, or partner or senior management positions in the last five years, or (iii) any official public incrimination and/or sanctions of such members by statutory or regulatory authorities (including designated professional bodies), or disqualification by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years.

In October 2008, Messrs. Lemann, Telles and Sicupira were notified by the CVM, the Brazilian Securities Commission, that it had decided to initiate a formal regulatory inquiry against them regarding (i) the potential use of privileged information in relation to the trading of AmBev shares between May 2003 and March 2004 and (ii) the way certain information regarding AmBev was disclosed to the Brazilian market in March 2004. Messrs. Lemann, Telles and Sicupira believe that this inquiry is without merit and presented their defence on 7 November 2008. In addition, on 6 May 2009, Messrs. Lemann, Telles and Sicupira learned that the CVM has decided to initiate a formal regulatory inquiry against them regarding the approval process of the InBev-AmBev transaction, as well as its disclosure to the market. Messrs. Lemann, Telles and Sicupira presented their defences on 17 August 2009. See “—Legal and Arbitration Proceedings—AmBev and its Subsidiaries—CVM”.

No member of our Board has a family relationship with any other member of our Board or any member of our executive board of management.

Over the five years preceding the date of this Form F-4, the members of our Board hold or have held the following main directorships (apart from directorships they have held with us and our subsidiaries) or memberships of administrative, management or supervisory bodies and/or partnerships:

 

Name

 

Current

 

Past

August A. Busch IV

  Grupo Modelo   Fedex Corp.

Jean-Luc Dehaene

  Umicore, Lotus Bakeries, Thrombogenics, Koning Boudewijn Stichting/Fondation Roi Baudouin and College of Europe, Dexia Bank SA/NV   Telindus and Domo

Stéfan Descheemaeker

  Eugénie Patri Sébastien S.A., the Stichting and Delhaize Group  

Peter Harf

  Reckitt Benckiser, Coty, Labelux, DKMS Deutsche Knochenmarkspenderdatei and DKMS Americas   Brunswick

Marcel Herrmann Telles

  Harvard Business School’s Board of Dean’s Advisors, 3G Capital, Inc., Instituto de Desenvolvimento Gerencial—INDG, Fundação Estudar, Instituto Social Maria Telles and the Stichting   Lojas Americanas S.A., São Carlos Empreendimentos e Participações S.A., Editora Abril S.A. GP Investimentos and Instituto Veris—IBMEC São Paulo

 

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Name

 

Current

 

Past

Jorge Paulo Lemann

  Harvard Business School’s Board of Dean’s Advisors, 3G Capital, Inc., Fundação Estudar, Fundação Lemann, the Stichting and Instituto Veris—IBMEC São Paulo   Lojas Americanas S.A., São Carlos Empreendimentos e Participações S.A., GP Investimentos, The Gillette Company, Swiss Re, DaimlerChrysler (International Advisory Board), New York Stock Exchange (Latin American Advisory Board)

Arnoud de Pret Roose de Calesberg

  Delhaize Group, Umicore, UCB, Sibelco, L’Intégrale Caisse Commune d’Assurances, Lesaffre & Cie, the Stichting, Eugénie Patri Sébastien S.A., Rayvax Société d’Investissement NV/SA, Sébastien Holding S.A., Multifin S.A., IMCC S.A., Immobilière d’Haltinne S.A., Solières Conseil S.A., Amélie-Fin S.A., Adrien Invest S.C.R.L., Coqueray S.A., Euronext B.V., Comprendre et Parler ASBL and Fondation InBev Baillet-Latour ASBL  

Grégoire de Spoelberch

  Agemar S.A., Wernelin S.A., Fiprolux S.A., Eugénie Patri Sébastien S.A., the Stichting, G.D.S. Consult, Cobehold, Compagnie Benelux Participations, Vervodev, Wesparc, Groupe Josi (1) , Financière Stockel (1) , Immobilière du Canal (1) , Lunch Garden Services (1) , Lunch Garden (1) , Lunch Garden Management (1) , Lunch Garden Finance (1) , Lunch Garden Concepts (1) , HEC Partners (1) , Q.C.C. (1) , A.V.G. Catering Equipment (1) , Immo Drijvers-Stevens (1) , Elpo-Cuisinex Wholesale (1) , Verlinvest (1) and Midi Developpement (1)   Atanor (1) , Amantelia (1) and Demeter Finance (1)

Kees J. Storm

  Unilever N.V., Unilever Plc, Baxter International Inc., Pon Holdings B.V., AEGON N.V. and Koninklijke Luchtvaart Maatschappij N.V.   Royal Wessanen N.V. and Laurus N.V.

Roberto Moses Thompson Motta

 

São Carlos Empreendimentos e Participações S.A., Lojas Americanas S.A., B2W

Companhia Global do Varejo,

  Mcom Wireless Ltda. and LPDS Participações S.A.
  3G Capital, Inc., the Stichting and GP Investment Limited  

Alexandre Van Damme

  Royal Sporting Club Anderlecht, the Stichting and Eugénie Patri Sébastien S.A.  

 

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Name

 

Current

 

Past

Carlos Alberto da Veiga Sicupira

  B2W Companhia Global do Varejo, São Carlos Empreendimentos e Participações S.A., Lojas Americanas S.A., 3G Capital, Inc., Instituto de Desenvolvimento Gerencial—INDG, Movimento Brasil Competitivo—MBC, Fundação Estudar, Fundação Brava, the Stichting and Instituto Veris—IBMEC São Paulo   ALL América Latina Logística S.A., GP Investimentos and Harvard Business School’s Board of Dean’s Advisors

Mark Winkelman

  Goldman, Sachs & Co. and University of Pennsylvania   Select Reinsurance, Ltd. and J.C. Flowers & Co.

 

(1)

As permanent representative.

Chief Executive Officer and Senior Management

Role and Responsibilities, Composition, Structure and Organisation

Our Chief Executive Officer is responsible for our day-to-day management. He has direct responsibility for our operations and oversees the organisation and efficient day-to-day management of our subsidiaries, affiliates and joint ventures. Our Chief Executive Officer is responsible for the execution and management of the outcome of all of our Board decisions.

He is appointed and removed by our Board and reports directly to it.

Our Chief Executive Officer leads an executive board of management which comprises the Chief Executive Officer, seven global functional heads and six geographic business zone presidents.

The other members of executive board of management report to our Chief Executive Officer to enable our Chief Executive Officer to properly perform his duties of daily management.

Although exceptions can be made in special circumstances, the upper age limit for the members of our executive board of management is 65, unless their employment contract provides otherwise.

 

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Our executive board of management currently consists of the following members:

 

Name

  

Function

Carlos Brito

  

Chief Executive Officer

Felipe Dutra

  

Chief Finance Officer

Claudio Braz Ferro

  

Chief Supply Officer

Chris Burggraeve

  

Chief Marketing Officer

Sabine Chalmers

  

Chief Legal and Corporate Affairs Officer

Claudio Garcia

  

Chief People and Technology Officer

Jo Van Biesbroeck

  

Chief Strategy and Sales Officer

Tony Milikin

  

Chief Procurement Officer

Alain Beyens

  

Zone President Western Europe

Miguel Patricio

  

Zone President Asia Pacific

Francisco Sá

  

Zone President Central & Eastern Europe

Bernardo Pinto Paiva

  

Zone President Latin America South

João Castro Neves

  

Zone President Latin America North

Luiz Fernando Edmond

  

Zone President North America

The business address for all of these executives is: Brouwerijplein 1, 3000 Leuven, Belgium.

Carlos Brito is our Chief Executive Officer. Born in 1960, Mr. Brito joined AmBev in 1989. His prior companies were Shell Oil and Daimler Benz. A Brazilian citizen, Mr. Brito holds a degree in Mechanical Engineering from the Federal University of Rio de Janeiro and an MBA from Stanford University. At AmBev, he held various positions in Finance, Operations and Sales, before being appointed Chief Executive Officer of AmBev in January 2004. Prior to his appointment as our Chief Executive Officer in December 2005, Mr. Brito was nominated Zone President North America when InBev was formed in August 2004.

Felipe Dutra is our Chief Financial Officer. Born in 1965, Mr. Dutra joined AmBev in 1990 from Aracruz Cellulose. A Brazilian citizen, Mr. Dutra holds a Major in Economics from Candido Mendes and an MBA in Controlling from the University of São Paulo. At AmBev, he held various positions in Treasury and Finance before being appointed General Manager of AmBev’s subsidiary, Fratelli Vita. In 1999 Mr. Dutra was appointed AmBev’s Chief Financial Officer; in January 2005 he became our Chief Financial Officer.

Claudio Braz Ferro is our Chief Supply Officer. Born in 1955, Mr. Braz Ferro joined AmBev in 1977. A Brazilian citizen, he holds a degree in industrial chemistry from the Federal University of Santa Maria, Brazil and he also studied brewing science at the Catholic University of Leuven/Louvain-La-Neuve, Belgium. At AmBev Mr. Braz Ferro held several key positions, including plant manager of the Skol brewery and industrial director of Brahma operations in Brazil. Mr. Braz Ferro also played a key role in structuring the supply organisation when Brahma and Antarctica combined to form AmBev in 2000. He was appointed our Chief Supply Officer on 1 January 2007.

Chris Burggraeve is our Chief Marketing Officer. A Belgian citizen, Mr. Burggraeve holds a degree in Applied Economics (International Business) from the Catholic University of Leuven, as well as a Masters in European Economics from the Centre Européen Universitaire in Nancy, France, and a TRIUM Global MBA (offered jointly by London School of Economics, NYU Stern and HEC Paris). Born in 1964, Mr. Burggraeve joined us as of November 2007 after over 12 years with The Coca-Cola Company, where he held a number of senior Marketing and General Management roles in various geographies across Europe and Eurasia, including most recently as Group Marketing Director for their European Union Group. Previously he worked for Procter & Gamble Benelux in Brand Management and Innovation. He began his career in consulting and technology start-up companies.

Sabine Chalmers is our Chief Legal and Corporate Affairs Officer. Born in 1965, Mrs. Chalmers joined us in December 2004 from Diageo plc, where she held a number of senior legal positions in various geographies since 1993, including as General Counsel for Diageo North America. Prior to Diageo, Mrs. Chalmers was an

 

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associate at the law firm of Lovells in London, specialising in mergers and acquisitions and in commercial property transactions. A German citizen, Mrs. Chalmers holds an LL.B. from the London School of Economics. She is qualified as a solicitor in England and is a member of the New York State Bar. She is responsible for all leadership and expertise with regard to all legal aspects of the operations and structure of the AB InBev Group and acts as secretary to our Board.

Claudio Garcia is our Chief People and Technology Officer. Born in 1968, Mr. Garcia joined AmBev as a trainee in 1991 after receiving a degree in Economics from the Federal University of Rio de Janeiro. A Brazilian citizen, Mr. Garcia held various positions in Finance and Operations before being appointed IT and Shared Services Director in 2002. Mr. Garcia took the position of our Chief Information & Services Officer in January 2005. In September 2006 Mr. Garcia was appointed Chief People and Technology Officer.

Jo Van Biesbroeck is our Chief Strategy and Sales Officer. Born in 1956, Mr. Van Biesbroeck joined Interbrew in 1978 after receiving a degree in Economics from the University of Leuven. A Belgian citizen, Mr. Van Biesbroeck’s career at Interbrew has included various positions in Controlling and Finance. He became Senior Vice President Corporate Strategy in 2003; in December 2004, Mr. Van Biesbroeck was appointed Chief Strategy & Business Development Officer. He took up the position of Chief Strategy and Sales Officer in May 2006.

Tony Milikin is our Chief Procurement Officer. Born in 1961, Mr. Milikin joined us in May 2009 from MeadWastvaco, where he was Vice President, Supply Chain and Chief Purchasing Officer, based in Richmond, Virginia, since 2004. Mr. Milikin is a U.S. citizen. Prior to joining MeadWestvaco, Mr. Milikin held various purchasing and supply chain positions including Vice-President Purchasing and Supply Management for Sealy, Inc.; Senior Director, Purchasing, Transportation & Distribution for Monsanto; and Manager, Direct Material Sourcing for Alcon Laboratories. Mr. Milikin holds an undergraduate finance degree from the University of Florida and an MBA in Marketing from Texas Christian University in Fort Worth, Texas. Mr. Milikin was appointed Chief Procurement Officer in May 2009.

Alain Beyens is the Zone President Western Europe. Born in 1961, Mr. Beyens joined us in 1987. A Belgian citizen, Mr. Beyens holds a degree in Commercial Engineering from the Solvay Business School (Brussels University—VUB) and an MBA from the University of Antwerp. He held various positions in Distribution and Sales before being appointed General Manager of InBev Belgium in 1999. In 2002 Mr. Beyens became Regional President BeNeFraLux and in 2005 Business Unit President InBev for Germany and associated markets, followed by the position of Zone President Central & Eastern Europe in January 2006. Mr. Beyens was appointed Zone President Western Europe in January 2008.

Miguel Patricio is the Zone President Asia Pacific. Born in 1966, Mr. Patricio joined AmBev in 1998. His prior companies included Philip Morris, The Coca-Cola Company in the U.S. and Johnson & Johnson in Brazil, Central America and the U.S. A Portuguese citizen, Mr. Patricio holds a degree in Business Administration from the São Paulo Business School. At AmBev Mr. Patricio was Vice President Marketing, before being appointed Vice President Marketing North America in 2005. Subsequently he took the position of Business Unit President for Belgium and Luxembourg and Zone President North America in January 2006. He was appointed Zone President Asia Pacific in January 2008.

Francisco Sá is the Zone President Central & Eastern Europe. Born in 1965, Mr. Sá joined AmBev in 1998. A Brazilian citizen, Mr. Sá holds a degree in Civil Engineering from UFBA and an MBA from UC Berkeley (USA). At AmBev he held senior roles including Direct Distribution Manager, Regional Sales Director and, since 2005, VP Soft Drinks for Latin America North (LAN). Mr. Sá was appointed Zone President Central & Eastern Europe in January 2008.

Bernardo Pinto Paiva is the Zone President Latin America South. Born in 1968, Mr. Pinto Paiva joined AmBev in 1991 as a management trainee. A Brazilian citizen, Mr. Pinto Paiva holds a degree in Engineering from UFRJ and an MBA from PUC, Rio de Janeiro. At AmBev he held leadership positions in Sales, as Head of

 

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Sales, but also in Supply, Distribution and Finance. Mr. Pinto Paiva was appointed Zone President North America in January 2008 and Zone President Latin America South on 8 October 2008 (effective upon closing of the Anheuser-Busch acquisition).

João Castro Neves is the Zone President Latin America North and AmBev’s Chief Executive Officer. Born in 1967, Mr. Castro Neves joined AmBev in 1996. A Brazilian citizen, he holds a degree in engineering from Pontifícia Universidade Católica do Rio de Janeiro and an MBA from the University of Illinois. Mr. Castro Neves held positions in various departments such as Mergers and Acquisitions, Treasury, Investor Relations, Business Development, Technology and Shared Services. Mr. Castro Neves was AmBev’s Chief Financial Officer and Investor Relations Officer before being appointed Zone President Latin America South on 1 January 2007 and Zone President Latin America North and AmBev’s Chief Executive Officer on 8 October 2008 (effective upon closing of the Anheuser-Busch acquisition).

Luiz Fernando Edmond is the Zone President North America. Born in 1966, Mr. Edmond joined AmBev in 1990 after starting his professional career with Banco Nacional in Brazil. A Brazilian citizen, Mr. Edmond holds a degree in Production Engineering from the Federal University of Rio de Janeiro. At AmBev he held various positions in the Commercial area, in Operations and in Distribution. He was appointed our Zone President Latin America in January 2005 and Zone President North America on 8 October 2008 (effective upon closing of the Anheuser-Busch acquisition). In his role of Zone President North America, Mr. Edmond oversees all of our operations in the United States and Canada.

In connection with the Anheuser-Busch acquisition, we have made, and expect to continue to make, various appointments and modifications to the management in certain of our business zones and subsidiaries, including Anheuser-Busch. For instance, on 8 October 2008, we announced the appointment of David A. Peacock (who is not one of our directors nor a member of our executive board of management) as the president of Anheuser-Busch, effective upon closing of the Anheuser-Busch acquisition. Mr. Peacock manages all of our U.S. operations. Mr. Peacock previously served as Vice President of Marketing of Anheuser-Busch, Inc. and Chief Executive Officer of Wholesaler Equity Development Corp., a wholly-owned subsidiary of Anheuser-Busch. Mr. Peacock began working with Anheuser-Busch in 1992 and has held positions in corporate planning, brand management, corporate media and retail sales promotion.

General Information on the Members of the Executive Board of Management

In relation to each of the members of the executive board of management, other than as set out below, we are not aware of (i) any convictions in relation to fraudulent offences in the last five years, (ii) any bankruptcies, receiverships or liquidations of any entities in which such members held any office, directorships, or partner or senior management positions in the last five years, or (iii) any official public incrimination and/or sanctions of such members by statutory or regulatory authorities (including designated professional bodies), or disqualification by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years.

In May 2008, Mr. Dutra received a “warning” from the Administrative Appeal Council for the National Financial System of Brazil. A warning, which is the lightest sanction available under applicable Brazilian law, represents the conclusion by the Administrative Appeal Council that, in its view, a breach has occurred. No fine, or any other consequence, attaches to a warning, other than being deemed a repetitive offender in the event of another breach in the future (and, as such, being then potentially exposed to heavier sanctions than would normally be associated with such other breach). The warning relates to the reporting in the 2000 financial year financial statements of Polar (Industrias de Bebidas Antarctica Polar S.A., a Brazilian company that became a subsidiary of AmBev in 1999) of (i) the net balance (immaterial to AmBev and to Polar) of certain inter-company loans of Polar, and (ii) restatements and other adjustments required by the new statutory auditors of Polar after it became a subsidiary of AmBev to conform with AmBev’s accounting practices that increased the amount of certain reserves of Polar. Mr. Dutra, who had been appointed as an officer of Polar a few months before the relevant financial statement reporting has expressed his intention to challenge the warning in a court of law.

 

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In October 2008, Mr. Dutra was notified by the CVM, the Brazilian Securities Commission, that it had decided to initiate a formal regulatory inquiry against him (i) in connection with the potential use of privileged information by Messrs. Lemann, Telles and Sicupira in relation to the trading of AmBev shares between May 2003 and March 2004 and (ii) the way certain information relating to AmBev was disclosed to the Brazilian market in March 2004. On 29 April 2009, the CVM published its decision accepting a settlement proposal with Mr. Felipe Dutra pursuant to which the regulatory inquiry was closed without a decision on the merits, subject to the payment of 250,000 reais. The settlement proposal did not entail the recognition of any wrongdoing on the part of Mr. Dutra, whether express or implied, nor did it amount to an admission as to any of the alleged facts described in the regulatory inquiry. In addition, on 6 May 2009, Mr. Dutra learned that the CVM had decided to initiate a formal regulatory inquiry against him regarding the approval process for the InBev-AmBev transaction, as well as its disclosure to the market. Mr. Dutra presented his defence on 17 August 2009. See “Legal and Arbitration Proceedings—AmBev and its Subsidiaries—CVM”.

No member of our executive board of management has any conflicts of interests between any duties he/she owes to us and any private interests and/or other duties.

No member of our executive board of management has a family relationship with any director or member of executive management.

Over the five years preceding the date of this Form F-4, the members of the executive board of management have held the following main directorships (apart from directorships they have held with us and our subsidiaries) or memberships of administrative, management or supervisory bodies and/or partnerships:

 

Name

  

Current

  

Past

Carlos Brito

  

  

Felipe Dutra

  

  

Claudio Braz Ferro

  

  

Chris Burggraeve

  

Executive Committee Member of World Federation of Advertisers

   Operating partner in The Dellacorte Group LLC

Sabine Chalmers

  

  

Claudio Garcia

  

  

Jo Van Biesbroeck

  

Director of Inno.com NV

  

Alain Beyens

  

  

Tony Milikin

  

   Director of the Institute of Supply Management and Director of Supply Chain Council

Miguel Patricio

  

  

Francisco Sá

  

  

Bernardo Pinto Paiva

  

  

João Castro Neves

  

  

Luiz Fernando Edmond

  

  

COMPENSATION

Introduction

Our compensation system has been designed and approved to help motivate high-performance. The goal is to deliver market-leading compensation, driven by both company and individual performance, and alignment with shareholders’ interests by encouraging ownership of our shares. Our focus is on annual and long-term variable pay, rather than on base salary or fees.

 

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Share-Based Payment Plans

We currently have two primary share-based compensation plans, namely our long-term incentive plan (“ LTI ”), established in 1999 and our share-based compensation plan (“ Share-Based Compensation Plan ”), established in 2006. Persons eligible to receive awards under the LTI receive a portion of their compensation in the form of warrants. Persons eligible to receive awards under the Share-Based Compensation Plan receive a portion of their compensation in the form of shares and, if they so choose, options.

In addition to the LTI and Share-Based Compensation Plan, from time to time we make exceptional grants to our employees and employees of our subsidiaries or grants of shares or options under plans established by us or by certain of our subsidiaries.

Long-Term Incentive Plan or LTI

Since 1999, we have regularly issued warrants ( droits de souscription / warrants, or rights to subscribe for newly issued shares) under our LTI for the benefit of our directors and, until 2006, for the benefit of members of our executive board of management and other senior employees. Since 2007, members of our executive board of management and other employees are no longer eligible to receive warrants under the LTI, but instead receive a portion of their compensation in the form of shares and options granted under our Share-Based Compensation Plan. See “—Share-Based Compensation Plan” below. Only our directors continue to be eligible to receive a portion of their compensation in the form of LTI warrants. Such grants are made annually at our shareholders’ meeting on a discretionary basis upon recommendation of our Compensation and Nominating Committee. See “—Board Practices—Information about Our Committees—The Compensation and Nominating Committee”.

Each LTI warrant gives its holder the right to subscribe for one newly issued share. Shares subscribed for upon the exercise of LTI warrants are ordinary registered Anheuser-Busch InBev SA/NV shares. Holders of such shares have the same rights as any other registered shareholder. The exercise price of LTI warrants is equal to the average price of our shares on the regulated market of Euronext Brussels during the 30 days preceding their issue date. LTI warrants granted in the years prior to 2007 (except for 2003) have a duration of 10 years. From 2007 onwards (and in 2003) LTI warrants have a duration of 5 years. LTI warrants are subject to a vesting period ranging from one to three years. Except as a result of the death of the holder, LTI warrants may not be transferred. Forfeiture of a warrant occurs in certain circumstances when the holder leaves our employment.

 

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The table below provides an overview of all of the warrants outstanding under our LTI as at 30 June 2009:

 

LTI
Plan
        

Issue date of

warrants

  

Expiry date of

warrants

  Number of
warrants
granted (1)
          Number of
warrants
outstanding
   Exercise price         Number of
warrants
outstanding
   Exercise price
                                Unadjusted (2)         As adjusted as a result of rights
offering (3)
                    (in millions)           (in millions)    (in EUR)         (in millions)    (in EUR)

1

      

29 June 1999

  

28 June 2009

  1.301          0    14.23       0    8.90

2

      

26 October 1999

  

26 October 2009

  0.046          0    13.76         

3

      

25 April 2000

  

24 April 2010

  2.425          0.040    11.64       0.096    7.28

4

      

31 October 2000

  

30 October 2010

  0.397          0    25.02       0.030    15.64

5

      

13 March 2001

  

12 March 2011

  1.186          0    30.23       0.193    18.90

6

      

23 April 2001

  

22 April 2011

  0.343          0.032    29.74       0.053    18.59

7

      

4 September 2001

  

3 September 2011

  0.053          0    28.69       0.010    17.94

8

      

11 December 2001

  

10 December 2011

  1.919          0.048    28.87       0.375    18.05

9

      

13 June 2002

  

12 June 2012

  0.245          0.040    32.70       0.031    20.44

10

      

10 December 2002

  

9 December 2012

  3.464          0.074    21.83       0.384    13.65

11

      

29 April 2003

  

28 April 2008

  0.066          0    19.51         

12

      

27 April 2004

  

26 April 2014

  3.881          0.132    23.02       0.754    14.39

13

      

26 April 2005

  

25 April 2015

  2.544          0.140    27.08       1.093    16.93

14

      

25 April 2006

  

24 April 2016

  0.688          0.124    38.70       0.331    24.20

15

      

24 April 2007

  

23 April 2012

  0.120          0.120    55.41         

16

      

29 April 2008

  

28 April 2013

  0.120          0.120    58.31         

17

      

28 April 2009

  

27 April 2014

  1.199 (4)         1.200    21.72         
                                   
     Total      19.995          2.070          3.350   
                                   

 

(1)

The number of warrants granted reflects the number of warrants originally granted under the LTI plan, plus the number of additional warrants granted to holders of those warrants as a result of adjustment resulting from our rights offering in December 2008, as described in more detail below. The number of warrants remaining outstanding from such grants, and their respective exercise prices, are shown separately in the table based on whether or not the relevant warrants were adjusted in connection with our rights offering in December 2008.

 

(2)

Entries in the “Unadjusted” columns reflect the number of warrants outstanding, and the exercise price of such warrants, in each case that were not adjusted as a result of our rights offering in December 2008, as described in more detail below.

 

(3)

Entries in the “adjusted” columns reflect the adjusted number of warrants outstanding, and the adjusted exercise price of such warrants as a result of our rights offering in December 2008, as described in more detail below.

 

(4)

984,203 of the 1,199,203 warrants granted on 28 April 2009 were granted to persons whose outstanding warrants were not adjusted as a result of our rights offering in December 2008 to compensate such persons for the effects of this non-adjustment as described in more detail below.

As of 30 June 2009, the total number of warrants granted under the LTI plans, including the additional warrants granted to compensate for the effects of the December 2008 rights offering, is 19.995 million. As of 30 June 2009, of the 5.420 million outstanding warrants, 3.874 million were vested.

The LTI terms and conditions provide that, in the event that a corporate change decided by us and having an impact on our capital has an unfavourable effect on the exercise price of the LTI warrants, their exercise price and/or the number of our shares to which they give rights will be adjusted to protect the interests of their holders. Our rights offering in December 2008 constituted such a corporate change and triggered an adjustment. Pursuant to the LTI terms and conditions, we determined that the most appropriate manner to account for the impact of the rights offering on the unexercised warrants was to apply the “ratio method” as set out in the NYSE Euronext “Liffe’s Harmonised Corporate Action Policy”, pursuant to which both the number of

 

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warrants and their exercise price were adjusted on the basis of a {(P-E)/P} ratio where “E” represented the theoretical value of the December 2008 rights and “P” represented the closing price of our shares on Euronext Brussels on the day immediately preceding the beginning of the relevant rights subscription period. The unexercised warrants were adjusted on 17 December 2008, the day after the closing of the rights offering. Based on the above “ratio method”, we used an adjustment ratio of 0.6252. The adjusted exercise price of the warrants equals the original exercise price multiplied by the adjustment ratio. The adjusted number of warrants equals the original number of warrants divided by the adjustment ratio. In total, 1,615,453 new warrants were granted pursuant to the adjustment.

The adjustment was not applied to warrants owned by persons that were directors at the time the warrants were granted. In order to compensate such persons, an additional 984,203 warrants were granted under the LTI grant on 28 April 2009, as authorised by our 2009 shareholders’ meeting. The table above reflects the adjusted exercise price and adjusted number of warrants.

For additional information on the LTI warrants held by members of our Board of Directors and members of our executive board of management, see “—Compensation of Directors and Executives”.

Share-Based Compensation Plan

In 2006, we launched a new Share-Based Compensation Plan under which members of our executive board of management and certain other senior employees are granted bonuses.

Pursuant to the Share-Based Compensation Plan, half of each eligible employee’s bonus is settled in our shares. These shares must be held for three years (that is, the shares are fully owned by the employee from the date of grant but are subject to a lock-up of three years and failure to comply with the lock-up results in forfeiture of any matching options granted under the plan as described below). These shares are valued at their market price at the time of grant.

Pursuant to the Share-Based Compensation Plan, eligible employees may elect to receive the other half of their bonus in cash or they may invest all or half of it in our shares. These shares must be held for five years. If an eligible employee voluntarily agrees to defer receiving part of their bonus by electing to invest in such shares, they will receive matching options (that is , rights to acquire existing shares) that will become vested after five years, provided that certain predefined financial targets are met or exceeded. These targets will be met if our return on invested capital less our weighted average cost of capital over a period of three to five years exceeds certain pre-agreed thresholds. The number of matching options received is determined based on the proportion of the remaining 50% of the eligible employee’s bonus that he invests in such shares. For instance, if an eligible employee invests all of the remaining 50% of his bonus in our shares, he will receive a number of options equal to 4.6 times the number of shares he purchased, based on the gross amount of the bonus invested. If the eligible employee instead chooses to receive 25% of his bonus in cash and invests the remaining 25% in our shares, he will receive a number of options equal to 2.3 times the number of shares he purchased, based on the gross amount of the bonus invested.

The shares granted and purchased under the Share-Based Compensation Plan are ordinary registered Anheuser-Busch InBev SA/NV shares. Holders of such shares have the same rights as any other registered shareholder, subject, however, to a three-year or five-year lock-up period, as described above.

In addition, the shares granted and purchased under the Share-Based Compensation Plan are:

 

   

entitled to dividends paid as from the date of granting; and

 

   

granted and purchased at market price at the time of granting. Nevertheless, our Board of Directors may, at its sole discretion, grant a discount on the market price.

 

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The matching options granted under the Share-Based Compensation Plan have the following features:

 

   

The exercise price is set equal to the market price of our shares at the time of granting;

 

   

Options cannot be repriced;

 

   

Options have a maximum life of 10 years and an exercise period that starts after five years, subject to financial performance conditions to be met at the end of the third, fourth or fifth year following the granting;

 

   

Upon exercise, each option entitles the option holder to one share;

 

   

Upon exercise, holders of options may be entitled to receive from us a cash payment equal to the dividends we have declared since the options were granted;

 

   

Specific restrictions or forfeiture provisions apply in case of termination of service; and

 

   

Except as a result of the death of the holder, options granted under the Share-Based Compensation Plan may not be transferred.

The table below gives an overview of the matching options that have been granted under the Share-Based Compensation Plan that were outstanding as at 30 June 2009:

 

Issue Date

   Number of
bonus shares
granted
   Number of
matching
options
granted
   Number of
matching
options
outstanding
   Exercise
price
   

Expiry date of options

     (in millions)    (in millions)    (in millions)    (in EUR)      

27 April 2006

   0.28    0.98    0.739    24.78     

26 April 2016

2 April 2007

   0.44    1.42    1.155    33.59 (1)    

1 April 2017

3 March 2008

   0.42    1.66    1.550    34.34     

2 March 2018

6 March 2009

   0.16    0.40    0.381    20.49     

5 March 2019

                   

Total

   1.30    4.46    3.825     
                   

 

(1)

Certain matching options granted in April 2007 have an exercise price of EUR 33.79.

As of 30 June 2009, of the 3.825 million outstanding matching options, none were vested.

The Share-Based Compensation Plan terms and conditions provide that, in the event that a corporate change decided by us and having an impact on our capital has an unfavourable effect on the exercise price of the matching options, the exercise price and/or number of our shares to which the options relate will be adjusted to protect the interests of the option holders. Our December 2008 rights offering constituted such a corporate change and triggered an adjustment. Pursuant to the Share-Based Compensation Plan terms and conditions, the unexercised matching options were adjusted in the same manner as the unexercised LTI warrants (see “—Long-Term Incentive Plan or LTI” above), and 1.37 million new matching options were granted in 2008 in connection with this adjustment. The table above reflects the adjusted exercise price and number of options.

Exchange of Share-Ownership Programme

The combination with AmBev provided us with a unique opportunity to share best practices within our group and from time to time involves the transfer of certain members of AmBev’s senior management to us. In order to encourage management mobility and ensure that the interests of these managers are fully aligned with our interests, the Board approved a programme that aims at facilitating the exchange by these managers of their

 

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AmBev shares for our shares. Under the programme, AmBev shares can be exchanged for our shares based on the average share price of both the AmBev and our shares on the date the exchange is requested. A discount of 16.66% is granted in exchange for a five-year lock-up period for the shares and provided that the manager remains in service during this period.

Under the programme, members of our executive board of management exchanged AmBev shares for 531,649 of our shares in 2008.

In total, members of our senior management exchanged AmBev shares for a total of 0.9 million of our shares in 2008 (1.8 million in 2007 and 1.5 million in 2006). The fair value of these transactions amounted to approximately USD 11 million in 2008 (USD 25 million for 2007 and USD 13 million for 2006).

Anheuser-Busch Exceptional Options and Share Grants

In April 2009, we granted 5,926,090 options to employees of Anheuser-Busch, with an estimated fair value of approximately USD 53 million. Each option will give the grantee the right to purchase one of our existing shares. The exercise price of each option is EUR 23.00 which corresponds to the fair market value of our shares at the time the options were granted. The options will expire on 31 October 2013. One-third of the options became exercisable on 1 November 2009, the second third of the options will become exercisable on 1 November 2010 and the last third of the options will become exercisable on 1 November 2011. Special forfeiture rules apply should the grantee leave us.

In April 2009, we sold approximately 600,000 of our existing outstanding shares to approximately 110 executives of Anheuser-Busch. The shares were sold at their fair market value, less a discount of 16.66% in exchange for a five-year lock-up period applying to such shares. The discount is only granted if the executive remains in service until the end of the lock-up period.

2008 Exceptional Grant

In order to reinforce our high-performance culture, we granted, shortly after the completion of the Anheuser-Busch acquisition, 28,412,642 stock options to approximately 40 executives of Anheuser-Busch InBev SA/NV, Anheuser-Busch and AmBev, including our Chief Executive Officer and the other current members of our executive board of management. We believe that the selected executives will help to successfully integrate Anheuser-Busch and InBev, which will underpin our ability to quickly deleverage. This grant was confirmed by our 2009 annual shareholders’ meeting in accordance with the principles and provisions of the Belgian Corporate Governance Code. The fair value of the options is approximately USD 233 million.

One half of the stock options have a duration of 10 years as from granting and vest on 1 January 2014. The other half of the stock options have a duration of 15 years as from granting and vest on 1 January 2019. The exercise of the stock options is subject, among other things, to the condition that we meet a performance test. This performance test will be met if our net debt/EBITDA, as defined (adjusted for exceptional items) ratio falls below 2.5 before 31 December 2013. For our definition of EBITDA, as defined, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”. Except as a result of death of the holder, the stock options may not be transferred.

Our Chief Executive Officer was granted 3,253,358 options and the other members of our executive board of management were granted an aggregate of 9,326,286 options under the exceptional grant. The exercise price of the options is EUR 10.32, which corresponds to the fair market value of the shares at the time of the option grants, as adjusted for the rights offering that took place in December 2008.

 

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2009 Exceptional Grant

Under authorisation of our 2009 annual shareholders’ meeting we offered, on 30 April 2009, a maximum number of 5,000,000 options to approximately 50 executives of the AB InBev Group, none of whom are members of our executive board of management. Each option will give the grantee the right to purchase one of our existing shares. The exercise price of each option will correspond to the fair value of our shares at the time of granting of the options. The options will have a duration of 10 years as from granting and will become exercisable on 1 January 2014. The exercise of the options will be subject, among other things, to the condition that we meet a performance test. This performance test will be met if our net debt/EBITDA, as defined (adjusted for exceptional items) ratio falls below 2.5 before 31 December 2013. For our definition of EBITDA, as defined, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”. Specific forfeiture rules will apply in the case of employment termination. The fair value of the offered options was USD 47 million.

Fair Value of Our Warrants and Options

The fair value of the warrants and options under all of the plans and other grants detailed above is estimated at the relevant grant date, using a binomial Hull model, modified to reflect the International Financial Reporting Standards 2 Share-based Payment requirement that assumptions about forfeiture before the end of the vesting period cannot impact the fair value of the option.

We expense the fair value of the warrants and options over the vesting period. When granted, the LTI warrants granted in 2009 in respect of 2008 had a fair value of approximately USD 16.3 million and the Share-Based Compensation Plan matching options granted in 2009 in respect of 2008 had a fair value of approximately USD 5.9 million. When granted, the LTI warrants granted in 2008 in respect of 2007 had a fair value of approximately USD 3 million and the Share-Based Compensation Plan matching options granted in 2008 in respect of 2007 had a fair value of approximately USD 36 million.

The weighted average fair value of all of the warrants and options under all of the plans and other grants detailed above and the assumptions used in applying the option pricing model for the grants made in 2007, 2008 and 2009 were as follows:

 

     Six months ended     Year ended 31 December  

(Amounts in U.S. dollars unless otherwise indicated)

       30 June 2009             2008             2007      

Weighted average fair value of warrants and options granted

   13.33      38.17      31.15   

Share price (1)

   25.36      90.58      77.59   

Average exercise price

   18.25      86.62      72.53   

Expected volatility

   34   24   20

Expected dividends

   0.76   0.16   0.16

Risk-free interest rate

   3.49   4.47   4.47

 

(1)

2009 share price based on the weighted average price of our shares on Euronext Brussels in the acceptance period for the various warrant and options grants. The periods ran from 6 March 2009 and 23 June 2009; 2008 share price based on the average price of our shares on Euronext Brussels in the period between 3 March 2008 and 30 April 2008; 2007 share price based on the average price of our shares on Euronext Brussels in the period between 2 April 2007 and 30 May 2007.

Since the acceptance period of the warrants and options is two months, the fair value was determined as the average of the fair values calculated on a weekly basis during the two month offer period.

Expected volatility is based on historical volatility calculated using 1,410 days of historical data. A binomial Hull model assumes that all employees would immediately exercise their warrants and options if our share price is 2.5 times above the exercise price.

 

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The aggregate total number of our options and warrants outstanding under all the plans and other grants described above has developed as follows:

 

     Six months ended    Year ended 31 December

Million Options and Warrants

       30 June 2009            2008            2007            2006    

Options and warrants outstanding at start of period

   8.8    6.3    7.6    10.9

Options and warrants issued during the period

   35.9 (1)    1.1    1.0    1.2

Options and warrants exercised during the period

   (0.8)    (1.2)    (1.6)    (3.4)

Options and warrants forfeited during the period

   (0.3)    (0.4)    (0.7)    (1.1)

Additional options and warrants granted during the period as a result of the December 2008 rights issue

      3.0      
                   

Options and warrants outstanding at end of period

   43.6    8.8    6.3    7.6
                   

 

(1)

Comprises 1,199,203 warrants granted to directors under the LTI plan (see “—Long-Term Incentive Plan or LTI”), 400,797 matching options granted to members of the executive board of management and senior employees under the share-based compensation plan (see “—Share-Based Compensation Plan”), 5,926,090 exceptional options granted to former Anheuser-Busch employees (see “—Anheuser-Busch Exceptional Options and Share Grants”) and 28,412,642 options granted under the exceptional grant (see “—2008 Exceptional Grant”).

The weighted average exercise price of our outstanding options and warrants is as follows:

 

     Six months ended    Year ended 31 December
         30 June 2009            2008            2007    
     (Amounts in U.S. dollars)

Warrants and options outstanding at start of period

   34.42    46.50    35.48

Granted during the period (pre December 2008 rights issue)

   18.16    76.92    79.38

Granted during the period (adjustment factor)

      32.87   

Forfeited during the period

   37.30    56.63    45.00

Exercised during the period

   20.72    32.76    35.52

Outstanding at the end of the period

   21.46    34.42    46.50

Exercisable at the end of the period

   23.90    23.66    36.39

AmBev Option Programme

Under an equivalent 5-year cliff vesting plan (that is, options become fully exercisable after 5 years and do not vest progressively over time), AmBev issued 0.5 million options during the second quarter of 2009 for which the fair value amounted to approximately USD 27 million and 0.8 million options during the second quarter of 2008 for which the fair value amounted to approximately USD 35 million. During the second half of 2007, AmBev performed a reverse stock split in the ratio of 100:1. Consequently the 2007 figures in the table below have been restated to reflect the impact of this adjustment. The fair value of the options and assumptions used in applying a binomial option pricing model for the grants made by AmBev in 2009, 2008 and 2007 are as follows:

 

     Six months ended     Year ended 31 December  
( Amounts in U.S. dollars unless otherwise stated )        30 June 2009             2008             2007      

Fair value of options granted

   33.94      44.51      25.03   

Share price

   50.18      71.48      61.83   

Exercise price

   49.95      71.48      61.83   

Expected volatility

   48   33   26

Risk-free interest rate

   11.8   12.50   10.60

 

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Compensation of Directors and Executives

Unless otherwise specified, all compensation amounts in this section are gross of tax.

Board of Directors

Our directors receive fixed compensation in the form of annual fees and supplemental fees for physical attendance at Board committee meetings or supplemental Board meetings, and variable compensation in the form of LTI warrants. The compensation of our directors for each year is set annually at our shareholders meeting.

Board compensation in 2008

In 2008, the base annual fee for our directors was EUR 67,000 (USD 99,090) based on attendance at 10 Board meetings. The base supplement for each additional physical Board meeting or for each Committee meeting attended was EUR 1,500 (USD 2,218). Since 1999, we have also regularly issued warrants under the LTI plan for the benefit of our Board members. See “—Share-Based Payment Plans—Long-Term Incentive Plan or LTI” for a description of the LTI plan. In 2008, the base grant amounted to 9,000 LTI warrants.

The fees and warrants received by the Chairman of our Board in 2008 were double the respective base amounts. The Chairman of the Audit Committee was granted fees and warrants in 2008 which were 30% higher than the respective base amounts. All other directors received the base amount of fees and warrants. We do not provide pensions, medical benefits or other benefit programmes to directors.

The table below provides an overview of the fixed and variable compensation that our directors received in 2008.

 

Name

   Number
of Board
meetings
attended
   Annual fee
for Board
meetings
   Fees for
Committee
meetings
   Total fee    Number of
warrants
granted in
2008 (1)
          (EUR)    (EUR)    (EUR)     

August A. Busch IV (2)

   3    5,583    0    5,583    0

Allan Chapin (3)

   3    22,333    3,000    25,333    9,000

Jean-Luc Dehaene

   20    67,000    12,000    79,000    9,000

Stéfan Descheemaeker (4)

   18    44,667    4,500    49,167    0

Peter Harf

   21    134,000    22,500    156,500    18,000

Marcel Herrmann Telles

   21    67,000    30,000    97,000    9,000

Jorge Paulo Lemann

   21    67,000    7,500    74,500    9,000

Arnoud de Pret Roose de Calesberg

   21    67,000    27,000    94,000    9,000

Grégoire de Spoelberch

   22    67,000    9,000    76,000    9,000

Kees J. Storm

   18    87,100    24,000    111,100    11,700

Roberto Moses Thompson Motta

   20    67,000    7,500    74,500    9,000

Alexandre Van Damme

   22    67,000    9,000    76,000    9,000

Carlos Alberto da Veiga Sicupira

   18    67,000    9,000    76,000    9,000

Mark Winkelman

   20    67,000    7,500    74,500    9,000
                      

All directors as group

      896,683    172,500    1,069,183    119,700
                      

 

(1)

Warrants were granted under the LTI in April 2008. See “—Share-Based Payment Plans—Long-Term Incentive Plan or LTI”. The warrants have an exercise price of 58.31 euro per share, have a term of 5 years and vest over a 3-year period.

 

(2)

Member of our Board from 18 November 2008.

 

(3)

Mr. Chapin’s mandate was not renewed at our 2008 annual shareholders’ meeting, and he retired from the Board on 29 April 2008.

 

(4)

Member of our Board from 29 April 2008.

 

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Board compensation in 2009

For 2009, the base annual fee for our directors remains unchanged at EUR 67,000 (USD 99,090) based on attendance at 10 Board meetings. The base supplement for each additional physical Board meeting or for each Committee meeting attended was set at EUR 1,500 (USD 2,218). The base LTI grant for 2009 was set at 15,000 warrants. The Chairman of our Board will receive fees and warrants in 2009 that are double the respective base amounts. The Chairman of the Audit Committee will receive fees and warrants in 2009 that are 30% higher than the respective base amounts. All other directors will receive the base amount of fees and warrants in 2009.

Warrants and options held by directors

The following table sets forth information regarding the number of LTI warrants granted to the Board as a group during the past three years (based on membership on the date of issuance of the warrants).

 

Issuance date

   Number of warrants granted    Offer date    Exercise price in euro

25 April 2006

   124,035    2006    38.70

24 April 2007

   119,700    2007    55.41

29 April 2008

   119,700    2008    58.31

28 April 2009

   215,000    2009    21.72

The table below sets forth, for each of our current directors, the number of LTI warrants they owned as of 24 November 2009:

 

    LTI 17 (1)   LTI 16   LTI 15   LTI 14   LTI 13   LTI 12   LTI 10   LTI 9   LTI 8   Total options

Grant date

  28 April
2009
  29
April
2008
  24
April
2007
  25
April
2006
  26
April
2005
  27
April
2004
  10 Dec.
2002
  13
June
2002
  11
Dec.
2001
   

Expiry date

  28 April
2014
  29
April
2013
  24
April
2012
  25
April
2016
  26
April
2015
  27
April
2014
  10 Dec.
2012
  13
June
2012
  11
Dec.
2011
   

August A. Busch IV (2)

  15,000   0   0   0   0   0   0   0   0   15,000

Dehaene

  85,928   9,000   9,000   8,269   9,364   11,016   11,016   0   8,100   151,693

de Pret Roose de Calesberg

  70,365   9,000   9,000   8,269   9,364   11,016   0   8,100   0   125,114

Harf

  62,274   18,000   18,000   8,269   9,364   0   0   0   0   115,907

Lemann

  43,343   9,000   9,000   8,269   9,364   0   0   0   0   78,976

Thompson Motta

  43,343   9,000   9,000   8,269   9,364   0   0   0   0   78,976

Sicupira

  43,343   9,000   9,000   8,269   9,364   0   0   0   0   78,976

de Spoelberch

  20,395   9,000   0   0   0   0   0   0   0   29,395

Storm

  80,660   11,700   11,700   8,269   9,364   11,016   11,016   0   0   143,725

Telles

  43,343   9,000   9,000   8,269   9,364   0   0   0   0   78,976

Van Damme

  70,365   9,000   9,000   8,269   9,364   11,016   0   8,100   0   125,114

Winkelman

  43,343   9,000   9,000   8,269   9,364   0   0   0   0   78,976

Strike price (EUR)

  21.72   58.31   55.41   38.70   27.08   23.02   21.83   32.70   28.87  

 

(1)

The number of warrants granted under the 2009 LTI plan to current directors includes 421,702 of the 984,203 warrants that were granted on 28 April 2009 to compensate for warrants that were not adjusted to take account of the effects of our December 2008 rights offering. See “—Share-based Payment Plans—Long-Term Incentive Plan or LTI” for more details.

 

(2)

Member of our Board from 18 November 2008.

Stéfan Descheemaeker left our executive board of management and was appointed a non-executive director on 29 April 2008. In his former role as a member of our executive board of management, Mr. Descheemaeker received both LTI warrants and matching options under the Share-Based Compensation Plan. As he was not a director when he received the warrants and options in the table below, the amount and

 

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strike price of his LTI warrants and options received under the Share-Based Compensation Plan were adjusted as described in “—Share-Based Payment Plans”. The table below sets forth, for Mr. Descheemaeker, the number of LTI warrants he owned as of 24 November 2009:

 

Plan    Issue date    Expiry date    Number outstanding    Exercise price ( in EUR )

LTI 6 (1)

  

23 April 2001

  

22 April 2011

   31,030    18.59

LTI 8 (1)

  

11 December 2001

  

10 December 2011

   55,982    18.05

LTI 9 (1)

  

13 June 2002

  

12 June 2012

   27,991    20.44

LTI 10 (1)

  

10 December 2002

  

9 December 2012

   95,969    13.65

LTI 13 (1)

  

26 April 2005

  

25 April 2016

   80,577    16.93

Matching Options 2006 (2)

  

27 April 2006

  

26 April 2013

   54,909    24.78

LTI 17 (1)

  

28 April 2009

  

27 April 2014

   15,000    21.72

Total

         361,458   

 

(1)

Warrants granted under the LTI. See “—Share-Based Payment Plans—Long-Term Incentive Plan or LTI”.

 

(2)

Matching options granted under the Share-Based Compensation Plan. See “—Share-Based Payment Plans—Share-Based Compensation Plan”.

Board share ownership

The table below sets forth the number of our shares directly owned by our directors as at 24 November 2009:

 

Name

   Number of
our shares
held (1)
   % of our
outstanding
shares

August A. Busch IV (2)

   31,000    <1%

Jean-Luc Dehaene

   216    <1%

Stéfan Descheemaeker (3)

   491,850    <1%

Peter Harf

   527,880    <1%

Marcel Herrmann Telles

   0    0%

Jorge Paulo Lemann

   0    0%

Arnoud de Pret Roose de Calesberg

   42,608    <1%

Grégoire de Spoelberch

   707,800    <1%

Kees J. Storm

   0    0%

Roberto Moses Thompson Motta

   0    0%

Alexandre Van Damme

   66    <1%

Carlos Alberto da Veiga Sicupira

   0    0%

Mark Winkelman

   0    0%

 

(1)

Under the rules of the SEC, certain of our directors may also be deemed to own beneficially shares held by certain of our major shareholders: the Stichting, Eugénie Patri Sébastien S.A., and BRC S.à.R.L. See “Major Shareholders and Related Party Transactions—Major Shareholders”.

 

(2)

Member of our Board from 18 November 2008.

 

(3)

Stéfan Descheemaeker left our executive board of management and was appointed a non-executive director on 29 April 2008.

 

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Executive Board of Management (1)

The main elements of our executive remuneration are (i) base salary, (ii) bonus, (iii) sign-in bonus, (iv) post-employment benefits and (v) other compensation.

The focus of our executive remuneration policy is on annual and long-term variable pay, rather than on base salary. Base salaries are aligned to mid-market levels. Short- and long-term performance targets are linked to both short- and long-term incentives.

Through our Share-Based Compensation Plan, executives who demonstrate personal financial commitment to us by investing (all or part of) their annual bonus in our shares will be rewarded with the potential for significantly higher long-term compensation.

Our executive compensation and reward programs are overseen by our Compensation and Nominating Committee. It submits recommendations on the compensation of our Chief Executive Officer to the Board for approval. Upon the recommendation of our Chief Executive Officer, the Compensation and Nominating Committee also submits recommendations on the compensation of the other members of our executive management board to our Board for approval. Such submissions to our Board include recommendations on the annual targets and corresponding bonus scheme.

 

Our full executive remuneration policy is disclosed in our Corporate Governance Charter.

Base salary

In order to ensure alignment with market practice, once a year the base salaries of members of our executive board of management are reviewed versus benchmarks in relevant industries and geographies that have been collected by independent providers. Executives’ base salaries are intended to be aligned to mid-market levels for the appropriate market.

In 2008, our Chief Executive Officer earned a fixed salary of EUR 1.02 million (USD 1.51 million). The other members of our executive board of management earned an aggregate base salary of EUR 5.7 million (USD 8.4 million).

Bonuses

Bonuses for members of our executive board of management are designed to encourage executives to drive our short- to medium-term performance. We believe that our company and business zone targets are stretched, but achievable, and relate to more than one year to ensure high levels of sustained performance. Below a specified threshold, no bonus is earned, but for really outstanding performance, the bonus could be at upper quartile level (and even beyond) of the appropriate reference market. Even when company or entity targets are achieved, the actual payout of the bonus will also depend on the respective executive’s performance relative to individual targets.

 

(1)

Figures in this section may differ from the figures in the notes to our consolidated financial statements for the following reasons: (i) figures in this section are figures gross of tax, while figures in the notes to our consolidated financial statements are reported as “cost for the Company”; (ii) the split “short-term employee benefits” vs. “share-based compensation” in the notes to our consolidated financial statements does not correspond to the split “fixed salary” vs. “variable pay” in this section. Short-term employee benefits in the notes to our consolidated financial statements include the base salary and 50% of the bonus. Share-based compensation includes 50% of the bonus (portion paid in shares) and certain non-cash elements, such as the fair value of the options granted, which is based on financial pricing models; and (iii) the scope for the reporting is different as the figures in the notes to our consolidated financial statements also contain the remuneration of executives who left during the year, while figures in this section only contain the remuneration of executives who were in service at the end of the reporting year.

 

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As described under “—Share-Based Payment Plans—Share-Based Compensation Plan”, 50% of the bonus for each member of our executive board of management is delivered in the form of our shares to be held for three years. At the option of the respective executive, the remaining part of the bonus may be further deferred and will be matched with options on our shares.

Bonuses are generally paid annually in arrears after publication of our full year results. From 2009, however, bonuses may be paid out semi-annually at the discretion of the Board based on the achievement of semi-annual targets. In such cases, the first half of the respective bonus is paid immediately after publication of our half year results and the second half of the bonus is paid after publication of our full year results.

For 2008, since certain targets for our performance were not achieved, our Chief Executive Officer did not earn a bonus. Only certain members of our executive board of management earned a bonus, which amounted to EUR 1.85 million (USD 2.74 million) in aggregate. The 2008 bonus decision was based on our performance in 2008 compared to targets set for the year 2008 for our EBITDA, as defined (adjusted for exceptional items) growth, volume growth, market share growth and cost savings and on the performance of our executives compared to their individual targets. For our definition of EBITDA, as defined see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Six Months Ended 30 June 2009 Compared to Six Months Ended 30 June 2008—EBITDA, as defined”. As a result, under our Share-Based Compensation Plan in 2009 (corresponding to the bonus awarded for 2008 performance), the only member of our executive board of management to acquire our bonus shares and receive matching options was Miguel Patricio, who received 26,872 bonus shares and 80,765 matching options. The offer date for such matching options was 6 March 2009 and the exercise price is EUR 20.49. For additional information on the Share-Based Compensation Plan, see “—Share-Based Payment Plans—Share-Based Compensation Plan”. The other members of our executive board of management to receive a bonus in 2008 were Joao Castro Neves and Bernardo Pinto Paiva, who received their bonus under the AmBev option programme: see “—Share-Based Payment Plans—AmBev Option Programme”.

The following table sets forth information regarding the number of our shares and matching options granted to our Chief Executive Officer and the other members of our executive board of management under our Share-Based Compensation Plan in 2008 (corresponding to the bonus awarded for 2007 performance). The offer date for all such matching options was 3 March 2008 and the exercise price is EUR 34.34.

 

Name

   InBev
shares
acquired
in 2008
   Matching
options
granted
in 2008

Carlos Brito—Chief Executive Officer

   47,683    229,219

Alain Beyens

   15,831    0

Chris Burggraeve

   6,549    24,091

Sabine Chalmers

   11,763    68,791

Stéfan Descheemaeker (1)

   743    0

Felipe Dutra

   18,312    88,031

Claudio Braz Ferro

   15,186    73,002

Claudio Garcia

   16,972    81,590

Miguel Patricio

   12,892    61,974

Jo Van Biesbroeck

   8,954    0

Francisco Sá

   1,525    7,335

João Castro Neves

     

Luiz Fernando Edmond

     

Bernardo Pinto Paiva

     

 

(1)

Stéfan Descheemaeker left the executive board of management and was appointed a non-executive director on 29 April 2008.

 

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As a consequence of the rights offering that took place in December 2008, the exercise price and the number of options held by members of the executive board of management were adjusted according to the ratio method proposed by Euronext Liffe in order to compensate for the dilutive effect of such rights offering. The adjustment ratio was 0.6252. The adjusted exercise price of the options equals the original exercise price multiplied by the adjustment ratio. The adjusted number of options equals the original number of subscription rights divided by the adjustment ratio. The exercise price and number of options granted indicated above have been adjusted for the effects of the December 2008 rights offering.

Sign in bonus

Newly-hired members of the executive board of management may be granted a right to purchase our shares at the time the bonus is next granted to senior employees, upon recommendation to the Board of the Compensation and Nominating Committee. The purchase price of such shares will be the market price of our shares at the time the next bonus is granted under our Share-Based Compensation Plan. We will then grant these newly-hired executives a number of options equal to 2.3 times the number of shares so purchased. These options have the same features as matching options granted under the Share-Based Compensation Plan. See “—Share-Based Payment Plans—Share-Based Compensation Plan”.

Post-employment benefits

We sponsor various post-employment benefit plans world-wide. These include pension plans, both defined contribution plans and defined benefit plans, and other post-employment benefits. See note 26 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008 for further details on our employee benefits.

Defined contribution plans . For defined contribution plans, we pay contributions to publicly or privately administered pension funds or insurance contracts. Once the contributions have been paid, we have no further payment obligation. The regular contribution expenses constitute an expense for the year in which they are due. For 2008, our defined contribution expenses amounted to USD 17 million compared to USD 7 million for 2007.

Defined benefit plans. We contribute to 72 defined benefit plans, of which 57 are retirement plans and 15 are medical cost plans. Most plans provide benefits related to pay and years of service. In 2008, the deficit under our defined benefit plans increased to USD 2,921 million with the Anheuser-Busch benefit plans contributing a deficit of USD 2,181 million. We expect to contribute approximately USD 273 million to our defined benefit plans in 2009.

Our executives participate in our pension schemes in either Belgium or their home country. These schemes are in line with predominant market practices in the respective geographic environments.

Our Chief Executive Officer participates in a defined contribution plan. Our annual contribution to his plan amounts to approximately EUR 36,000 (USD 53,241). The total amount we had set aside to provide pension, retirement or similar benefits for members of our executive board of management in the aggregate as of 30 June 2009 was USD 1 million, as compared to USD 3 million as of 31 December 2008. See note 20 to our unaudited consolidated interim financial statements for the six months ended 30 June 2009 and note 34 to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Other compensation

We also provide executives with life and medical insurance and perquisites and other benefits that are competitive with market practice in the markets where such executives are employed. In addition, the members of our executive board of management enjoy certain expatriate perquisites such as a housing allowance in accordance with local market practice.

 

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Employment agreements and termination arrangements

Our executives’ employment and termination arrangements are in line with legal requirements and/or jurisprudential practice.

We appointed Carlos Brito to serve as our Chief Executive Officer starting as of 1 March 2006. In the event of termination of his employment other than on the grounds of serious cause, Mr. Brito is entitled to a termination indemnity of 12 months of remuneration and, provided he is eligible for it, a pro-rated performance bonus for the year of his termination.

Warrants and options owned by executives

The table below sets forth the number of LTI warrants and matching options owned by the members of our executive board of management as of 24 November 2009 under the LTI and the Share-Based Compensation Plan.

 

    Matching
options
2009 (1)
  Matching
options
2009 (1)
  Matching
options
2008 (1)
  Matching
options
2007 (1)
  Matching
options
2006 (1)
  LTI
13 (2)
  LTI
12 (2)
  LTI 8 (2)   LTI
5 (2)
  Total
options

Grant date

  14
August
2009
  6 March
2009
  3 March
2008
  2 April
2007
  27 April
2006
  26
April
2005
  27
April
2004
  11 Dec.
2001
  13
March
2001
   

Expiry date

  14
August
2019
  6 March
2019
  3 March
2018
  2 April
2017
  27 April
2016
  26
April
2015
  27
April
2014
  11 Dec.
2011
  13
March
2011
   

Carlos Brito

  368,827   0   229,219   222,057   46,742   0   0   0   0   866,845

Sabine Chalmers

  68,734   0   68,791   75,197   19,503   95,170   0   0   0   327,395

Alain Beyens

  0   0   0   0   9,211   0   0   0   0   9,211

Jo Van Biesbroeck

  122,600   0   0   0   47,438   95,170   143,955   55,982   32,470   497,615

Felipe Dutra

  126,139   0   88,031   109,733   118,452   0   0   0   0   442,355

Claudio Garcia

  156,502   0   81,590   82,959   73,792   0   0   0   0   394,843

Claudio Ferro

  181,235   0   73,002   23,652   0   0   0   0   0   277,889

Chris Burggraeve

  151,861   0   24,091   0   0   0   0   0   0   175,952

Tony Milikin

  0   0   0   0   0   0   0   0   0   0

Miguel Patricio

  140,106   80,765   61,974   0   0   0   0   0   0   282,845

Francisco Sá

  140,106   0   7,335   0   0   0   0   0   0   147,441

João Castro Neves

  0   0   0   0   0   0   0   0   0   0

Luiz Fernando Edmond

  274,325   0   0   0   0   0   0   0   0   274,325

Bernardo Pinto Paiva

  0   0   0   0   0   0   0   0   0   0

Strike price (EUR)

  27.06   20.49   34.34   33.59   24.78   16.93   14.39   18.05   18.90  

 

(1)

Matching options granted under the Share-Based Compensation Plan. See “—Share-Based Payment Plans—Share-Based Compensation Plan”.

 

(2)

Warrants granted under the LTI. See “—Share-Based Payment Plans—Long-Term Incentive Plan or LTI”.

In 2008, the members of our executive board of management also received options under the exceptional grant made in respect of the Anheuser-Busch acquisition. See “—Share-Based Payment Plans—2008 Exceptional Grant”.

 

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Executive share ownership

The table below sets forth the number of our shares owned by the members of the executive board of management as at 24 November 2009:

 

Name

   Number of our
shares held (1)
   % of our
outstanding
shares

Carlos Brito

   4,026,005    <1%

Sabine Chalmers

   101,309    <1%

Alain Beyens

   45,007    <1%

Jo Van Biesbroeck

   189,336    <1%

Felipe Dutra

   1,393,484    <1%

Claudio Garcia

   679,729    <1%

Claudio Ferro

   2,003,191    <1%

Chris Burggraeve

   218,883    <1%

Tony Milikin

   0    0%

Miguel Patricio

   1,025,817    <1%

Francisco Sá

   332,348    <1%

João Castro Neves

   312.400    <1%

Luiz Fernando Edmond

   61,747    <1%

Bernardo Pinto Paiva

   0    0%

 

(1)

In November 2009, a number of options held by certain members of our executive board of management were exchanged for restricted shares. Such shares are subject to restrictions on transfer until 31 December 2018.

Anheuser-Busch

Retention programme

In connection with the Anheuser-Busch acquisition, we and Anheuser-Busch agreed to establish an employee retention programme providing integration bonuses and severance benefits for certain key employees of Anheuser-Busch. This programme became effective as of the closing of the acquisition.

Integration bonus

Approximately 60 key employees of Anheuser-Busch (including Anheuser-Busch’s executive officers at the time of the Anheuser-Busch merger other than Mr. Busch IV, who terminated his employment with Anheuser-Busch upon the occurrence of the merger) were eligible to receive an additional bonus for 2008 equal to 40% of the target bonus otherwise payable to that employee under the pre-existing Anheuser-Busch bonus programmes. The amount of the additional bonus depended upon the extent of achievement of projected 2008 savings under Anheuser-Busch’s Blue Ocean programme. In addition, approximately 360 key employees of Anheuser-Busch (including Anheuser-Busch’s executive officers, other than Mr. Busch IV) will be eligible to receive a bonus ranging from 80% to 110% of the employee’s 2009 target bonus award. The extent to which the bonus exceeds 80% of the employee’s 2009 target bonus will depend on the extent of achievement of the Blue Ocean operating goals through 2009. In order to qualify for this integration bonus, the employee generally must be employed until the date on which annual bonuses for 2009 are paid in the ordinary course, though an employee who is involuntarily or constructively terminated after the closing and prior to the bonus payment will be eligible to receive a pro-rata payment.

Enhanced severance

The retention plan also provided that the same group of approximately 360 employees (including Anheuser-Busch’s executive officers at the time of the Anheuser-Busch merger, other than Mr. Busch IV) are eligible for enhanced severance benefits payable upon an involuntary or constructive termination of employment

 

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within two years following the closing of the merger. These severance benefits range from 15 months of base salary to 2 times the sum of base salary and target bonus and include continuation of medical, insurance and welfare benefits ranging from 15 to 24 months (in each case, depending on the particular employee category). The retention plan provided that approximately 60 of these employees (including Anheuser-Busch’s executive officers at the time of the merger, other than Mr. Busch IV) are, if necessary, eligible for a modified gross-up payment on amounts that are subject to the excise tax imposed by under Section 4999 of the United States Internal Revenue Code but only if the total value of all “parachute payments” to the individual exceeds 110% of the individual’s “safe harbour” amount. The enhanced severance programme also contained customary restrictive obligations, including an agreement not to compete with Anheuser-Busch for a period ranging from 12 to 24 months. Constructive termination includes a material reduction of compensation, a material reduction in duties and responsibilities from those in effect immediately prior to closing of the merger and relocation of more than 50 miles.

BOARD PRACTICES

General

Our directors are appointed by our shareholders meeting, which sets their remuneration and term of mandate. Their appointment is published in the Belgian Official Gazette ( Moniteur belge ). No service contract is concluded between us and our directors with respect to their Board mandate. Our Board also may request a director to carry out a special mandate or assignment. In such case a special contract may be entered into between us and the respective director. For details of the current directors’ terms of office, see “—Directors and Senior Management—Board of Directors”. We do not provide pensions, medical benefits or other benefit programmes to directors.

August A. Busch IV consulting agreement

In connection with the Anheuser-Busch acquisition, we entered into a consulting agreement with Mr. Busch IV which became effective as of the closing of the Anheuser-Busch merger and will continue until 31 December 2014. In his role as consultant, Mr. Busch IV will, at the request of our Chief Executive Officer, provide advice to us on Anheuser-Busch new products and new business opportunities; review Anheuser-Busch marketing programmes; meet with retailers, wholesalers and key advertisers of Anheuser-Busch; attend North American media events; provide advice with respect to Anheuser-Busch’s relationship with charitable organisations and the communities in which it operates; and provide advice on the taste, profile, and characteristics of the Anheuser-Busch malt-beverage products. See “Major Shareholders and Related Party Transactions—Related Party Transactions—Consulting Agreement”.

Information About Our Committees

General

Our Board is assisted by three main committees: the Audit Committee, the Finance Committee and the Compensation and Nominating Committee.

The existence of the Committees does not affect the responsibility of our Board. Board committees meet to prepare matters for consideration by our Board. By exception to this principle, (i) the Compensation and Nominating Committee may make decisions on individual compensation packages, other than with respect to our Chief Executive Officer and our executive board of management (which are submitted to our Board for approval), and on performance against targets and (ii) the Finance Committee may make decisions on matters specifically delegated to it under our Corporate Governance Charter, in each case without having to refer to an additional Board decision. Each or our Committees operates under typical rules for such committees under Belgian law, including the requirement that a majority of the members must be present for quorum and decisions are taken by a majority of members present.

 

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The Audit Committee

The Audit Committee’s Chairman and a majority of the Committee members are appointed by the Board from among the independent directors. The Chairman of the Audit Committee is not the Chairman of the Board. The Chief Executive Officer, Chief Legal Officer and Chief Financial Officer are invited to the meetings of the Audit Committee.

The current members of the Audit Committee are Jean-Luc Dehaene, Arnoud de Pret Roose de Calesberg, Peter Harf and Kees Storm (Chairman). Each member of our Audit Committee is currently an independent director under Belgian law (see “—Directors and Senior Management—Board of Directors—Role and Responsibilities, Composition, Structure and Organisation”) and under Rule 10A-3 under the Exchange Act, except Arnoud de Pret Roose de Calesberg. We plan to have each member of our audit committee be an independent director as required under Rule 10A-3 under the Exchange Act within a year of the effective date of this Form F-4. There is no minimum size for the Audit Committee.

The Audit Committee assists our Board in its responsibility for oversight of (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the statutory auditors’ qualification and independence and (iv) the performance of the statutory auditors and our internal audit function. The Audit Committee is entitled to review information on any point it wishes to verify, and is authorised to acquire such information from any of our employees. It is also authorised to obtain independent advice, including legal advice, if this is necessary for an inquiry into any matter under its responsibility. It is entitled to call on the resources that will be needed for this task. It is entitled to receive reports directly from the statutory auditor, including reports with recommendations on how to improve our control processes.

The Audit Committee holds as many meetings as necessary with a minimum of four a year.

The Finance Committee

The Finance Committee consists of at least three but no more than six members appointed by the Board. The Board appoints a Chairman and if deemed appropriate, a Vice-Chairman from among the Finance Committee members. The Chief Executive Officer and the Chief Financial Officer are invited ex officio to the Finance Committee meetings unless specifically decided otherwise. Other employees are invited on an ad hoc basis as deemed useful.

The current members of the Finance Committee are Stéfan Descheemaeker, Arnoud de Pret Roose de Calesberg (Chairman), Jorge Paulo Lemann, Roberto Moses Thompson Motta and Mark Winkelman.

The Finance Committee meets at least four times a year and as often as deemed necessary by its Chairman or at least two of its members.

The Finance Committee assists the Board in fulfilling its oversight responsibilities in the areas of corporate finance, risk management, corporate controls, mergers and acquisitions, tax and legal, pension plans, financial communication and stock market policies and all other related areas as deemed appropriate.

The Compensation and Nominating Committee

The Compensation and Nominating Committee Chairman and committee members are appointed by the Board from among the directors, including at least one member from among the independent directors. The Chief Executive Officer and the Chief People and Technology Officer are invited to attend the meetings of the Compensation and Nominating Committee.

The current members of the Compensation and Nominating Committee are Carlos Alberto da Veiga Sicupira, Grégoire de Spoelberch, Peter Harf, Marcel Herrmann Telles (Chairman) and Alexandre Van Damme. There is no minimum size for the Compensation and Nominating Committee.

 

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The Compensation and Nomination Committee makes recommendations to the Board and assists with all its decisions on the compensation and management of people. The main objectives of the Compensation and Nomination Committee are to ensure that: 1) we have exceptional people who occupy appropriate positions and who are incentivised to achieve, and are compensated for, exceptional performance; 2) the maintenance and continuous improvement of our compensation policy which will be based on meritocracy with a view to aligning the interests of our employees with the interests of all of our shareholders; 3) we develop successors for all key positions; 4) we nurture a culture of ownership, simplicity, efficiency, high ethical standards and the permanent quest to improve results; and 5) individual goals are established to align the interests of all of our employees with our goals and objectives as set by the Board.

The Compensation and Nominating Committee meets every two months and endeavours to hold one meeting per year in each of the principal geographic zones in which the Company operates: Asia, Central & Eastern Europe, Western Europe, Latin America and North America.

EMPLOYEES

As at December 31 2008, we employed approximately 120,000 people.

Overview of Employees per Zone

The table below sets out the number of full-time employees at the end of each relevant period in our business zones.

 

     As of 31 December  
     2008    2007    2006    2005  

North America

   22,892    5,662    6,337    6,537   

Latin America North

   28,517    25,998    24,872    27,305 (1)  

Latin America South

   7,554    7,290    5,306   

Western Europe

   10,298    11,481    12,122    13,093   

Central & Eastern Europe

   16,054    13,509    13,356    13,730   

Asia Pacific

   22,509    24,056    22,925    16,032   

Global Export & Holding Companies

   12,050    694    699    669   
                     

Total

   119,874    88,690    85,617    77,366   
                     

 

(1)

The number of 27,305 covers both Latin America North and Latin America South, which operated as one single business zone in 2005.

Due to the seasonal nature of our former entertainment business, our former subsidiary, Busch Entertainment Corporation, hired a significant number of temporary employees in each of the years covered in the table above, peaking during the summer months (for an average of 10,294 temporary employees per month in 2008). For further information regarding the sale of our entertainment business, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions”.

Employee Compensation and Benefits

To support our culture which recognises and values results, we offer employees competitive salaries benchmarked to fixed mid-market local salaries, combined with variable incentive schemes based on individual performance and performance of the business entity in which they work. Senior employees above a certain level are eligible for the Share-Based Compensation Plan. See “—Compensation—Share-Based Payment Plans—Share-Based Compensation Plan” and “—Compensation—Compensation of Directors and Executives—Executive Board of Management”. Depending on local practices, we offer employees and their family members pension plans, life insurance, medical, dental and optical insurance, death in service insurance, illness and disability insurance. Some of our countries have tuition reimbursement plans and employee assistance programmes.

 

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Labour Unions

Many of our hourly employees across our business zones are represented by unions. Generally, relationships between us and the unions that represent our employees are good. See “Risk Factors—Risks Relating to Our Business—We may not be able to recruit or retain key personnel.”

In Western Europe, collective bargaining occurs at national level in Belgium and Netherlands, and at the local level in all other countries. The degree of membership in unions varies from country to country, with a low proportion of membership in the United Kingdom and the Netherlands, and a high proportion of membership in Belgium and Germany.

In the U.S., a majority of our hourly employees at breweries are represented by the International Brotherhood of Teamsters. On 3 October 2008, Anheuser-Busch and the International Brotherhood of Teamsters jointly announced that their representatives had successfully concluded contract negotiations and reached tentative agreement on all local, national and economic issues. The agreement was ratified on 6 November 2008, nearly four months ahead of expiration of the current contract, and runs through 28 February 2014. The contract includes wage increases in each year of the agreement, totalling 15% over the next five years, and the renewal of Anheuser-Busch’s contractual commitment to keep all 12 U.S. breweries open for the life of the contract.

In Canada, since the beginning of 2008, we have not had any labour disruptions. Two collective agreements were negotiated during that period, each with 7 year terms. Nine collective agreements will expire in 2009, which cover plant, distribution, sales and office employees in Quebec.

 

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MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

Shareholding Structure

The following table shows our shareholding structure based on the notifications made to the Belgian Banking, Finance and Insurance Commission (the “ CBFA ”) and to us on the date specified below by the shareholders specified below in accordance with Article 14 of the Belgian Law of 2 May 2007 on the disclosure of significant shareholdings in listed companies.

The first seven entities mentioned in the table act in concert (see “—Shareholders’ Arrangements”) and hold 856,624,539 of our shares, representing 53.43% of the voting rights attached to our shares outstanding as of 18 September 2009, the date of the most recent notification.

All of our shares have the same voting rights.

 

Major shareholders

  Number of
our shares held
    % of the voting rights
attached to our
outstanding shares
held
  Date of notification
of interest

Stichting Anheuser-Busch InBev, a stichting incorporated under Dutch law (1)

  722,339,815 (2)     45.05%   18 September 2009

Eugénie Patri Sébastien S.A., a company incorporated under Luxembourg law affiliated to the Stichting that it jointly controls with BRC S.à.R.L. (3)

  114,160,320      7.12%   18 September 2009

Rayvax Société d’Investissement NV/SA, a company incorporated under Belgian law

  10      <0.01%   18 September 2009

Fonds Voorzitter Verhelst SPRL, a company with a social purpose incorporated under Belgian law

  7,147,665      0.45%   18 September 2009

Fonds InBev-Baillet Latour SPRL, a company with a social purpose incorporated under Belgian law

  5,485,415      0.34%   18 September 2009

BRC S.à.R.L., a company incorporated under Luxembourg law, affiliated to the Stichting that it jointly controls with Eugénie Patri Sébastien S.A. (4)

  7,006,520      0.44%   18 September 2009

Sébastien Holding NV/SA, a company incorporated under Belgian law, affiliated to Rayvax Société d’Investissement NV/SA, its parent company

  484,794      0.03%   18 September 2009

Anheuser-Busch InBev SA/NV

  11,114,722      0.69%   18 September 2009

Brandbrew S.A., a company incorporated under Luxembourg law and a subsidiary of Anheuser-Busch InBev

  8,747,814      0.55%   18 September 2009

Capital Research and Management Cy

  37,286,264      2.33%   18 December 2008

Janus Capital Management LLC

  65,130,090      4.06%   1 July 2009

Fidelity Management & Research LLC

  48,561,873      3.03%   16 September 2009

 

(1)

See section “—Controlling Shareholder”. By virtue of their responsibilities as directors of the Stichting, Stéfan Descheemaeker, Arnoud de Pret Roose de Calesberg, Grégoire de Spoelberch, Alexandre Van Damme, Marcel Herrmann Telles, Jorge Paulo Lemann, Roberto Moses Thompson Motta and Carlos Alberto da Veiga Sicupira may be deemed, under the rules of the SEC, to be beneficial owners of our ordinary shares held by the Stichting. However, each of these individuals disclaims such beneficial ownership in such capacity.

 

(2)

See section “—Shareholders’ Arrangements”.

 

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(3)

By virtue of their responsibilities as directors of Eugénie Patri Sébastien S.A., Stéfan Descheemaeker, Arnoud de Pret Roose de Calesberg, Grégoire de Spoelberch and Alexandre Van Damme may be deemed, under the rules of the SEC, to be beneficial owners of our ordinary shares held by Eugénie Patri Sébastien S.A. However, each of these individuals disclaims such beneficial ownership in such capacity.

 

(4)

Marcel Herrmann Telles, Jorge Paulo Lemann and Carlos Alberto da Veiga Sicupira have disclosed to us that they control BRC S.à.R.L and as a result, under the rules of the SEC, they are deemed to be beneficial owners of our ordinary shares held by BRC S.à.R.L. By virtue of his responsibility as a director of BRC S.à.R.L, Roberto Moses Thompson Motta may also be deemed, under the rules of the SEC, to be the beneficial owner of our ordinary shares held by BRC S.à.R.L. However, Roberto Moses Thompson Motta disclaims such beneficial ownership in such capacity.

In the past three years, the only significant change of which we have been notified in the percentage ownership of our shares by our major shareholders described above was as a result of our December 2008 rights offering. In their last disclosure to the CBFA prior to the December 2008 rights offering, on 1 September 2008, the first seven entities in the table above, who act in concert, held 391,112,307 of our shares, representing 63.49% of the voting rights attached to our shares outstanding as of such date. The Stichting similarly notified us that it held 321,712,000 of our shares, representing 52.22% of the voting rights attached to our shares outstanding as of such date.

U.S. Resident shareholders

As a number of our shares are held in dematerialized form, we are not aware of the identity of all our shareholders. As of 30 July 2009, we had 2,678,340 registered shares held by 135 U.S. resident shareholders, representing 0.17% of the voting rights attached to our shares outstanding as of such date. In addition, Fidelity Management and Research LLC, a U.S. resident holder, notified us on 21 May 2009 that it held 54,706,115 ordinary shares, representing 3.41% of the voting rights attached to our shares outstanding as of such date and Janus Capital Management LLC, also a U.S. resident holder, notified us on 1 July 2009 that it held 65,130,090 ordinary shares, representing 4.06% of the voting rights attached to our shares outstanding as of such date. As of 31 July 2009, we also had 3,455,700 ADSs outstanding, each representing one ordinary share, which are held by one U.S. resident holder.

Controlling Shareholder

Our controlling shareholder is the Stichting, a foundation ( stichting ) organised under the laws of the Netherlands which represents an important part of the interests of the founding Belgian families of Interbrew (mainly represented by Eugénie Patri Sébastien S.A.) and the interests of the Brazilian families which were previously the controlling shareholders of AmBev (represented by BRC S.à.R.L).

As of 18 September 2009, the Stichting owned 722,339,815 of our shares, which represented a 45.05% voting interest in us based on the number of our shares outstanding as of 18 September 2009. The Stichting and certain other entities acting in concert with it (see “—Shareholders’ arrangements” below) held, in the aggregate, 53.43% of our shares based on the number of our shares outstanding on 18 September 2009. The Stichting is governed by its bylaws and its conditions of administration.

Shareholders’ Arrangements

In connection with the combination of Interbrew with AmBev in 2004, BRC S.à.R.L, Eugénie Patri Sébastien S.A., Rayvax Société d’Investissement NV/SA and the Stichting entered into a shareholders’ agreement on 2 March 2004 which provides for BRC S.à.R.L and Eugénie Patri Sébastien S.A. to hold their interests in us through the Stichting (except for approximately 114 million of our shares that are held directly by Eugénie Patri Sébastien S.A. and 7,006,520 of our shares that are held directly by BRC S.à.R.L as of 18 September 2009 (see “—Shareholding Structure”)) and addresses, among other things, certain matters relating to the governance and management of the Stichting and Anheuser-Busch InBev SA/NV as well as the transfer of the Stichting certificates. As of 18 September 2009, BRC S.à.R.L held 357,988,615 class B Stichting certificates

 

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(indirectly representing 357,988,615 of our shares) and Eugénie Patri Sébastien S.A. held 364,351,200 class A Stichting certificates (indirectly representing 364,351,200 of our shares). The shareholders’ agreement was amended and restated on 9 September 2009 and has been filed as Exhibit 9.1 to this Form F-4.

Pursuant to the terms of the shareholders’ agreement, BRC S.à.R.L and Eugénie Patri Sébastien S.A. jointly and equally exercise control over the Stichting and those of our shares held by the Stichting. Among other things, BRC S.à.R.L and Eugénie Patri Sébastien S.A. have agreed that the Stichting will be managed by an eight-member board of directors and that each of BRC S.à.R.L and Eugénie Patri Sébastien S.A. will have the right to appoint four directors to the Stichting board of directors. At least seven of the eight Stichting directors must be present in order to constitute a quorum of the Stichting board, and any action to be taken by the Stichting board of directors will, subject to certain qualified majority conditions, require the approval of a majority of the directors present, including at least two directors appointed by BRC S.à.R.L and two appointed by Eugénie Patri Sébastien S.A. Subject to certain exceptions, all decisions of the Stichting with respect to our shares held by it, including how such shares will be voted at our shareholders’ meetings, will be made by the Stichting board of directors.

The shareholders’ agreement requires the Stichting board of directors to meet prior to each of our shareholders’ meetings to determine how those of our shares held by the Stichting will be voted.

The shareholders’ agreement as amended provides for restrictions on the ability of BRC S.à.R.L and Eugénie Patri Sébastien S.A. to transfer their Stichting certificates (and consequently their shares in us held through the Stichting).

In addition, the shareholders’ agreement requires Eugénie Patri Sébastien S.A., BRC S.à.R.L and their permitted transferees under the shareholders’ agreement whose shares in us are not held through the Stichting to vote their shares in us in the same manner as our shares held by the Stichting and to effect any transfers of their shares in us in an orderly manner of disposal that does not disrupt the market for our shares and in accordance with any conditions established by us to ensure such orderly disposal. In addition, under the shareholders’ agreement, Eugénie Patri Sébastien S.A. and BRC S.à.R.L agree not to acquire any shares of AmBev’s capital stock, subject to limited exceptions.

Pursuant to the shareholders’ agreement, the Stichting board of directors proposes the nomination of eight directors to our shareholders’ meeting, among which each of BRC S.à.R.L and Eugénie Patri Sébastien S.A. have the right to nominate four directors. In addition, the Stichting board of directors proposes the nomination of four to six directors to our Board who are independent of shareholders.

The shareholders’ agreement will remain in effect for an initial term of 20 years starting from 27 August 2004. Thereafter, it will be automatically renewed for successive terms of 10 years each unless, not later than two years prior to the expiration of the initial or any successive 10-year term, either BRC S.à.R.L or Eugénie Patri Sébastien S.A. notifies the other of its intention to terminate the shareholders’ agreement.

In addition, the Stichting has entered into a voting agreement with Fonds InBev-Baillet Latour SPRL and Fonds Voorzitter Verhelst SPRL, a copy of which has been filed as Exhibit 9.2 to this Form F-4. This agreement provides for consultations between the three bodies before any of our shareholders’ meetings to decide how they will exercise the voting rights attached to our shares. Under this voting agreement, consensus is required for all items that are submitted to the approval of any of our shareholders’ meetings. If the parties fail to reach a consensus, the Fonds InBev-Baillet Latour SPRL and Fonds Voorzitter Verhelst SPRL will vote their shares in the same manner as the Stichting. This agreement will expire on 16 October 2016, but is renewable.

 

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RELATED PARTY TRANSACTIONS

Material Transactions

AB InBev and Consolidated Entities

We engage in various transactions with affiliated entities which form part of the consolidated AB InBev Group. These transactions include: (i) the purchase and sale of raw material with affiliated entities, (ii) entering into distribution, cross-licensing, and other agreements with affiliated entities, (iii) intercompany loans and guarantees, with affiliated entities, (iv) import agreements with affiliated entities, such as the import agreement under which Anheuser-Busch imports our European brands into the United States and (v) royalty agreements with affiliated entities, such as our royalty agreement with one of our United Kingdom subsidiaries related to the production and sale of our Stella Artois brand in the United Kingdom. Such transactions between Anheuser-Busch InBev SA/NV and our subsidiaries are not disclosed in our consolidated financial statements as related party transactions because they are eliminated on consolidation. A list of our principal subsidiaries is shown in note 36 “AB InBev Companies” to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of our interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Transactions with associates and jointly controlled entities are discussed further below.

Where these are eliminated on consolidation, transactions between Anheuser-Busch InBev SA/NV and our subsidiaries are not disclosed in our consolidated financial statements as related party transactions. A list of our principal subsidiaries is shown in note 36 “AB InBev Companies” to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Transactions with Directors and Executive Board of Management Members (Key Management Personnel)

Total compensation of our directors and executive board of management included in our income statement for the periods set out below can be detailed as follows:

 

    Six months ended   Year ended 31 December
    30 June 2009   2008   2007   2006
    Directors   Executive
Board
Management
  Directors   Executive
Board
Management
  Directors   Executive
Board
Management
  Directors   Executive
Board
Management
    (USD million)

Short-term employee benefits

  2   42   12   22   1   44   3   40

Post-employment benefits

    1     3     1     1

Termination benefits

            8     10

Share-based payments

  1   30   2   15   1   23   1   15
                               

Total

  3   73   14   40   2   76   4   66
                               

In addition to short-term employee benefits (primarily salaries), our executive board of management members are entitled to post-employment benefits. More particularly, members of the executive board of management participate in the pension plan of their respective country. See also note 20 to our consolidated interim financial statements as of 30 June 2009, and for the six-month periods ended 30 June 2009 and note 26 “Employee benefits” and note 34 “Related parties” to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008. In addition, key management

 

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personnel are eligible for our Share-Based Payment Plan and/or our exchange of share ownership programme. See also “Directors, Senior Management and Employees—Compensation”, note 17 to our consolidated interim financial statements as of 30 June 2009, and for the six-month periods ended 30 June 2009 and note 27 “Share-based payments” to our audited consolidated financial statements as of 31 December 2008 and 2007, and for the three years ended 31 December 2008.

Directors’ compensations consist mainly of directors’ fees ( tantièmes ). Key management personnel were not engaged in any transactions with the Company and did not have any significant outstanding balances with the Company.

Loans to directors

Under the terms of our Corporate Governance Charter, we are prohibited from making loans to our directors or member of our executive board of management. In 1996, before he was a member of our Board, a 10 million Belgian franc (USD 344,993) loan was granted by us to Stéfan Descheemaeker, bearing no interest. The loan was part of the compensation package awarded to Mr. Descheemaeker when he joined us as Vice-President Industrial Strategy and Partnerships. The repayment schedule for the loan is 10 annual payments of EUR 24,789 (USD 34,499) from 2001. The maximum amount outstanding in the last three financial years was EUR 148,736 (USD 206,996) in 2006. As of the date of this Form F-4, approximately EUR 74,368 (USD 103,498) is still outstanding.

Consulting agreement

In connection with the Anheuser-Busch merger, we and Mr. Busch IV entered into a consulting agreement which became effective as of the closing of the Anheuser-Busch merger and will continue until 31 December 2014, substantially on the terms described below. In his role as consultant, Mr. Busch IV will, at the request of our Chief Executive Officer, provide advice to us on Anheuser-Busch new products and new business opportunities; review Anheuser-Busch marketing programmes; meet with retailers, wholesalers and key advertisers of Anheuser-Busch; attend North American media events; provide advice with respect to Anheuser-Busch’s relationship with charitable organisations and the communities in which it operates; and provide advice on the taste, profile and characteristics of the Anheuser-Busch malt-beverage products.

Under the terms of the consulting agreement, as contemplated, at the time of the Anheuser-Busch acquisition, Mr. Busch IV received a lump sum cash payment equal to USD 10,350,000, less any applicable withholding. During the term of the consulting agreement, Mr. Busch IV will be paid a fee of approximately USD 120,000 per month. In addition, Mr. Busch IV will be provided with an appropriate office in St. Louis, Missouri, administrative support and certain employee benefits that are materially similar to those provided to full-time salaried employees of Anheuser-Busch. He is also to be provided with personal security services through 31 December 2011 (in St. Louis, Missouri) in accordance with Anheuser-Busch’s past practices including an income tax gross-up and with complimentary tickets to Anheuser-Busch sponsored events. Mr. Busch IV is also eligible for a gross-up payment under Section 280G of the U.S. Internal Revenue Code of 1986, as amended, (estimated to be approximately USD 11.1 million) on various change in control payments and benefits to which he is entitled to in connection with the Anheuser-Busch merger. Such Code Section 280G gross-up payments are payments which, after the imposition of certain taxes, will equal the excise tax imposed on such change of control payments and benefits to which Mr. Busch IV is entitled.

Mr. Busch IV is subject to restrictive covenants relating to non-competition and non-solicitation of employees and customers which are in effect for the duration of the consulting agreement and a confidentiality covenant. The parties are subject to a mutual non-disparagement covenant.

If terminated by reason of a notice given by Mr. Busch IV, he would no longer be entitled to any rights, payments or benefits under the consulting agreement (with the exception of accrued but unpaid consulting fees, business expense reimbursements, any Code Section 280G gross-up payment, indemnification by us, and

 

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continued office and administrative support for 90 days following termination of the agreement) and the non-compete and non-solicitation restrictive covenants would survive for two years following termination of the consulting agreement (but not beyond 31 December 2013). If terminated by reason of a notice given by us for any reason other than for “cause”, Mr. Busch IV would continue to have all rights (including the right to payments and benefits) provided for in the consulting agreement and will continue to be bound by the non-compete and non-solicitation restrictive covenants through 31 December 2013.

Mr. Busch IV will generally be indemnified by us from and against all claims arising from the performance of his duties as a consultant for the term of the consulting agreement. In addition, we and Mr. Busch IV have executed a mutual release of claims regarding all pre-closing matters.

Jointly Controlled Entities

We report our interests in jointly controlled entities using the line-by-line reporting format for proportionate consolidation. Significant interests we hold in joint ventures include two distribution entities in Canada and three entities in Brazil. None of these joint ventures are material to us. Aggregate amounts of our interests in such entities are as follows:

 

     30 June
2009
   31 December  
      2008    2007    2006  
     (USD million)  

Non-current assets

   72    68    88    71   

Current assets

   32    31    29    29   

Non-current liabilities

   91    85    103    82   

Current liabilities

   26    28    29    32   

Result from operations

   5    12    5    5   

Profit attributable to equity holders

   1    3    -    (1

Transactions with Associates

Our transactions with associates were as follows:

 

     30 June
2009
   Year ended 31 December
      2008    2007    2006
     (USD million)

Revenue

   28    12    12    13

Non-current assets

   16    31    -    -

Current assets

   13    14    52    7

Current liabilities

   17    14    12    8

Revenue from associates primarily consists of sales to distributors in which we have a non-controlling interest.

Indemnification Agreement

In the context of the U.S. Department of Justice’s antitrust review of the Anheuser-Busch acquisition, we entered into an indemnification agreement with AmBev on 13 November 2008, pursuant to which we agreed to indemnify AmBev under certain circumstances arising from the perpetual license of Labatt branded beer to KPS Capital Partners, LP for consumption in the U.S. and the interim supply of Labatt branded beer to KPS Capital Partners, LP for consumption in the U.S.

 

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DESCRIPTION OF THE ISSUER, THE PARENT GUARANTOR

AND THE SUBSIDIARY GUARANTORS

THE ISSUER

The Issuer, under the name of InBev Worldwide S.à.r.l., was incorporated on 9 July 2008 as a private limited liability company ( société à responsabilité limitée ) under the Luxembourg Companies Act. On 19 November 2008, the Issuer was domesticated as a corporation in the State of Delaware in accordance with Section 388 of the Delaware General Corporation Law and, in connection with such domestication, changed its name to Anheuser-Busch InBev Worldwide Inc. The Issuer’s registered office is located at 1209 Orange Street, Wilmington, Delaware 19801.

Business Overview

Principal Activities

The Issuer acts as a financing vehicle of the AB InBev Group and the holding company of Anheuser-Busch.

Principal Markets

The Issuer does not intend to apply to list the New Notes on any securities exchange.

The Issuer is part of the AB InBev Group. For a description of the organisational structure of the AB InBev Group, please refer to “Business Description—Organisational Structure”.

Board of Directors

The business and affairs of the Issuer are managed by or under the direction of its Board of Directors. The number of directors that comprise the Issuer’s Board of Directors will be determined only by the Issuer’s Board of Directors. The Issuer’s Board of Directors currently consists of the following three directors, who also hold the offices parenthetically indicated after his or her name: David A. Peacock (President and Chief Executive Officer), Luiz F. Edmond and Gary L. Rutledge (Vice President, General Counsel and Secretary). Any action required or permitted to be taken at any meeting of the Issuer’s Board of Directors, or of any committee thereof, may be taken without a meeting if the number of directors that would be necessary to authorize or take such action at a meeting of the Issuer’s Board of Directors or of such committee, as the case may be, consent thereto in writing.

Sole Shareholder

InBev Services B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) (incorporated under the laws of The Netherlands, having its registered office at Ceresstraat 1, 4811 CA Breda, The Netherlands, and its corporate seat ( statutaire zetel ) in Breda, The Netherlands, and registered with the Chamber of Commerce for Zuidwest-Nederland under the number 20142556) holds 3,000 shares in the Issuer, which represent 100% of the share capital of the Issuer.

Share Capital

The Issuer’s issued share capital at the date of this Form F-4 is USD 3,000 represented by 3,000 shares of common stock, par value USD 1.00 per share. The Issuer has no other classes of shares. The share capital is fully paid up in cash. The Issuer has no notes cum warrants, nor convertible notes outstanding.

 

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The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and do not have cumulative voting rights. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. In all other matters, the affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders.

Certificate of Incorporation and By-Laws

Pursuant to its certificate of incorporation, Anheuser-Busch InBev Worldwide Inc. was formed for the purpose of engaging in any lawful act or activities for which corporations may be organized under the State of Delaware. A summary of the Issuer’s certificate of incorporation and by-laws is as follows:

Meetings of Stockholders; Action by Written Consent

An annual meeting of stockholders shall be held for the election of directors at such date, time and place as may be designated by the Issuer’s Board of Directors. Any other proper business may be transacted at the annual meeting. Special meetings of stockholders may be called at any time by the Chairman of the Board, if any, the Vice Chairman of the Board, if any, the President or the Board itself. Any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing is obtained by the holders of stock having not less than the minimum number of votes that would be necessary to authorize such action at a meeting.

Amendments

The by-laws may be amended or repealed, and new by-laws adopted, by the Issuer’s Board of Directors, but the stockholders entitled to vote may adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them.

Other Information

The first accounting year of the Issuer started on 9 July 2008 (the date of the Issuer’s incorporation) and ended on 31 December 2008.

The Issuer acquired Anheuser-Busch Companies, Inc. on 18 November 2008.

PARENT GUARANTOR

We are a public limited liability incorporated in the form of a société anonyme/naamloze vennootschap under Belgian law (register of legal entities number 0417.497.106). Our registered office is located at Grand-Place/Grote Markt 1, 1000 Brussels, Belgium, and our headquarters are located at Brouwerijplein 1, 3000 Leuven, Belgium. We were incorporated on 2 August 1977 and our financial year runs from 1 January to 31 December.

Corporate Purpose

According to Article 4 of our articles of association, our corporate purpose is:

 

   

To produce and deal in all kinds of beers, drinks, foodstuffs and ancillary products, fabricate, process and deal in all by-products and accessories, of whatsoever origin or form, of its industry and trade, and to design, construct or produce part or all of the facilities for the manufacture of the aforementioned products;

 

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To purchase, construct, convert, sell, let, sublet, lease, license and exploit in any form whatsoever all real property and real property rights and all businesses, goodwill, movable property and movable property rights connected with our business;

 

   

To acquire and manage investments shares and interests in companies or undertakings having objects similar or related to, or likely to promote the attainment of, any of the foregoing objects, and in financing companies; to finance such companies or undertakings by means of loans, guarantees or in any other manner whatsoever; to take part in the management of the aforesaid companies through membership of our Board or the like governing body;

 

   

To carry out all administrative, technical, commercial and financial work and studies for the account of undertakings in which it holds an interest or on behalf of third parties.

We may, within the limits of our corporate purpose, engage in all civil, commercial, financial and industrial operations and transactions connected with our corporate purpose either within or outside Belgium. We may take interests by way of asset contribution, merger, subscription, equity investment, financial support or otherwise in all companies, undertakings or associations having a corporate purpose similar or related to or likely to promote the furtherance of our corporate purpose.

Board of Directors

Belgian law does not regulate specifically the ability of directors to borrow money from Anheuser-Busch InBev SA/NV.

Our Corporate Governance Charter prohibits us from making loans to directors, whether for the purpose of exercising options or for any other purpose (except for routine advances for business-related expenses in accordance with our rules for reimbursement of expenses). See “Major Shareholders and Related Party Transactions—Related Party Transactions—Material Transactions—Transactions with Directors and Executive Board of Management Members (Key Management Personnel)—Loans to directors”.

Article 523 of the Belgian Companies Code provides that if one of our directors directly or indirectly has a personal financial interest that conflicts with a decision or transaction that falls within the powers of our Board, the director concerned must inform our other directors before our Board makes any decision on such transaction. The statutory auditor must also be notified. The director may not participate in the deliberation nor vote on the conflicting decision or transaction. An excerpt from the minutes of the meeting of our Board that sets forth the financial impact of the matter on us and justifies the decision of our Board must be published in our annual report. The statutory auditors’ report to the annual accounts must contain a description of the financial impact on us of each of the decisions of our Board where director conflicts arise.

We are relying on a provision in the New York Stock Exchange Listed Company Manual that allows us to follow Belgian corporate law and the Belgian Corporate Governance Code with regard to certain aspects of corporate governance. This allows us to continue following certain corporate governance practices that differ in significant respects, from the corporate governance requirements applicable to U.S. companies listed on the New York Stock Exchange. In particular, the New York Stock Exchange rules require a majority of the directors of a listed U.S. company to be independent, while in Belgium, only three directors need be independent. Our board currently comprises four independent directors and nine non-independent directors. See “Directors, Senior Management and Employees—Directors and Senior Management—Board of Directors”. The New York Stock Exchange rules further require that each of the nominating, compensation and audit committees of a listed U.S. company be comprised entirely of independent directors. However, the Belgian Corporate Governance Code recommends only that a majority of the directors on each of these committees meet the technical requirements for independence under Belgian corporate law. Our board has stated its intention that each member of our Audit Committee shall be an independent director as required under the New York Stock Exchange rules and Rule

 

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10A-3 of the Securities Exchange Act of 1934 within a year of the effective date of this Form F-4. Our board has no plans to change the composition of our Compensation and Nominating Committee; although we note that this committee is composed exclusively of non-executive directors who are independent of management and whom we consider to be free of any business or other relationship which could materially interfere with the exercise of their independent judgment. See “Directors, Senior Management and Employees—Board Practices—Information about Our Committees”.

For further information regarding the provisions of our articles of association as applied to our Board, see “Directors, Senior Management and Employees—Directors and Senior Management—Board of Directors” and “Directors, Senior Management and Employees—Board Practices”.

Share Capital

Our shares are represented by registered shares, bearer shares and dematerialised shares without nominal value. As of 30 June 2009, our issued and paid-up share capital amounted to EUR 1,234,761,478.79, which was represented by 1,603,243,227 of our shares without nominal value, each share representing 1/1,603,243,227th of the share capital. As of 22 October 2009, our issued and paid-up share capital amounted to EUR 1,234,843,020.25, which was represented by 1,603,352,125 of our shares without nominal value, each share representing 1/1,603,352,125 of the share capital.

In addition to the shares already outstanding, we have granted warrants which can upon exercise lead to an increase in the number of our outstanding shares. The total number of outstanding warrants (where each warrant entitles the holder to subscribe to one new share) was 5.42 million as at 30 June 2009 and 5.33 million as of 22 October 2009. For further details of outstanding warrants, see “Directors, Senior Management and Employees—Compensation—Share-Based Payment Plans—Long-Term Incentive Plan or LTI”.

The total number of outstanding options on our existing shares (where each option entitles the holder to purchase from us one existing share) was 43.58 million as at 30 June 2009 and 42.4 million as at 22 October 2009. As these options relate to existing shares, they do not have an impact on the total number of our shares outstanding. See “Directors, Senior Management and Employees—Compensation—Share-Based Payment Plans—Share-Based Compensation Plan”.

The changes in our share capital since 1 January 2006 are described below.

 

Date

   Increase
(euro)
   Capital
(euro)
   Shares   

Reason

1 January 2006

      469,895,116.53    609,913,289   

3 February 2006

   8,056.51    469,903,173.04    609,923,752    Exercise of warrants

21 March 2006

   45,861.20    469,949,034.24    609,983,312    Exercise of warrants

25 April 2006

   86,733.57    470,035,767.81    610,095,953    Exercise of warrants

19 May 2006

   63,140.00    470,098,907.81    610,177,953    Exercise of warrants

21 June 2006

   835,655.59    470,934,563.40    611,263,220    Exercise of warrants

3 August 2006

   65,788.80    471,000,352.20    611,348,660    Exercise of warrants

29 September 2006

   301,065.38    471,301,417.58    611,739,654    Exercise of warrants

24 October 2006

   36,467.20    471,337,884.78    611,787,014    Exercise of warrants

20 December 2006

   1,273,785.59    472,611,670.37    613,441,281    Exercise of warrants

5 February 2007

   53,249.35    472,664,919.72    613,510,436    Exercise of warrants

20 March 2007

   39,624.97    472,704,544.69    613,561,897    Exercise of warrants

24 April 2007

   436.59    472,704,981.28    613,562,464    Exercise of warrants

19 June 2007

   704,869.55    473,409,850.83    614,477,879    Exercise of warrants

27 July 2007

   232,074.15    473,641,924.98    614,779,274    Exercise of warrants

21 September 2007

   8,136.59    473,650,061.57    614,789,841    Exercise of warrants

 

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Date

   Increase
(euro)
   Capital
(euro)
   Shares   

Reason

14 December 2007

   195,324.36    473,845,385.93    615,043,509    Exercise of warrants

11 February 2008

   173,720.47    474,019,106.40    615,269,120    Exercise of warrants

1 April 2008

   251,260.24    474,270,366.64    615,595,432    Exercise of warrants

13 June 2008

   320,514.04    474,590,880.68    616,011,684    Exercise of warrants

8 September 2008

   27,468.98    474,618,349.66    616,047,358    Exercise of warrants

3 October 2008

   208,623.03    474,826,972.69    616,318,297    Exercise of warrants

16 December 2008

   759,304,139.44    1,234,131,112.13    1,602,427,569    Rights offering

23 January 2009

   240,524.90    1,234,371,637.03    1,602,739,939    Exercise of warrants

20 March 2009

   79,817.43    1,234,451,454.46    1,602,843,598    Exercise of warrants

28 April 2009

   14,179.55    1,234,465,634.01    1,602,862,013    Exercise of warrants

16 June 2009

   295,844.78    1,234,761,478.79    1,603,243,227    Exercise of warrants

7 September 2009

   22,627.99    1,234,784,106.78    1,603,275,614    Exercise of warrants

22 October 2009

   58,913.47    1,234,843,020.25    1,603,352,125    Exercise of warrants

The table below shows the statement of share capital for 2008. All of these shares issuances above were for cash consideration. See also note 23 “Changes in equity” to our historical financial statements.

 

Issued capital

   Million USD    Million shares

As of 31 December 2007

   559    615

Changes during 2008

   1,171    987

As of 31 December 2008

   1,730    1,602

For details of our authorised share capital, see “—Changes to Our Share Capital”.

As of 30 June 2009, we held 11,114,722 of our own shares, and Brandbrew S.A., our fully owned subsidiary, held 8,747,485 of our shares, with a face value on 30 June 2009 of EUR 511.25 million (USD 361.72 million). As of 24 November 2009, we held 15,801,090 of our own shares and Brandbrew S.A., our fully owned subsidiary, held 450,907 of our shares, with a face value on 24 November 2009 of USD 834.05 million. See “Major Shareholders and Related Party Transactions—Major Shareholders—Shareholding Structure”.

For details of the options and warrants held by our employees, see “Directors, Senior Management and Employees—Compensation—Share-Based Payment Plans”.

Form and Transferability of Our Shares

Our shares can take the form of registered shares, bearer shares or dematerialised shares.

On 1 January 2008, bearer shares booked into a securities account were automatically converted into dematerialised shares. As from 1 January 2008 bearer shares not yet booked into a securities account have been automatically converted into dematerialised shares as from the time they are booked into a securities account.

Furthermore, holders of bearer shares that would not have been subject to this automatic conversion (that is, bearer shares not held in book-entry form) must request, in accordance with the modalities provided by the Belgian Law of 14 December 2005 concerning the suppression of bearer securities, at the latest by 31 December 2013, that such shares be converted into registered or dematerialised shares.

In the event that the conversion of the shares is not requested by the above date, the shares will be automatically converted into dematerialised shares and recorded in our name, with all rights attached to such shares being suspended until their proved owner comes forward and requests that such shares be recorded in his

 

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own name. In addition, the Belgian Law of 14 December 2005 provides that, as of 1 January 2015, securities listed on a stock exchange and whose owner remains unknown must be sold by us on a stock exchange in accordance with the modalities provided by such law. We must then deposit (i) the proceeds or (ii) if the securities are not sold before 30 November 2015 at latest, these non-sold securities, with the Belgian Caisse des dépôts et consignations/Deposito-en Consignatiekas, where such proceeds or securities respectively may be claimed by their beneficiaries, subject to certain administrative fines being payable by claimants.

All of our shares are fully paid-up and freely transferable.

Changes to Our Share Capital

In principle, changes to our share capital are decided by our shareholders. Our shareholders’ meeting may at any time decide to increase or decrease our share capital. Such resolution must satisfy the quorum and majority requirements that apply to an amendment of the articles of association, as described below in “—Description of the Rights and Benefits Attached to Our Shares—Right to Attend and Vote at Our Shareholders’ Meeting—Votes, quorum and majority requirements”.

Share Capital Increases by Our Board of Directors

Subject to the same quorum and majority requirements, our shareholders’ meeting may authorise our Board, within certain limits, to increase our share capital without any further approval of our shareholders. This is the so-called authorised capital. This authorisation needs to be limited in time (that is, it can only be granted for a renewable period of maximum five years) and in scope (that is, the authorised capital may not exceed the amount of the registered share capital at the time of the authorisation).

At our extraordinary shareholders’ meeting held on 28 April 2009, our shareholders authorised our Board, for a period of five years from the date of publication of the changes to the articles of association decided by our shareholders’ meeting on 28 April 2009, to increase our share capital, in one or more transactions, by a number of shares representing no more than 3% of the total number of shares issued and outstanding on 28 April 2009 (that is, 1,602,862,013). In accordance with Article 603, indent 1, of the Belgian Companies Code, such increase may not result in the share capital being increased by an amount exceeding the amount of share capital on such date. As at the date of this Form F-4, the authorised capital had not been used.

In addition, our Board is expressly authorised, in the event of a public takeover bid being made in relation to our securities, to increase our share capital, within the limits mentioned above, under the conditions set out in Article 607 of the Belgian Companies Code. This authorisation is granted for a period of 3 years from 24 April 2007. If our Board decides to increase our share capital pursuant to this authorisation, the amount of this increase will be deducted from the remaining authorised capital.

Preference Rights

In the event of a share capital increase for cash by way of the issue of new shares, or in the event of an issue of convertible bonds or warrants, our existing shareholders have a preferential right to subscribe, pro rata, to the new shares, convertible bonds or warrants. Our Board may decide that preference rights which were not exercised, or were only partly exercised, by any shareholders shall accrue proportionally to the other shareholders who have already exercised their preference rights, and shall fix the practical terms for such subscription.

Our shareholders’ meeting, acting in accordance with Article 596 of the Belgian Companies Code and in our interests, may restrict or cancel the preference rights. In the case of a share capital increase pursuant to the authorised capital, our Board may likewise restrict or cancel the preference rights, including in favour of one or more specific persons other than our employees or one of our subsidiaries.

 

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Purchases and Sales of Our Own Shares

We may only acquire our own shares pursuant to a decision by our shareholders’ meeting taken under the conditions of quorum and majority provided for in the Belgian Companies Code. Such a decision requires a quorum of shareholders holding an aggregate of at least 50% of the share capital and approval by a qualified majority of at least 80% of the share capital present or represented. If there is no quorum, a second meeting must be convened. At the second meeting, no quorum is required, but the relevant resolution must be approved by a qualified majority of at least 80% of the share capital present or represented.

Our shareholders’ meeting of 28 April 2009 delegated authority to our Board, for a period of 5 years from such a date, to acquire our shares up to the maximum number allowed under Article 620, §1, 2° of the Belgian Companies Code and for a consideration that may not be less than 10% below the lowest closing price in the last 20 stock exchange days preceding the transaction and not more than 10% above the highest closing price in the last 20 stock exchange days preceding the transaction. If the acquisition is made by us outside the stock exchange, even from a subsidiary, we shall, as the case may be, make an offer on the same terms and conditions to all of our shareholders.

On 21 January 2008, we announced that our Board had resolved to initiate a new share buy-back programme for an amount of up to USD 444 million. The share buy-back was executed pursuant to the powers granted at our extraordinary shareholders’ meeting of 24 April 2007, and, in accordance with that mandate, was to be conducted within eight months of the date of the resolution. Our share buy-back programmes are an integral component of our strategy to pro-actively manage our capital structure and return cash to shareholders, as well as to our hedge share-based compensation system. This programme was concluded with a total amount of USD 306 million worth of our shares purchased.

On 28 February 2008, we initiated a further buy-back programme of shares for an amount of up to USD 739 million, for a period of 12 months. This programme was completed at the end of May 2008. A total of 12,708,793 shares were purchased in 2008. Of this number, 12,703,440 shares were purchased on the Euronext stock exchange and the remaining 5,353 shares were purchased over the counter by Brandbrew S.A.

On 12 November 2009 immediately after the closure of Euronext Brussels, we purchased 8,300,000 of our shares over the counter from our fully owned subsidiary Brandbrew SA. The purchase price was equal to the closing price of the shares on Euronext Brussels on 12 November 2009, which was EUR 32.59 per share.

Neither we, nor any purchaser affiliated to us have purchased any of our shares since 12 November 2009.

Memorandum and Articles of Association and Other Share Information

A copy of our articles of association dated 22 October 2009 has been filed as Exhibit 3.1 to this Form F-4.

Description of the Rights and Benefits Attached To Our Shares

Right to Attend and Vote at Our Shareholders’ Meeting

Annual Shareholders’ Meeting

Our annual shareholders’ meeting shall be held on the last Tuesday of April of each year, at 11:00 a.m., or at any other time, in one of the municipalities (communes/gemeenten) of the Region of Brussels, in Leuven or in Liège, at the place mentioned in the notice. If this date is a legal holiday, the meeting is held on the next business day (excluding Saturday) at the same time.

 

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Special and Extraordinary Shareholders’ Meetings

Our Board or the statutory auditor (or the liquidators, if appropriate) may, whenever our interests so require, convene a special or extraordinary shareholders’ meeting. Such shareholders’ meeting must also be convened every time one or more of our shareholders holding at least one-fifth of our share capital so demand.

Notices convening our shareholders’ meeting

Notices of our shareholders’ meetings contain the agenda of the meeting and our Board’s recommendations on the matters to be voted upon.

Notices for our shareholders’ meeting are given in the form of announcements placed at least 24 days prior to the meeting in at least one Belgian newspaper and in the Belgian State Gazette (Moniteur belge/Belgisch Staatsblad).

Notices are sent 15 days prior to the date of our shareholders’ meeting to the holders of our registered shares, holders of our registered warrants and to our directors and our statutory auditor.

Notices of all our shareholders’ meetings and all related documents, such as specific Board and auditor’s reports, are also published on our website, www.ab-inbev.com/corporategovernance.

Admission to meetings

All holders of our shares are entitled to attend our shareholders’ meeting, take part in the deliberations and, within the limits prescribed by the Belgian Companies Code, to vote.

Holders of our physical bearer shares wishing to attend our shareholders’ meeting must first convert such shares into registered or dematerialised shares. They must then comply with the formalities described below (depending on whether they have elected to convert their physical bearer shares into dematerialised or registered shares).

Holders of our dematerialised shares must deposit, with a branch of Fortis Bank in Belgium at least three business days prior to the meeting, a certificate of non-transferability until and including the day of our shareholders’ meeting issued by an authorised account holder or by the clearing organisation approved in accordance with Article 468 of the Belgian Companies Code, with an indication of the number of shares so blocked.

Holders of our registered shares must express, no later than three business days prior to the meeting, their intention to attend the meeting and the number of shares in respect of which they intend to exercise voting rights.

Any shareholder may attend our shareholders’ meetings in person or be represented by a proxy, who need not be a shareholder. All proxies must be in writing in accordance with the form prescribed by us and must be received by us no later than the date determined by our Board.

Votes, quorum and majority requirements

Each of our shares is entitled to one vote except for shares owned by us, or by any of our direct subsidiaries, the voting rights of which are suspended. The shares held by our principal shareholders do not entitle such shareholders to different voting rights.

Shareholders are allowed to vote in person, by proxy or by mail. Votes by mail must be cast using the form prepared by us and must be received by us no later than the date upon which our shareholders must deposit their shares.

 

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Generally, there is no quorum requirement for our shareholders’ meetings and decisions are taken by a simple majority vote of shares present or represented.

Resolutions relating to amendments of the articles of association or the merger or division of Anheuser-Busch InBev SA/NV are subject to special quorum and majority requirements. Specifically, any resolution on these matters requires the presence in person or by proxy of shareholders holding an aggregate of at least 50% of the issued share capital, and the approval of at least 75% of the share capital present or represented at the meeting. If a quorum is not present, a second meeting must be convened. At the second meeting, the quorum requirement does not apply. However, the special majority requirement continues to apply.

Any modification of our corporate purpose or legal form requires a quorum of shareholders holding an aggregate of at least 50% of the share capital and approval by a qualified majority of at least 80% of the share capital present or represented. If there is no quorum, a second meeting must be convened. At the second meeting, no quorum is required, but the relevant resolution must be approved by a qualified majority of at least 80% of the share capital present or represented.

Our extraordinary shareholders’ meeting of 25 April 2006 approved an amendment to our articles of association. As a consequence, the following matters are now within the exclusive jurisdiction of our shareholders’ meetings and shall be adopted by the approval of at least 75% of the shares attending or represented at the meeting, regardless of the number of shares attending or represented:

 

   

Any decision to apply for the delisting of our securities from any stock market;

 

   

Any acquisition or disposal of assets by us for an amount exceeding one third of our consolidated total assets as reported in our most recent audited financial statements.

As a result of the amendment approved by our extraordinary shareholders’ meeting of 25 April 2006, the following matters are also within the jurisdiction of our shareholders’ meeting and shall be adopted with a positive vote of 75% of the shares attending or represented at the meeting, regardless of the number of shares attending or represented, if and only if any four of our directors request that the matter be submitted to our shareholders’ meeting:

 

   

Any matter relating to our dividend payout policy (except that the actual amount of any dividend remains subject to approval by our shareholders’ meeting in accordance with the Belgian Companies Code).

The following matters shall be within the jurisdiction of our shareholders’ meeting and shall be adopted with a positive vote of 50% plus one of the shares attending or represented at the meeting, regardless of the number of shares attending or represented, if and only if any four of our directors request that the matter be submitted to our shareholders’ meeting:

 

   

The approval of the individual to whom our Board proposes to delegate authority for our day-to-day management and appoint as Chief Executive Officer, and the ratification of any decision by our Board to dismiss such individual;

 

   

Any modification of executive remuneration and incentive compensation policy;

 

   

The ratification of any transaction of ours or one of our direct or indirect subsidiaries with a controlling shareholder of us or with a legal or natural person affiliated to or associated with such controlling shareholder within the meaning of Articles 11 and 12 of the Belgian Companies Code, it being understood that, for the purposes of this provision of the articles of association, our direct or indirect subsidiaries are not considered as affiliated to or associated with our controlling shareholders;

 

   

Any modification of our target capital structure and the maximum level of net debt.

 

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Dividends

The Belgian Companies Code provides that dividends can only be paid up to an amount equal to the excess of our shareholders’ equity over the sum of (i) paid up or called up share capital and (ii) reserves not available for distribution pursuant to law or the articles of association.

The annual dividends are approved by our shareholders’ meetings and are paid on the dates and at the places determined by our Board. Our Board may pay an interim dividend in accordance with the provisions of the Belgian Companies Code.

Our current dividend policy is to declare a dividend representing in aggregate at least 25% of our consolidated profit attributable to our equity holders, excluding exceptional items, such as restructuring charges, gains or losses on business disposals and impairment charges, subject to applicable legal provisions relating to distributable profit. In accordance with our intention to deleverage after the closing of the Anheuser-Busch acquisition, it is expected that the dividends we will pay in the first two to three years after the closing of the Anheuser-Busch acquisition will be materially lower than the EUR 2.44 (USD 3.67) dividend for 2007 set out below, and may be lower than the 25% threshold referred to above.

Any matter relating to our dividend payout policy (except that the actual amount of any dividend remains subject to approval at our shareholders’ meeting in accordance with the Belgian Companies Code) is within the jurisdiction of our shareholders’ meetings and shall be adopted with a positive vote of at least 75% of the shares attending or represented at the meeting, regardless of the number of shares attending or represented, if and only if any four of our directors request that the matter be submitted at our shareholders’ meeting.

The annual dividends are approved by our annual shareholders’ meeting and are paid on the dates and at the places appointed by our Board. Our Board may pay an interim dividend in accordance with the provisions of the Belgian Companies Code.

The table below summarises the dividends paid by us in the most recent financial years.

 

Financial year

   Number of our shares
outstanding at end of
relevant financial year
   Gross amount
of dividend per
Share

(in EUR)
   Gross amount of
dividend per
Share

(in USD)
   Payment date

2008

   1,602,427,569    0.28    0.35    5 May 2009

2007

   615,043,509    2.44    3.67    30 April 2008

2006

   613,441,281    0.72    0.95    25 April 2007

2005

   609,913,289    0.48    0.57    26 April 2006

Appointment of Directors

Pursuant to a shareholders’ agreement (see “Major Shareholders and Related Party Transactions—Major Shareholders”) BRC S.à.R.L and Eugénie Patri Sébastien S.A. each have the right to nominate four directors. The Stichting board of directors nominates four to six directors who are independent of shareholders.

Liquidation Rights

We can only be dissolved by a shareholders’ resolution passed with a majority of at least 75% of the votes cast at an extraordinary shareholders’ meeting where at least 50% of the share capital is present or represented.

In the event of the dissolution and liquidation of Anheuser-Busch InBev SA/NV, the assets remaining after payment of all debts and liquidation expenses shall be distributed to the holders of our shares, each receiving a sum proportional to the number of our shares held by them.

 

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Disclosure of Significant Shareholdings

In addition to any shareholder notification thresholds under applicable legislation (which notification is required at 5%, 10%, 15% and so on in five-percentage point increments), our articles of association require holders of our shares to disclose the number of our shares held if their shareholding exceeds or falls below 3% of our outstanding shares with voting rights.

Mandatory Bid

Belgium implemented the Thirteenth Company Law Directive (European Directive 2004/25/EC of 21 April 2004) by the Belgian Law of 1 April 2007 on public takeover bids (the “Takeover Law”) and the Belgian Royal Decree of 27 April 2007 on public takeover bids (the “Takeover Royal Decree”). Pursuant to the Takeover Law, a mandatory bid will need to be launched on all our shares (and our other securities giving access to voting rights) if a person, as a result of its own acquisition or the acquisition by persons acting in concert with it or by persons acting for their account, directly or indirectly holds more than 30% of our shares (directly and/or through American depositary shares).

Public takeover bids on shares and other securities giving access to voting rights (such as, warrants or any convertible bonds) are subject to supervision by the CBFA. Public takeover bids must be made for all of our shares, as well as for all our other securities giving access to voting rights. Prior to making a bid, a bidder must publish a prospectus, approved by the CBFA prior to publication.

In accordance with Article 74 of the Takeover Law, our controlling shareholder (the Stichting) and the six entities acting in concert with it (as set out in “Major Shareholders and Related Party Transactions—Major Shareholders—Shareholding Structure”) have filed with us and the CBFA the disclosures set forth by the Takeover Law and are therefore, and following their acquisition of additional shares pursuant to our December 2008 rights offering have remained, exempt from the obligation to launch a takeover bid on our shares and other securities giving access to voting rights.

SUBSIDIARY GUARANTORS

AmBrew S.A.

AmBrew S.A. (“ AmBrew ”) is a holding company that holds an important portion of the Parent Guarantor’s stake in AmBev. AmBrew was incorporated on 2 March 2004 as a “ société anonyme ” under the Luxembourg Companies Act. AmBrew was incorporated under the denomination of Tinsel Investments S.A. The statutes were published in the Memorial C n° 449 on 28 April 2004. On 22 December 2004, AmBrew changed its denomination to AmBrew S.A. Its registered office is located at 5, Parc d’Activité Syrdall, L-5365 Münsbach in Luxembourg.

The statutes were last amended on 26 August 2004, 22 December 2004, 15 December 2006, 25 December 2006, 17 December 2007 and 18 November 2008. AmBrew is established for an unlimited period. AmBrew is registered with the “Registre de Commerce” et des Sociétés under the number B 99525.

The business objectives of AmBrew are to undertake, in Luxembourg and abroad, financing operations by granting loans to corporations, part of the same international group to which it belongs. These loans will be refinanced by financial means and instruments such as, inter alia but not limited to, loans from shareholders or group companies or bank loans.

AmBrew will be able to employ its funds for the start up, the management, the development and the liquidation of a portfolio being composed of all titles and trademarks of any origin, to take part in the start up, the development and the control of any company, to acquire by way of contribution, subscription or in any other

 

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manner, all types of property titles and trademarks and to subsequently realize these by way of sale, transfer, exchange or any other manner as well as to grant to the companies in which AmBrew is interested, loans, advances or guarantees.

Furthermore, AmBrew may carry out all transactions pertaining directly or indirectly to acquiring participating interests in any enterprises in whatever form, as well as performing the administration, the management, the control and the development of such participating interests.

The business address for all directors is 5, Parc d’Activité Syrdall, L-5365 Münsbach, Luxembourg.

No conflicts of interests exist between any duties to AmBrew of its directors and their private interests.

Under Luxembourg company law, there is currently no legal corporate governance regime (other than ordinary corporate governance) that AmBrew must comply with.

AmBrew’s issued share capital at the date of this Form F-4 is €148,640,320 represented by 4,645,010 ordinary shares of common stock par value €32 per share. AmBrew has no other classes of shares. The share capital is fully paid up in cash. AmBrew has no notes cum warrants, nor convertible notes outstanding.

AmBrew is a 100% owned indirect subsidiary of Anheuser-Busch InBev SA/NV.

The accounting year begins on 1 January and ends on 31 December of each year.

In accordance with article 316 of the Luxembourg Companies Act, AmBrew is exempted from the requirement to prepare consolidated accounts and a consolidated management report.

The results of AmBrew S.A. are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

Cobrew NV/SA

Cobrew NV/SA (“ Cobrew ”) is a finance vehicle for the Parent Guarantor. Cobrew was incorporated on 21 May 1986 as a public limited liability company (“ société anonyme ”/“ naamloze vennootschap ”) under Belgian law. The articles of association were published in the Annex of the Belgian State Gazette under number 86061755/56 on 17 June 1986. Its registered office is located at Brouwerijplein 1, 3000 Leuven in Belgium.

The articles of association were amended on 9 April 1987, on 29 September 1988, on 20 September 1990, on 31 December 1990, on 28 February 1991, on 25 September 1991, on 27 March 1995, on 29 June 1995, on 5 November 1997, on 10 August 1998, on 26 October 1998, on 28 February 2000, on 13 September 2000, on 5 December 2000, on 12 January 2001, on 31 May 2001, on 5 February 2002, on 15 December 2004, on 19 May 2006 and on 13 June 2006.

Cobrew is established for an unlimited period. Cobrew is registered with the Register for Legal Entities under number 0428.975.372.

The business activities of Cobrew are publicity, providing and collecting of information, insurance and reinsurance, scientific research, relations with national and international authorities, centralisation of bookkeeping, administration, information technology and general services, centralisation of financial transactions and covering of risks resulting from fluctuations in exchange rates, financial management, invoicing, re-invoicing and factoring, finance lease of movable and immovable property, market studies, management and legal studies, fiscal advice, audits as well as all activities of a preparatory or auxiliary nature for the companies of

 

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the group. Within the framework of its objects, Cobrew can acquire, manufacture, hire and let out all movable and immovable goods and, in general, perform all civil, commercial, industrial and financial transactions, including the operation of all intellectual rights and all industrial and commercial properties relating to them.

The business address for all directors is Brouwerijplein 1, 3000 Leuven, Belgium.

No conflicts of interests exist between any duties to Cobrew of its directors and their private interests.

Under Belgian company law, there is currently no legal corporate governance regime that Cobrew must comply with.

Cobrew’s issued share capital at the date of this Form F-4 is €3,399,912,340.70 represented by 1,371,489 ordinary shares of common stock without par value per share. Cobrew has no other classes of shares. The share capital is fully paid up in cash. Cobrew has no notes cum warrants, nor convertible notes outstanding.

Cobrew is a 100% owned indirect subsidiary of Anheuser-Busch InBev SA/NV.

The accounting year begins on 1 January and ends on 31 December of each year.

In accordance with Article 113 of the Belgian Companies Code, Cobrew is exempt from the requirement to prepare consolidated accounts and a consolidated management report.

The results of Cobrew are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

InBev Belgium NV/SA

InBev Belgium NV/SA (“ InBev Belgium ”) is a holding company for the Parent Guarantor’s operations in Belgium. InBev Belgium was incorporated on 21 March 1988 as a public limited liability company ( société anonyme / naamlooze vennootschap ) under Belgian law. InBev Belgium was incorporated under the denomination of BelBrew. The statutes were published in the Annex of the Belgian State Gazette under number 880413-192 on 13 April 1988. On 17 March 1989, InBev Belgium changed its denomination to Interbrew Belgium and on 31 August 2005, to InBev Belgium. Its registered office is located at 21, Boulevard Industriel, 1070 Brussels (Anderlecht) in Belgium.

The statutes were amended on 29 April 1988, on 17 March 1989, on 20 March 1991, on 30 June 1993, on 23 September 1994, on 21 September 1995, on 28 June 1999, on 2 September 1999, on 29 December 2000, on 29 June 2001, on 5 February 2004 and on 31 August 2005.

InBev Belgium is established for an unlimited period. InBev Belgium is registered with the Register for Legal Entities under number 0433.666.709.

The business activities of InBev Belgium are manufacturing and marketing of beers and other alcoholic/non-alcoholic goods in Belgium.

No conflicts of interests exist between any duties to InBev Belgium of its directors and their private interests.

Under Belgian company law, there is currently no legal corporate governance regime (other than ordinary corporate governance) that InBev Belgium must comply with.

InBev Belgium’s issued share capital as of the date of this Form F-4 is €293,000,000 represented by 4,717,363 ordinary shares of common stock. InBev Belgium has no other classes of shares. The share capital is fully paid up in cash. InBev Belgium has no notes cum warrants, nor convertible notes outstanding.

 

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InBev Belgium’s voting rights are wholly owned by Anheuser-Busch InBev SA/NV.

The accounting year begins on 1 January and ends on 31 December of each year.

In accordance with Article 113 of the Belgian Companies Code, InBev Belgium is exempted from the requirement to prepare consolidated accounts and a consolidated management report.

The results of InBev Belgium are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

AB InBev France S.A.S.

AB InBev France S.A.S. (“ AB InBev France ”) is a holding company for the Parent Guarantor’s operations in France. AB InBev France was incorporated on 27 March 1981 as a société anonyme under French law and transformed into a société par actions simplifiée on 28 June 2002. Its registered office is located at Immeuble le Crystal Zac Euralille Romarin, 38 Place Vauban, avenue de la République, 59110 La Madeleine, France.

The statutes were last amended on 29 June 2009.

AB InBev France is established until 27 March 2080. AB InBev France is registered under the corporate identity number 321 336 208.

The business activities of AB InBev France are, among others, the exploitation of malt factories, the production and marketing of any type of beer, drinks, food products and financial transactions.

The business address for all directors is Immeuble le Crystal Zac Euralille Romarin, 38 allée Vaubon, avenue de la République, 59110 La Madeleine, France.

No conflicts of interests exist between any duties to AB InBev France of its directors and their private interests.

AB InBev France complies with all legal and regulatory provisions relating to corporate governance currently in force in France.

Pursuant to the decision of the shareholders of AB InBev France on 19 December 2008, AB InBev France’s issued share capital as of the date of this Form F-4 is €15,200,000 represented by 1,520,000 ordinary shares of common stock par value €10 per share. AB InBev France has no other classes of shares. The share capital is fully paid up in cash. AB InBev France has no notes cum warrants, nor convertible notes outstanding.

AB InBev France is an indirect subsidiary of Anheuser-Busch InBev SA/NV.

The accounting year begins on 1 January and ends on 31 December of each year.

In accordance with tax legislation, AB InBev France is exempted from the requirement to prepare consolidated accounts and a consolidated management report.

The results of AB InBev France are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

InBev Nederland N.V.

InBev Nederland N.V. (“ InBev Nederland ”) is a holding company for the Parent Guarantor’s operations in the Netherlands. InBev Nederland was incorporated on 29 April 1930 as a public limited liability

 

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company ( naamloze vennootschap ) under Dutch law. Its registered office is located at Ceresstraat 1, 4811 CA Breda in The Netherlands and its corporate seat is at Breda, The Netherlands.

InBev Nederland’s articles of association were last amended on 2 January 2006.

InBev Nederland is registered with the Dutch Commercial Register ( Kamer van Koophandel voor Zuidwest—Nederland ) under number 20080399.

The business activities of InBev Nederland are, among others, beer brewing, drink production and sale of drinks, more specifically beer, water and soft drinks.

The accounting year begins on 1 January and ends on 31 December of each year.

The business address for all managing directors is Ceresstraat 1, 4811 CA Breda, The Netherlands.

No conflicts of interests exist between any duties to InBev Nederland of its managing directors and their private interests.

Under Dutch company law, InBev Nederland is subject to, and complies with, the large company regime ( structuur vennootschap) . Consequently, InBev Nederland has established a supervisory board.

The business address for all InBev Nederland supervisory board members is Ceresstraat 1, 4811 CA Breda, The Netherlands.

No conflicts of interests exist between any duties to InBev Nederland of the members of its supervisory board and their private interests.

InBev Nederland’s issued share capital as of the date of this Form F-4 is €9,323,684.04 represented by 205,458 ordinary shares of common stock par value €45.38 (rounded following conversion into euro) per share. InBev Nederland has no other classes of shares. The share capital is fully paid up in cash. InBev Nederland has no notes cum warrants, nor convertible notes outstanding.

InBev Nederland is a 100% owned indirect subsidiary of Anheuser-Busch InBev SA/NV.

The results of InBev Nederland are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

Interbrew Central European Holding B.V.

Interbrew Central European Holding B.V. (“ Interbrew Central European Holding ”) is a holding company that formerly held the Parent Guarantor’s operations in Central Europe prior to the sale of such operations on 2 December 2009. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Recent Transactions”. Interbrew Central European Holding was incorporated on 13 March 1985 as a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) under Dutch law. Its registered office is located at Ceresstraat 1, 4811 CA Breda in The Netherlands and its corporate seat is at Breda, The Netherlands.

The articles of association were last amended on 29 May 1997.

Interbrew Central European Holding is registered with the Dutch Commercial Register ( Kamer van Koophandel voor Zuidwest—Nederland ) under number 20054921.

The business objectives of Interbrew Central European Holding are generally those of a holding and financing company.

 

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The accounting year begins on 1 January and ends on 31 December of each year.

No conflicts of interests exist between any duties to Interbrew Central European Holding of Interbrew International B.V. and its managing directors and their private interests.

Under Dutch company law, there is currently no legal corporate governance regime (other than ordinary corporate governance) that Interbrew Central European Holding must comply with.

Interbrew Central European Holding’s issued share capital as of the date of this Form F-4 is €181,512 represented by 400 ordinary shares of common stock par value €453.78 (rounded following conversion to euro) per share. Interbrew Central European Holding has no other classes of shares. The share capital is fully paid up in cash. Interbrew Central European Holding has no notes cum warrants, nor convertible notes outstanding.

Interbrew Central European Holding is a 100% owned indirect subsidiary of Anheuser-Busch InBev SA/NV.

The business address for all managing directors is Ceresstraat 1, 4811 CA, Breda, The Netherlands.

The results of Interbrew Central European Holding are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

Interbrew International B.V.

Interbrew International B.V. (“ Interbrew International ”) is an international holding company holding several of the Parent Guarantor’s local holding companies at the country level. Interbrew International was incorporated on 25 April 1978 as a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) under Dutch law. Its registered office is located at Ceresstraat 1, 4811 CA Breda in The Netherlands and its corporate seat is at Breda, The Netherlands.

The articles of association were last amended on 28 December 2000.

Interbrew International is registered with the Dutch Commercial Register ( Kamer van Koophandel voor Zuidwest—Nederland ) under number 20054440.

The business activities of Interbrew International are generally those of a holding and financing company. Interbrew International operates primarily in the Western Europe and Asia-Pacific zones, for example China, UK, Germany, Belgium and France.

The business address for all managing directors is Ceresstraat 1, 4811 CA Breda, The Netherlands.

No conflicts of interests exist between any duties to Interbrew International of its managing directors and their private interests.

Under Dutch company law, there is currently no legal corporate governance regime (other than ordinary corporate governance) that Interbrew International must comply with.

Interbrew International’s issued share capital as of the date of this Form F-4 is €104,777,851.90 represented by 185,350 A shares of par value €453.78 per share and 216,723 B shares of par value €453.78. Interbrew International has no other classes of shares. The share capital is fully paid up in cash. Interbrew International has no notes cum warrants, nor convertible notes outstanding.

 

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Interbrew International is a 100% owned indirect subsidiary of Anheuser-Busch InBev SA/NV.

The accounting year begins on 1 January and ends on 31 December of each year.

In accordance with a resolution of Anheuser-Busch InBev SA/NV, Interbrew International is exempted from the requirement to prepare consolidated accounts and a consolidated management report.

The results of InBev International are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

Nimbuspath Limited

Nimbuspath Limited (“ Nimbuspath ”) is a holding company for the Parent Guarantor’s operations in the United Kingdom. Nimbuspath was incorporated on 19 September 2001 as a private limited company under United Kingdom law. Its registered office is located at Porter Tun House, 500 Capability Green, Luton, Bedfordshire, LU1 3LS in the United Kingdom.

Nimbuspath is established for an unlimited period. Nimbuspath is registered under the corporate identity number 04290399.

The business activities of Nimbuspath are those of a holding company in the UK and the Republic of Ireland.

The business address for all directors is Porter Tun House, 500 Capability Green, Luton, Bedfordshire, LU1 3LS, United Kingdom.

No conflicts of interests exist between any duties to Nimbuspath of its directors and their private interests.

Under English company law, there is a legal corporate governance regime and Nimbuspath complies with it.

Nimbuspath’s issued share capital as of the date of this Form F-4 is £970,000,001 represented by 970,000,001 ordinary shares of common stock par value £1 per share. Nimbuspath has no other classes of shares. The share capital is fully paid up in cash. Nimbuspath has no notes cum warrants, nor convertible notes outstanding.

Nimbuspath is a 100% owned indirect subsidiary of Anheuser-Busch InBev SA/NV.

The accounting year begins on 1 January and ends on 31 December of each year.

In accordance with Section 400 of the Companies Act 2006, Nimbuspath is exempted from the requirement to prepare group accounts. Under Financial Reporting Standard 1, Nimbuspath is exempt from the requirement to prepare a cash flow statement.

The results of Nimbuspath are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

BrandBrew S.A.

BrandBrew S.A. (“ Brandbrew ”) is a finance vehicle for the Parent Guarantor and also owns several of our brands. Brandbrew was incorporated on 15 May 2000 as a public limited liability company ( société anonyme ) under the Luxembourg Companies Act. Its registered office is located at 5 Parc d’Activité Syrdall, L-5365 Munsbach, Luxembourg.

 

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The articles of association of Brandbrew were last amended on 26 September 2000, 15 February 2002 and 25 July 2007. Brandbrew is established for an unlimited period. Brandbrew is registered with the Luxembourg Register of Commerce and Companies under number B-75696.

The business objectives of Brandbrew are to undertake, in Luxembourg and abroad, financing operations by granting loans to companies which are part of the AB InBev Group. These loans will be refinanced by financial means and instruments such as, inter alia but not limited to, loans from shareholders or group companies or bank loans.

For the purpose of this description, the address of the Board of Directors is 5 Parc d’Activité Syrdall, L-5365 Munsbach, Luxembourg.

No conflicts of interests exist between any duties to Brandbrew of its directors and their private interests.

However, functional conflicts of interests may exist for the directors of Brandbrew due to the roles held by these persons in other members of the AB InBev Group.

Under Luxembourg company law, there is currently no legal corporate governance regime (other than ordinary corporate governance) that Brandbrew must comply with.

BrandBrew is a 100% owned indirect subsidiary of Anheuser-Busch InBev SA/NV.

Brandbrew’s issued and authorised share capital at 31 December 2008 is €717,576,000 represented by 7,175,760 ordinary shares without a nominal value. Brandbrew has no other classes of shares. The share capital is fully paid up in cash. Brandbrew has no notes cum warrants, nor convertible notes outstanding.

The accounting year begins on 1 January and ends on 31 December of each year.

In accordance with a resolution of Anheuser-Busch InBev SA/NV, Brandbrew is exempted from the requirement to prepare consolidated accounts and a consolidated management report.

The results of Brandbrew are consolidated within our financial statements, which are available to the public and may be obtained from Anheuser-Busch InBev SA/NV, Grand Place 1, Brussels, Belgium.

Anheuser-Busch Companies, Inc.

The Issuer acquired Anheuser-Busch Companies, Inc. on November 18, 2008. For more information on Anheuser-Busch, see “Anheuser-Busch Companies, Inc. Historical Financial Information” at AF-1 of this Form F-4.

 

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THE EXCHANGE OFFERS

The following summary of the Registration Rights Agreement and letter of transmittal is not complete and is subject to, and is qualified in its entirety by, all of the provisions of the Registration Rights Agreement and the letter of transmittal, each of which is filed as an exhibit to the registration statement of which this prospectus is part. We urge you to read the entire Registration Rights Agreement carefully.

Purpose and Effect of Exchange Offers

On 16 October 2009, Anheuser-Busch InBev Worldwide Inc. issued U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040 in a private offering, each of which are, subject to certain limitations, irrevocably guaranteed by Anheuser-Busch InBev SA/NV and the Subsidiary Guarantors and which we refer to as the “ Old Notes ”. We are offering to exchange the outstanding Old Notes of each series for our U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, each of which are, subject to certain limitations, irrevocably guaranteed by Anheuser-Busch InBev SA/NV and the Subsidiary Guarantors, which have been registered under the Securities Act and which we refer to as the “ New Notes ”. Each offer to exchange Old Notes of a series for New Notes of the corresponding series is referred to as an “ Exchange Offer ” and, collectively, such offers are referred to as the “ Exchange Offers ”.

The Old Notes were purchased by J.P. Morgan Securities Inc., Banc of America Securities LLC or Deutsche Bank Securities Inc., whom we refer to as the “ Initial Purchasers ”, on 16 October 2009, for resale to qualified institutional buyers in compliance with Rule 144A under the Securities Act and outside of the United States to non-U.S. persons in compliance with Regulation S under the Securities Act. In connection with the sale of the Old Notes, the Issuer, the Guarantors and the Initial Purchasers entered into a Registration Rights Agreement, dated 16 October 2009 (the “ Registration Rights Agreement ”).

Registration Rights

The following description is a summary of the material provisions of the Registration Rights Agreement. This description does not restate that agreement in its entirety. We urge you to read the Registration Rights Agreement in its entirety because it, and not this description, defines your registration rights as holders of the Old Notes. See “Available Information” .

Pursuant to the Registration Rights Agreement, the Issuer and the Guarantors have agreed to file with the SEC the registration statement of which this prospectus is a part. We have agreed in the Registration Rights Agreement to use commercially reasonable efforts to amend and supplement this prospectus in order to allow broker-dealers receiving New Notes in exchange for Old Notes in connection with the Exchange Offers and other persons, if any, with similar prospectus delivery requirements to use this prospectus in connection with the resale of New Notes for a period commencing on the day the Exchange Offers are consummated and continuing for 90 days (or such shorter period during which such broker-dealers are required by law to deliver such prospectus).

The Issuer and the Guarantors have agreed pursuant to the Registration Rights Agreement that they will, subject to certain exceptions:

 

  1.

by 14 May 2010, 210 days after the issue date for the Notes, use their commercially reasonable efforts to file with the SEC this Form F-4, or some other registration statement (the “ Exchange Offer Registration Statement ”) with respect to a registered offer to exchange Old Notes for New Notes;

 

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  2.

use their commercially reasonably efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act by 13 July 2010, 270 days after the issue date for the Old Notes;

 

  3.

use their commercially reasonable efforts to keep the Exchange Offer Registration Statement effective until the closing of the Exchange Offers;

 

  4.

use their commercially reasonable efforts to cause the Exchange Offers, if they have been commenced, to be consummated not later than 12 August 2010, 300 days after the issue date for the Old Notes;

 

  5.

as soon as practicable upon the effectiveness of the Exchange Offer Registration Statement, commence the Exchange Offers; and

 

  6.

keep the Exchange Offers open for a period of not less than 20 business days (or longer if required by applicable law) after the date notice of the Exchange Offers is mailed to the holders of the Old Notes.

In the event that:

 

  1.

any change in law, SEC rules or regulations or applicable interpretations thereof of the staff of the SEC, the Issuer determines that it is not permitted to effect the Exchange Offers; or

 

  2.

for any other reason the Issuer does not consummate the Exchange Offers by 12 August 2010, 300 days of the issue date for the Old Notes; or

 

  3.

upon the written request of any Initial Purchaser holding Old Notes that are not eligible to be exchanged for New Notes in the Exchange Offers and held by it following the consummation of the Exchange Offers; or

 

  4.

upon notice by any holder of Old Notes other than an Initial Purchaser given to the Issuer in writing during the period during which the Exchange Offers are open that (A) due to a change in law or SEC policy it is not entitled to participate in the Exchange Offers, (B) due to a change in law or SEC policy it may not resell the New Notes acquired by it in the Exchange Offers to the public without delivering a prospectus and this prospectus is not appropriate or available for such resales by such holder or (C) it is a broker-dealer and owns Old Notes acquired directly from the Issuer or an affiliate of the Issuer;

then, the Issuer and the Guarantors will, subject to certain exceptions,

 

  1.

as promptly as practicable, use their commercially reasonable efforts to file a shelf registration statement (the “ Shelf Registration Statement ”) covering resales of the Old Notes on or prior to the 30th day after such filing obligation arises (but in no case earlier than 14 May 2010, 210 days following the issue date for the Old Notes );

 

  2.

use their commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective as promptly as practicable after filing and, in any event, on or prior to the 90th calendar day after such filing obligation arises (but in no case earlier than 13 July 2010, 270 days following the issue date of the Old Notes); and

 

  3.

use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective until the earliest of:

 

  (a) one year from the date the filing obligation arises; and

 

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  (b)

the time when all Old Notes registered thereunder are disposed of in accordance therewith, or cease to be outstanding.

The Issuer will, in the event that a Shelf Registration Statement is filed, among other things, provide to each holder for whom such Shelf Registration Statement was filed copies of the prospectus which is a part of the Shelf Registration Statement, notify each holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes, as the case may be. In certain circumstances, the Issuer may suspend its obligations for up to two periods of up to 45 consecutive days (except for the consecutive 45-day period immediately prior to the maturity of the Old Notes), but not more than an aggregate of 60 days during any 365-day period, in relation to the Shelf Registration Statement if the Issuer’s Board of Directors determines in good faith that there is a valid purpose for the suspension, subject to the provisions described below relating to Registration Defaults. A holder selling such Old Notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such holder (including certain indemnification obligations).

Interest Penalty

If any of the following events occur (each such event a “ Registration Default ”), the Issuer will pay additional cash interest on the applicable Old Notes, subject to certain exceptions, from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured if:

 

  1.

the Issuer fails to file the registration statement of which this prospectus is a part on or prior to 14 May 2010, the 210th calendar day following the issue date for the Old Notes;

 

  2.

the registration statement of which this prospectus is a part is not declared effective by the SEC on or prior to 13 July 2010, the 270th calendar day following the issue date for the Old Notes;

 

  3.

the Exchange Offers are not consummated on or prior to 12 August 2010, the 300th calendar day following the issue date for the Notes; or

 

  4.

the Shelf Registration Statement is not declared effective within the time frame specified above.

If a Registration Default exists, the interest rate on the Old Notes will increase by 0.25% per annum, with respect to the first 90-day period (or portion thereof) while a Registration Default is continuing immediately following the occurrence of such Registration Default. Such interest rate will increase by an additional 0.25% per annum at the beginning of each subsequent 90-day period (or portion thereof) while a Registration Default is continuing until all Registration Defaults have been cured, up to a maximum rate of additional interest of 1.00% per annum.

If a Shelf Registration Statement is declared effective but becomes unusable for any reason, and the aggregate number of days in any consecutive 12-month period for which the Shelf Registration Statement is not usable exceeds 30 days in the aggregate, then the interest rate borne by the Old Notes subject to the Shelf Registration Statement will be increased by 0.25% per annum of the principal amount of the Old Notes for the first 30-day period (or portion thereof) beginning on the 31st such day that such Shelf Registration Statement ceases to be usable, which rate shall be increased by an additional 0.25% per annum at the beginning of each subsequent 30-day period; provided that the maximum aggregate increase in the interest rate as a result of a Shelf Registration Statement being unusable (inclusive of any interest that accrues on such Old Notes in connection with a Registration Default) will in no event exceed 1.00% per annum. Upon the Shelf Registration Statement once again becoming usable, the interest rate borne by the Old Notes registered thereon will be reduced to the original interest rate.

 

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All accrued additional cash interest will be paid by the Issuer on the next scheduled interest payment date to Depository Trust Corporation (“ DTC ”) or its nominee by wire transfer of immediately available funds.

All references in the Indenture, in any context, to any interest or other amount payable on or with respect to the Old Notes shall be deemed to include any additional interest payable pursuant to the Registration Rights Agreement, as described above.

Terms of the Exchange Offers

Upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal, for each $1,000 principal amount of Old Notes properly surrendered and not withdrawn before the expiration date of the applicable Exchange Offer, we will issue $1,000 principal amount of New Notes of the corresponding series. Holders may tender some or all of their Old Notes pursuant to the Exchange Offers in denominations of $2,000 and integral multiples of $1,000 in excess thereof. In addition, untendered portions of Old Notes must be in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Exchange Offers are not conditioned upon any minimum aggregate principal amount of Old Notes being tendered.

The form and terms of the New Notes will be the same as the form and terms of the Old Notes except that:

 

   

the New Notes will have a different CUSIP number from the Old Notes;

 

   

the New Notes will be registered under the Securities Act and, therefore, the global securities representing the New Notes will not bear legends restricting the transfer of interests in the New Notes;

 

   

the New Notes will not be subject to the registration rights relating to the Old Notes; and

 

   

the New Notes will not benefit from payment of additional interest in the cases described above.

The New Notes will evidence the same indebtedness as the Old Notes they replace, and will be issued under, and be entitled to the benefits of, the Indenture (as defined below). As a result, each series of Old Notes and the equivalent series of New Notes will be treated as a single series of notes under the Indenture for the purposes of voting and consenting to any matters affecting such series.

No interest will be paid on either the New Notes or the Old Notes at the time of the exchange. The New Notes will accrue interest from and including the last interest payment date on which interest has been paid on the Old Notes or, if no interest has been paid on the Old Notes, from the date of original issue of the Old Notes. Accordingly, the holders of Old Notes that are accepted for exchange will not receive accrued but unpaid interest on Old Notes at the time of tender. Rather, that interest will be payable on the New Notes delivered in exchange for the Old Notes on the first interest payment date after the expiration date of the Exchange Offers.

Under existing SEC interpretations, the New Notes would generally be freely transferable after the Exchange Offers without further registration under the Securities Act, except that broker-dealers receiving the New Notes in the Exchange Offers will be subject to a prospectus delivery requirement with respect to their resale. This view is based on interpretations by the staff of the SEC in interpretative letters issued to other issuers in exchange offers like this one. We have not, however, asked the SEC to consider these particular Exchange Offers in the context of a interpretative letter. Therefore, the SEC might not treat it in the same way it has treated other exchange offers in the past. You will be relying on the interpretative letters that the SEC has issued to third parties in circumstances that we believe are similar to ours. Based on these interpretative letters, the following conditions must be met in order to receive freely transferable New Notes:

 

   

you must not be a broker-dealer that acquired the Old Notes from us or in market-making transactions or other trading activities;

 

   

you must acquire the New Notes in the ordinary course of your business;

 

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you must not be participating, and do not intend to participate, and have no arrangements or understandings with any person to participate in, the distribution of the New Notes within the meaning of the Securities Act; and

 

   

you must not be an affiliate of ours, as defined under Rule 405 of the Securities Act.

By tendering your Old Notes as described in “—Procedures for Tendering”, you will be representing to us that you satisfy all of the above listed conditions. If you do not satisfy all of the above listed conditions:

 

   

you cannot rely on the position of the SEC set forth in the interpretative letters referred to above; and

 

   

you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the New Notes.

For a full list of the representations that each tendering holder of Old Notes must make in order to participate in one or more of the Exchange Offers, see “—Representations on Tendering Old Notes”.

The SEC considers broker-dealers that acquired Old Notes directly from us, but not as a result of market-making activities or other trading activities, to be making a distribution of the New Notes if they participate in the Exchange Offers. Consequently, these broker-dealers must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the New Notes.

A broker-dealer that has bought Old Notes for market-making or other trading activities must comply with the prospectus delivery requirements of the Securities Act in order to resell any New Notes it receives for its own account in the Exchange Offers. The SEC has taken the position that broker-dealers may use this prospectus to fulfill their prospectus delivery requirements with respect to the New Notes. We have agreed in the Registration Rights Agreement to make available a prospectus meeting the requirements of the Securities Act to any broker-dealer for use in connection with any such resale of the New Notes for a period of up to 90 days following the consummation of the relevant Exchange Offer (or for such shorter period of time during which such broker-dealer is required by law to deliver a prospectus).

In addition, the Exchange Offers are made to all holders of Old Notes other than to any such holder in the European Economic Area to whom the Exchange Offers cannot be made without requiring the production of a prospectus for purposes of the Directive 2003/71/EC (which condition may be certified or validated by way of representations from such holders).

Unless you are required to do so because you are a broker-dealer, you may not use this prospectus for an offer to resell, resale or other retransfer of New Notes. We are not making these Exchange Offers to, nor will we accept tenders for exchange from, holders of Old Notes in any jurisdiction in which the Exchange Offers or the acceptance of it would not be in compliance with the securities or blue sky laws of that jurisdiction.

Holders of Old Notes do not have appraisal or dissenters’ rights under state law or under the Indenture in connection with the Exchange Offers. We intend to conduct the Exchange Offers in accordance with the applicable requirements of Regulation 14E under the Exchange Act.

Expiration Date; Extensions; Amendments

The expiration date for each Exchange Offer is 5:00 p.m., New York City time, on                     , 2009, unless we extend the expiration date with respect to any Exchange Offer. We may extend the expiration date of one or more of the Exchange Offers in our sole discretion. If we so extend the expiration date, the term “expiration date” shall mean the latest date and time to which we extend each Exchange Offer.

 

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With respect to each Exchange Offer, we reserve the right, in our sole discretion:

 

   

to, prior to the applicable expiration date, delay accepting any Old Notes;

 

   

to extend the Exchange Offer; or

 

   

to amend the terms of the Exchange Offer in any way we determine.

We will give oral notice promptly followed by written notice of any delay, extension or termination to the exchange agent. In addition, we will give, as promptly as practicable, oral or written notice regarding any delay in acceptance, extension or termination of the Exchange Offer to the registered holders of Old Notes. If we amend the Exchange Offer in a manner that we determine to constitute a material change, or if we waive a material condition, we will (i) promptly disclose the amendment or waiver in a manner reasonably calculated to inform the holders of the applicable series of Old Notes of the amendment or waiver and (ii) extend the Exchange Offer if necessary so that at least five business days remain in the Exchange Offer following notice of the material change, or as otherwise required by law.

We intend to make public announcements of any delay in acceptance, extension, termination, amendment or waiver regarding an Exchange Offer prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date for such Exchange Offer.

Procedures for Tendering

Except in limited circumstances, only a DTC participant listed on a DTC securities position listing with respect to the Old Notes may tender Old Notes in the Exchange Offers. To tender Old Notes in the Exchange Offers:

 

   

you must instruct DTC and a DTC participant by completing the form “Instructions to Registered Holder From Beneficial Owner” accompanying this prospectus of your intention whether or not you wish to tender your Old Notes for New Notes; and

 

   

DTC participants in turn need to follow the procedures for book-entry transfer as set forth below under “—Book-Entry Transfer” and in the letter of transmittal.

By tendering, you will make the representations described below under “—Representations on Tendering Old Notes”. In addition, each broker-dealer that receives New Notes for its account in the Exchange Offers, where the Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities (other than Old Notes acquired directly from either Issuer or its affiliates), must acknowledge in the letter of transmittal that it will comply with the prospectus delivery requirements of the Securities Act in connection with any resale of the New Notes. The letters of transmittal states that, by complying with its obligations, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. See “Plan of Distribution”. The tender by a holder of Old Notes will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.

The method of delivery of an agent’s message and all other required documents, as described under “—Book-Entry Transfer”, to the exchange agent is at the election and risk of the tendering holder of Old Notes. Instead of delivery by mail, we recommend that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery to the exchange agent prior to the expiration date. Delivery of documents to DTC in accordance with its procedures does not constitute delivery to the exchange agent.

 

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We will determine in our sole discretion all questions as to the validity, form, eligibility, including time of receipt, and acceptance and withdrawal of tendered Old Notes, and our determination shall be final and binding on all parties. We reserve the absolute right to reject any and all Old Notes not properly tendered or any Old Notes whose acceptance by us would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to any particular Old Notes either before or after the expiration date. Our interpretation of the terms and conditions of the Exchange Offers, including the instructions in the letter of transmittal, will be final and binding on all parties. The exchange agent shall have no duty, responsibility or liability with respect to any of such matters. Unless waived, holders must cure any defects or irregularities in connection with tenders of Old Notes within a period we determine. Although we intend to request the exchange agent to notify holders of defects or irregularities relating to tenders of Old Notes, neither we, the exchange agent nor any other person will have any duty or incur any liability for failure to give this notification. We will not consider tenders of Old Notes to have been made until these defects or irregularities have been cured or waived. The exchange agent will return any Old Notes that are not properly tendered and as to which the defects or irregularities have not been cured or waived to the tendering holders, unless otherwise provided in the letter of transmittal, promptly following the expiration date.

Book-Entry Transfer

We understand that the exchange agent will make a request promptly after the date of this prospectus to establish accounts with respect to the Old Notes at DTC for the purpose of facilitating the Exchange Offers. Any financial institution that is a participant in DTC’s system may make book-entry delivery of Old Notes by causing DTC to transfer such Old Notes into the exchange agent’s DTC account in accordance with DTC’s electronic Automated Tender Offer Program procedures for such transfer. The exchange of New Notes for tendered Old Notes will only be made after timely:

 

   

confirmation of book-entry transfer of the Old Notes into the exchange agent’s account; and

 

   

receipt by the exchange agent of an “agent’s message” and all other required documents specified in the letter of transmittal.

The confirmation, agent’s message and any other required documents must be received at the exchange agent’s address listed below under “—Exchange Agent” on or before 5:00 p.m., New York City time, on the expiration date of the applicable Exchange Offer.

As indicated above, delivery of documents to DTC in accordance with its procedures does not constitute delivery to the exchange agent.

The term “agent’s message” means a message, transmitted by DTC and received by the exchange agent and forming part of the confirmation of a book-entry transfer, which states that DTC has received an express acknowledgment from a participant in DTC tendering Old Notes stating:

 

   

the aggregate principal amount of Old Notes which have been tendered by the participant;

 

   

that such participant has received an appropriate letter of transmittal and agrees to be bound by the terms of the letter of transmittal and the terms of the Exchange Offers; and

 

   

that we may enforce such agreement against the participant.

Delivery of an agent’s message will also constitute an acknowledgment from the tendering DTC participant that the representations contained in the letter of transmittal and described below under “Representations on Tendering Old Notes” are true and correct.

 

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Representations on Tendering Old Notes

By surrendering Old Notes in the Exchange Offers, you will be representing, among other things, that:

 

   

you are acquiring the New Notes issued in the Exchange Offers in the ordinary course of your business;

 

   

if you are not a broker-dealer registered under the Exchange Act, you are not participating in or intend to participate in the distribution of the New Notes, and you do not intend to engage in and have no arrangement or understanding with any person to participate in the distribution of the New Notes to be issued in the Exchange Offers;

 

   

if you are a broker-dealer registered under the Exchange Act, you did not purchase the Old Notes to be exchanged in the Exchange Offers from the Issuer or any of its affiliates, you will acquire the New Notes for your own account in exchange for Old Notes that you acquired as a result of market-making activities or other trading activities, and you will comply with the prospectus delivery requirements of the Securities Act in connection with a secondary resale of the New Notes, and you cannot rely on the position of the SEC’s staff in their interpretative letters and, in the European Economic Area, you will not make any offer or sale which will require the Issuer to publish a prospectus pursuant to Article 3 of Directive 2003/71/EC (the “ Prospectus Directive ”);

 

   

you are not prohibited by any law or policy from participating in the Exchange Offers;

 

   

you are not an affiliate of ours, as defined in Rule 405 under the Securities Act, or if you are such an “affiliate”, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;

 

   

if you are located in a member state of the European Economic Area which has implemented the Prospectus Directive:

 

  a)

you are a legal entity authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities, or

 

  b)

you are a legal entity which has two or more of: (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000; and (iii) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts,

and you will not make any offer which will require the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive;

 

   

you are not located or resident in the United Kingdom or, if you are located or resident in the United Kingdom, you are a person falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “ Order ”) or within Article 43(2) of the Order, or to whom this Form F-4 may lawfully be communicated in accordance with the Order; and

 

   

you are not acting on behalf of someone who cannot truthfully and completely make such representations.

Withdrawal of Tenders

Your tender of Old Notes pursuant to the Exchange Offers is irrevocable except as otherwise provided in this section. You may withdraw tenders of Old Notes at any time prior to 5:00 p.m., New York City time, on the expiration date.

 

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For a withdrawal to be effective for DTC participants, holders must comply with their respective standard operating procedures for electronic tenders and the exchange agent must receive an electronic notice of withdrawal from DTC prior to 5:00 p.m., New York City time, on the expiration date.

Any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Notes and otherwise comply with the procedures of DTC. We will determine in our sole discretion all questions as to the validity, form and eligibility, including time of receipt, for such withdrawal notices, and our determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offers and no New Notes will be issued with respect to them unless the Old Notes so withdrawn are validly re-tendered. Any Old Notes which have been tendered but which are withdrawn or not accepted for exchange will be returned to the holder without cost to such holder promptly after withdrawal, rejection of tender or termination of the Exchange Offers. Properly withdrawn Old Notes may be re-tendered by following the procedures described above under “—Procedures For Tendering” at any time prior to the applicable expiration date.

Exchange Agent

We have appointed The Bank of New York Mellon Trust Company, N.A. as exchange agent in connection with the Exchange Offers. In such capacity, the exchange agent has no fiduciary duties to the holders of the Old Notes or the holders of the New Notes and will be acting solely on the basis of our directions. Holders of Old Notes should direct questions or requests for assistance with respect to the procedure for tendering or withdrawing tenders and requests for additional copies of this prospectus or the letter of transmittal to the exchange agent addressed as follows:

 

By Mail, Hand Delivery or Overnight Courier:
Bank of New York Mellon Corporation

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East
Attention: Carolle Montreuil
Telephone: (212) 815-5920

  By Facsimile Transmission:
(212) 298-1915
Attention: Carolle Montreuil
Confirm by telephone:
(212) 815-5920

Fees and Expenses

The expense of soliciting tenders pursuant to the Exchange Offers will be borne by us.

We have not retained any dealer-manager in connection with the Exchange Offers and we will not make any payments to brokers, dealers or other persons soliciting acceptances of the Exchange Offers. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its related reasonable out-of-pocket expenses. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the Old Notes and in handling or forwarding tenders for exchange.

Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes. If, however, a transfer tax is imposed for any reason other than the exchange of Old Notes in connection with the Exchange Offers, then the tendering holder must pay the amount of any transfer taxes due, whether imposed on the registered holder or any other persons. If the tendering holder does not submit satisfactory evidence of payment of these taxes or exemption from them with the letter of transmittal, the amount of these transfer taxes will be billed directly to the tendering holder.

 

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Consequences of Failure to Properly Tender Old Notes in the Exchange

We will issue the New Notes in exchange for Old Notes under the Exchange Offers only after timely confirmation of book-entry transfer of the Old Notes into the exchange agent’s account and timely receipt by the exchange agent of an agent’s message and all other required documents specified in the letter of transmittal. Therefore, holders of the Old Notes desiring to tender Old Notes in exchange for New Notes should allow sufficient time to ensure timely delivery. We are under no duty to give notification of defects or irregularities of tenders of Old Notes for exchange or waive any such defects or irregularities.

Old Notes that are not tendered or that are tendered but not accepted by us will, following completion of the Exchange Offers, continue to be subject to the existing restrictions upon transfer under the Securities Act. In addition, any such Old Notes not exchanged for New Notes will remain outstanding and continue to accrue interest, but will not retain any rights under the Registration Rights Agreement (except as set forth therein with respect to the Initial Purchasers and certain broker-dealers).

Participation in the Exchange Offers is voluntary. In the event the Exchange Offers are completed, we will not be required to register the remaining Old Notes. Remaining Old Notes will continue to be subject to the following restrictions on transfer:

 

   

holders may resell Old Notes only if an exemption from registration is available or, outside the United States, to non-U.S. persons in accordance with the requirements of Regulation S under the Securities Act; and

 

   

the remaining Old Notes will bear a legend restricting transfer in the absence of registration or an exemption.

To the extent that Old Notes are tendered and accepted in connection with the Exchange Offers, any trading market for remaining Old Notes could be adversely affected.

Neither we nor our board of directors or similar body make any recommendation to holders of Old Notes as to whether to tender or refrain from tendering all or any portion of their Old Notes pursuant to the Exchange Offers. Moreover, no one has been authorized to make any such recommendation. Holders of Old Notes must make their own decision whether to tender pursuant to the Exchange Offers and, if so, the aggregate amount of Old Notes to tender, after reading this prospectus and the letter of transmittal and consulting with their advisors, if any, based on their own financial position and requirements.

 

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DESCRIPTION OF THE NEW NOTES

The 3.000% notes due 2012 (the “ 2012 Notes ”), the 4.125% notes due 2015 (the “ 2015 Notes ”), the 5.375% notes due 2020 (the “ 2020 Notes ”) and the 6.375% notes due 2040 (the “ 2040 Notes ” and, together with the 2012 Notes, the 2015 Notes and the 2020 Notes, the “ New Notes ” and each separately a “ New Note ”) will be issued, as were the Old Notes, under an Indenture dated 16 October 2009 (as amended and supplemented, the “ Indenture ”), among Anheuser-Busch InBev Worldwide Inc. (the “ Issuer ”), Anheuser-Busch InBev SA/NV (the “ Parent Guarantor ”), each of the Subsidiary Guarantors listed under “—Guarantees” below (the “ Subsidiary Guarantors ” and, together with the Parent Guarantor, the “ Guarantors ”) and The Bank of New York Mellon Trust Company, N.A., as trustee, principal paying agent, transfer agent and registrar (the “ Trustee ”). The following summaries of certain provisions of the New Notes and the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the New Notes and the Indenture, including the definitions of certain terms contained therein. The Indenture is by its terms subject to and governed by the Trust Indenture Act of 1939, as amended. The Indenture and the Supplemental Indentures thereto are filed as Exhibits 4.1 through 4.6 of this Form F-4.

New Notes and Old Notes Will Represent Same Debt

The New Notes of each series will be issued solely in exchange for an equal principal amount of Old Notes of the same series pursuant to the Exchange Offers. The New Notes will evidence the same debt as the Old Notes and both classes of notes will be entitled to the benefits of the Indenture and treated as a single series of debt securities. The terms of the New Notes will be the same in all material respects as the Old Notes except that (i) the New Notes will be registered under the Securities Act, and therefore, will not bear legends restricting the transfer thereof and (ii) the New Notes will not be subject to the registration rights, under the Registration Rights Agreement, relating to the Old Notes.

General

The 2012 Notes will be initially limited to $1,500,000,000 aggregate principal amount and will mature on 15 October 2012, the 2015 Notes will be initially limited to $1,250,000,000 aggregate principal amount and will mature on 15 January 2015, the 2020 Notes will be initially limited to $2,250,000,000 aggregate principal amount and will mature on 15 January 2020 and the 2040 Notes will be initially limited to $500,000,000 aggregate principal amount and will mature on 15 January 2040. The New Notes will be the direct, unconditional, unsecured and unsubordinated general obligations of the Issuer. The New Notes will be senior unsecured obligations of the Issuer and will rank equally with all other existing and future unsecured and unsubordinated debt obligations of the Issuer. The New Notes will bear interest at the respective rates per annum shown on the front cover of this Prospectus from 16 October 2009, payable semi-annually in arrears on 15 April and 15 October of each year, commencing on 15 April 2010, in respect of the 2012 Notes, and on 15 January and 15 July, commencing on 15 July 2010, in respect of the 2015 Notes, the 2020 Notes and the 2040 Notes, and until full repayment of the outstanding principal of the New Notes. Interest will be payable to the Holders of record at the close of business on 1 April and 1 October, in respect of the 2012 Notes and 1 January and 1 July, in respect of the 2015 Notes, the 2020 Notes and the 2040 Notes, as the case may be, immediately preceding such interest payment date, whether or not such day is a Business Day (as defined below). Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The interest rate on the New Notes will be subject to adjustment upon certain rating events as described under “—Interest Rate Adjustment Based on Rating Events”. The New Notes will be repaid at maturity at a price equal to 100% of the principal amount thereof. Each series of New Notes may be redeemed at any time prior to maturity in the circumstances described under “—Optional Redemption” and “—Optional Tax Redemption”. The New Notes will be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The New Notes do not provide for any sinking fund.

The term “ Business Day ” means any day other than a day on which commercial banks or foreign exchange markets are permitted or required to be closed in New York City, London or Brussels. If the date of maturity of interest on or principal of the New Notes or the date fixed for redemption of any New Note is not a

 

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Business Day, then payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue as a result of the delayed payment.

Guarantees

Each New Note will benefit from an unconditional, full and irrevocable guarantee by the Parent Guarantor. Each of the following companies, which are subsidiaries of the Parent Guarantor, will, along with the Parent Guarantor, jointly and severally guarantee the New Notes on a full, unconditional and irrevocable basis:

 

   

InBev Belgium SA/NV;

 

   

BrandBrew S.A.;

 

   

Cobrew NV/SA;

 

   

AB InBev France S.A.S.;

 

   

InBev Nederland N.V.;

 

   

Interbrew International B.V.;

 

   

Interbrew Central European Holding B.V.;

 

   

Nimbuspath Limited;

 

   

AmBrew S.A.; and

 

   

Anheuser-Busch Companies, Inc.

Each guarantee to be provided is referred to as a “ Guarantee ” and collectively, the “ Guarantees ”; the subsidiaries of the Parent Guarantor providing Guarantees are referred to as the “ Subsidiary Guarantors ” and the Parent Guarantor and Subsidiary Guarantors collectively are referred to as the “ Guarantors ”.

All such Guarantees are set forth in the Indenture, or a supplement thereto. The Guarantees provided by several of the Guarantors will be subject to certain limitations set forth below under “—Guarantee Limitations”.

Under the Guarantees, the Guarantors will guarantee to each Holder the due and punctual payment of any principal, accrued and unpaid interest (and all Additional Amounts, if any) due under the New Notes in accordance with the Indenture. Each Guarantor will also pay Additional Amounts (if any) in respect of payments under its Guarantee. The Guarantees will be the full, direct, unconditional, unsecured and unsubordinated general obligations of the Guarantors. The Guarantees will rank pari passu among themselves, without any preference of one over the other by reason of priority of date of issue or otherwise, and at least equally with all other unsecured and unsubordinated general obligations of the Guarantors from time to time outstanding.

Each of the Guarantors other than the Parent Guarantor shall be entitled to terminate its Guarantee, and the Trustee shall execute a release and termination agreement effecting such termination, in the event that at the time its Guarantee of the New Notes is terminated, (i) the relevant Guarantor is released from its guarantee of or is no longer a guarantor under the Issuer’s $45,000,000,000 senior facilities agreement and (ii) the aggregate amount of indebtedness for borrowed money for which the relevant Guarantor is an obligor (as a guarantor or borrower) does not exceed 10% of the consolidated gross assets of the Parent Guarantor as reflected in the balance sheet included in its most recent publicly released interim or annual consolidated financial statements. For purposes of this clause, the amount of a Guarantor’s indebtedness for borrowed money shall not include (A) the New Notes (or the Old Notes,

 

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January Notes or the May Notes), (B) any other debt the terms of which permit the termination of the Guarantor’s guarantee of such debt under similar circumstances, as long as such Guarantor’s obligations in respect of such other debt are terminated at substantially the same time as its guarantee of the New Notes, and (C) any debt that is being refinanced at substantially the same time that the Guarantee of the New Notes is being released, provided that any obligations of the Guarantor in respect of the debt that is incurred in the refinancing shall be included in the calculation of the Guarantor’s indebtedness for borrowed money.

In addition, any Subsidiary Guarantor whose Guarantee is subject to the limitations described below shall be entitled to terminate its Guarantee, and the Trustee shall execute a release and termination agreement effecting such termination, with respect to any or all series of the notes issued under the Indenture, in the event that such Subsidiary Guarantor determines that under the rules, regulations or interpretations of the SEC such Subsidiary Guarantor would be required to include its financial statements in any registration statement filed with the SEC with respect to any series of notes or guarantees issued under the Indenture or in periodic reports filed with or furnished to the SEC (by reason of such limitations or otherwise). Furthermore, each such Subsidiary Guarantor will be entitled to amend or modify by execution of an indenture supplemental to the Indenture the terms of its Guarantee or the limitations applicable to its Guarantee, as set forth below, in any respect reasonably deemed necessary by such Subsidiary Guarantor to meet the requirements of Rule 3-10 under Regulation S-X under the Securities Act (or any successor or similar regulation or exemption) in order for financial statements of such Subsidiary Guarantor not to be required to be included in any registration statement or in periodic reports filed with or furnished to the SEC.

Supplemental Information on Subsidiary Guarantors

AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., InBev Nederland N.V., AmBrew S.A and BrandBrew S.A., the six Subsidiary Guarantors whose Guarantees are subject to the limitations described below under “—Guarantee Limitations”, accounted for approximately two percent (2%) of the total consolidated EBITDA of AB InBev Group for the first six months of 2009 and approximately two percent (2%) of the total consolidated debt of AB InBev Group as of 30 June 2009.

Guarantee Limitations

AB InBev France S.A.S.

Notwithstanding anything to the contrary in the Guarantee provided by AB InBev France S.A.S., such Guarantee will be subject to the following limitations:

 

  (A) the obligations and liabilities of AB InBev France S.A.S. under its Guarantee will not include any obligation or liability which if incurred would constitute the provision of financial assistance within the meaning of article L.225-216 of the French Commercial Code and/or would constitute a “misuse of corporate assets” within the meaning of article L.241-3 or L.242-6 of the French Commercial Code or any other law or regulations having the same effect, as interpreted by French courts; and

 

  (B) the obligations and liabilities of AB InBev France S.A.S. under its Guarantee for the obligations of the Issuer shall be limited, at any time, to an amount equal to the aggregate nominal amount of all notes issued by the Issuer to the extent directly or indirectly on-lent or otherwise provided to AB InBev France S.A.S. and/or any AB InBev France Subsidiary(ies) under intercompany loan or similar arrangements and outstanding at the date a payment is to be made by AB InBev France S.A.S. under its Guarantee.

For the avoidance of doubt, any obligations or liabilities that may arise from AB InBev France acting jointly and severally with the other Guarantors (including as applicable as “ co-débiteur solidaire ”) are subject always to the limitations set out in the preceding paragraphs.

 

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Interbrew International B.V., Interbrew Central European Holding B.V. and InBev Nederland N.V.

With respect to the Guarantees provided by Interbrew International B.V., Interbrew Central European Holding B.V. and InBev Nederland N.V., such Guarantees will not apply to any liability to the extent that it would result in such Guarantee constituting unlawful financial assistance.

AmBrew S.A.

Notwithstanding anything to the contrary in the Guarantee provided by AmBrew S.A., the maximum aggregate liability of AmBrew S.A. under such Guarantee shall not exceed an amount equal to the aggregate of (without double counting):

 

  (A) the aggregate amount of all moneys received by AmBrew S.A. and the AmBrew Subsidiaries as a borrower or issuer under the AmBrew Guaranteed Facilities;

 

  (B) the aggregate amount of all outstanding intercompany loans made to AmBrew S.A. and the AmBrew Subsidiaries by other members of the Anheuser-Busch InBev Group which have been directly or indirectly funded using the proceeds of borrowings under the AmBrew Guaranteed Facilities; and

 

  (C) an amount equal to 100% of the greater of:

 

  I. the sum of AmBrew S.A.’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (other than any subordinated debt already accounted for under (B) above) (both as referred to in article 34 of the Luxembourg law of 19 December 2002 on the commercial register and annual accounts, as amended (the “ Law of 2002 ”)) as reflected in AmBrew S.A.’s most recent annual accounts approved by the competent organ of AmBrew S.A. (as audited by its réviseur d’entreprises (external auditor), if required by law); and

 

  II. the sum of AmBrew S.A.’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (both as referred to in article 34 of the Law of 2002) as reflected in its filed annual accounts available as of the date of its Guarantee.

For the avoidance of doubt, the limitation on AmBrew S.A.’s Guarantee shall not apply to the Guarantee by AmBrew S.A. of any obligations owed by the AmBrew Subsidiaries under the AmBrew Guaranteed Facilities.

In addition to the limitation referred to above in respect of AmBrew’s Guarantee, the obligations and liabilities of AmBrew S.A. under AmBrew’s Guarantee and under any of the AmBrew Guaranteed Facilities shall not include any obligation which, if incurred, would constitute a breach of the provisions on financial assistance as defined by article 49-6 of the Luxembourg Law on Commercial Companies dated 10 August 1915, as amended, to the extent such or an equivalent provision is applicable to AmBrew S.A.

BrandBrew S.A.

Notwithstanding anything to the contrary in the Guarantee provided by BrandBrew S.A., the maximum aggregate liability of BrandBrew S.A. under its Guarantee and as a guarantor of the Brandbrew Guaranteed Facilities (excluding its Guarantee) shall not exceed an amount equal to the aggregate of (without double counting):

 

  (A) the aggregate amount of all moneys received by BrandBrew S.A. and the Brandbrew Subsidiaries as a borrower or issuer under the Brandbrew Guaranteed Facilities;

 

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  (B) the aggregate amount of all outstanding intercompany loans made to BrandBrew S.A. and the Brandbrew Subsidiaries by other members of the AB InBev Group which have been directly or indirectly funded using the proceeds of borrowings under the Brandbrew Guaranteed Facilities; and

 

  (C) an amount equal to 100% of the greater of:

 

  I. the sum of BrandBrew S.A.’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (other than any subordinated debt already accounted for under (B) above) (both as referred to in article 34 of the Law of 2002) as reflected in BrandBrew S.A.’s most recent annual accounts approved by the competent organ of BrandBrew S.A. (as audited by its réviseur d’entreprises (external auditor), if required by law); and

 

  II. the sum of BrandBrew S.A.’s own capital (i) and its subordinated debt ( dettes subordonnées ) (both as referred to in article 34 of the Law of 2002) as reflected in its filed annual accounts available as of the date of its Guarantee.

For the avoidance of doubt, the limitation on the Guarantee provided by BrandBrew S.A. shall not apply to any Guarantee by BrandBrew S.A. of any obligations owed by the Brandbrew Subsidiaries under the Brandbrew Guaranteed Facilities.

In addition to the limitation referred to above in respect of the Guarantee provided by BrandBrew S.A., the obligations and liabilities of Brandbrew S.A. under the Guarantee provided by BrandBrew S.A. and under any of the Brandbrew Guaranteed Facilities shall not include any obligation which, if incurred, would constitute a breach of the provisions on financial assistance as defined by article 49-6 of the Luxembourg Law on Commercial Companies dated 10 August 1915, as amended, to the extent such or an equivalent provision is applicable to Brandbrew S.A.

AmBrew Guaranteed Facilities ” means: (i) the €2,500,000,000 syndicated credit facility agreement dated 8 December 2005 among AB InBev, Fortis Bank and others; (ii) the €200,000,000 facility agreement dated 15 April 2008 between Brandbrew and Fortis Bank as lender; (iii) the €150,000,000 facility agreement dated 20 March 2008 between Brandbrew and Santander Benelux S.A./NV as lender; (iv) the €250,000,000 facility agreement dated 3 April 2008 between BrandBrew S.A. and Société Généralé as lender; (v) the €50,000,000 facility agreement dated as of 29 August 2007 among BrandBrew S.A., AB InBev and S G Immobel SA as lender; (vi) the €150,000,000 facility agreement dated 13 May 2008 between AB InBev, Cobrew NV/SA and BNP Paribas as lender; (vii) the €150,000,000 facility agreement dated 20 June 2008 between, amongst others, AB InBev, Cobrew NV/SA and The Royal Bank of Scotland plc as lender; (viii) the Existing Target Debt; (ix) any notes issued by BrandBrew S.A. or AB InBev under the Programme; (x) the Senior Facility Agreement; and (xi) the New Notes, or any refinancing (in whole or part) of any of the above items for the same or a lower amount;

AmBrew Subsidiaries ” means each entity of which AmBrew has direct or indirect control or owns directly or indirectly more than 50% of the voting share capital or similar right of ownership; and “control” for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise;

Brandbrew Guaranteed Facilities ” means: (i) the €2,500,000,000 syndicated credit facility agreement dated 8 December 2005 among AB InBev, Fortis Bank and others; (ii) the €150,000,000 facility agreement dated 13 May 2008 between AB InBev, Cobrew and BNP Paribas as lender; (iii) the €150,000,000 facility agreement dated 20 June 2008 between, amongst others, AB InBev, Cobrew and The Royal Bank of Scotland plc as lender; (iv) the Existing Target Debt; (v) the US$850,000,000 note purchase and guarantee agreement dated 22 October 2003 and entered into between, amongst others, AB InBev as issuer, Cobrew and Brandbrew; (vi) any notes issued by BrandBrew S.A. or AB InBev under the Programme; (vii) the Senior Facility Agreement; and (viii) the New Notes, or any refinancing (in whole or part) of any of the above items for the same or a lower amount;

 

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Brandbrew Subsidiaries ” means each entity of which BrandBrew S.A. has direct or indirect control or owns directly or indirectly more than 50% of the voting share capital or similar right of ownership; and control for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise;

Existing Target Debt ” means the following notes, debentures and bonds of Anheuser-Busch Companies, Inc.: (i) 6.450% Debentures due 1 September 2037; (ii) 5.50% Notes due 15 January 2018; (iii) 9.0% Debentures due 1 December 2009; (iv) 6.75% Debentures due 15 December 2027; (v) 6.50% Debentures due 1 January 2028; (vi) 5.75% Notes due 1 April 2010; (vii) 7.50% Notes due 15 March 2012; (viii) 7.55% Debentures due 1 October 2030; (ix) 6.80% Debentures due 15 January 2031; (x) 6.00% Notes due 15 April 2011; (xi) 6.80% Debentures due 20 August 2032; (xii) 5.625% Notes due 1 October 2010; (xiii) 6.00% Debentures due 1 November 2041; (xiv) 6.50% Debentures due 1 May 2042; (xv) 6.50% Debentures due 1 February 2043; (xvi) 4.375% Notes due 15 January 2013; (xvii) 5.95% Debentures due 15 January 2033; (xviii) 4.625% Notes due 1 February 2015; (xix) 4.50% Notes due 1 April 2018; (xx) 5.35% Notes due 15 May 2023; (xxi) 4.95% Notes due 15 January 2014; (xxii) 5.05% Notes due 15 October 2016; (xxiii) 5.00% Notes due 1 March 2019; (xxiv) 4.70% Notes due 15 April 2012; (xxv) 5.00% Notes due 15 January 2015; (xxvi) 5.491% Notes due 15 November 2017; (xxvii) 5.75% Debentures due 1 April 2036; (xxviii) 5.60% Notes due 1 March 2017; (xxix) Notes issued on 1 December 1989 by the Development Authority of Cartersville*; (xxx) Notes issued on 1 November 1990 by the Development Authority of Cartersville*; (xxxi) Notes issued on 1 May 1991 by The Industrial Development Authority of the City of St. Louis, Missouri*; (xxxii) Notes issued on 1 April 1997 by the Industrial Development Authority of the County of James City, Virginia*; (xxxiii) Notes issued on 1 April 1997 by the Development Authority of Cartersville*; (xxxiv) Notes issued on 1 August 1999 by the Ohio Water Development Agency*; (xxxv) Notes issued on 1 December 1999 by The Onondaga County Industrial Development Agency*; (xxxvi) Notes issued on 1 July 2000 by the Ohio Water Development Agency*; (xxxvii) Notes issued on 1 November 2001 by the Ohio Water Development Agency*; (xxxviii) Notes issued on 1 March 2002 by the Development Authority of Cartersville*; (xxxix) Notes issued on 1 April 2002 by the Gulf Coast Waste Disposal Authority*; (xl) Notes issued on 1 October 2002 by the City of Jonesboro, Arkansas*; (xli) Notes issued on 1 July 2006 by The Onondaga County Industrial Development Agency*; (xlii) Notes issued on 1 February 2007 by The Business Finance Authority of the State of New Hampshire*; (xliii) Notes issued on 1 February 2007 by the Jacksonville Economic Development Commission*; (xliv) Notes issued on 1 February 2007 by the City of Fort Collins, Colorado*; (xlv) Notes issued on 1 February 2007 by The Industrial Development Authority of the City of St. Louis, Missouri*; (xlvi) Notes issued on 1 February 2007 by the California Statewide Communities Development Authority*; (xlvii) Notes issued on 31 May 2007 by the New Jersey Economic Development Authority*; (xlviii) Notes issued on 1 August 2007 by the Development Authority of Cartersville*; and (xlix) Notes issued on 1 September 2007 by the California Enterprise Development Authority*;

 

*

Anheuser-Busch Companies, Inc. has subsequently become the principal debtor in respect of the notes listed in sub-paragraphs (xxix) to (xlix).

AB InBev France Subsidiary ” means an entity of which AB InBev France has direct or indirect control or owns directly or indirectly more than 50% of the voting share capital or similar right of ownership; and control for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise; and

Programme ” means the Euro Medium Term Note Programme established by Brandbrew S.A. and Anheuser-Busch InBev SA/NV, as issuers, in January 2009.

Optional Redemption

The Issuer may, at its option, redeem any series of New Notes as a whole or in part at any time upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to the greater of:

 

   

100% of the aggregate principal amount of the New Notes to be redeemed; and

 

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as determined by the Independent Investment Banker (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest on the New Notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points in the case of the 2012 Notes, 30 basis points in the case of the 2015 Notes and 35 basis points in the case of each of the 2020 Notes and the 2040 Notes;

plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such redemption date.

Treasury Rate ” means, with respect to any redemption date:

 

   

the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. treasury securities adjusted to constant maturity under the caption “Treasury constant maturities—Nominal”, for the maturity corresponding to the applicable Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of the related New Notes, yields for the two published maturities most closely corresponding to the applicable Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or

 

   

if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the applicable Comparable Treasury Issue, calculated using a price for such Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the related Comparable Treasury Price for such redemption date.

The Treasury Rate will be calculated on the third Business Day preceding such redemption date.

Comparable Treasury Issue ” means the U.S. Treasury security (not inflation-indexed) selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the New Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such New Notes.

Comparable Treasury Price ” means, with respect to a redemption date, (i) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

Independent Investment Banker ” means J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc., BNP Paribas Securities Corp. or Deutsche Bank Securities Inc., as specified by the Issuer, or if all of these firms are unwilling or unable to serve in that capacity, an independent investment banking institution of national standing in the United States appointed by the Issuer.

Reference Treasury Dealer ” means (i) J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc., BNP Paribas Securities Corp. and Deutsche Bank Securities Inc. and their respective successors, provided , however , that if any of the foregoing shall cease to be a primary U.S. government securities dealer in The City of New York (a “ Primary Treasury Dealer ”), the Issuer will substitute therefor another Primary Treasury Dealer and (ii) any three other Primary Treasury Dealers selected by the Issuer after consultation with an Independent Investment Banker.

 

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Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the applicable Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date.

Unless the Issuer (and/or the Guarantors) defaults on payment of the redemption price, from and after the redemption date interest will cease to accrue on the New Notes or portions thereof called for redemption. On the redemption date, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in the Indenture) money sufficient to pay the redemption price of and accrued interest on the New Notes to be redeemed on such date. If fewer than all of the New Notes of any series are to be redeemed, the Trustee will select, not more than 60 days prior to the redemption date, the particular New Notes of such series or portions thereof for redemption from the New Notes of that series not previously called for redemption, on a pro rata basis across such series, or by such method as the Trustee deems fair and appropriate.

Optional Tax Redemption

Each series of New Notes may be redeemed at any time, at the Issuer’s or the Parent Guarantor’s option, as a whole, but not in part, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of the New Notes of such series then outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the redemption date, if (i) any change in, or amendment to, the laws, treaties, regulations or rulings of a Relevant Taxing Jurisdiction (as defined below) or in the interpretation, application or administration of any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the issue date (any such change or amendment, a “ Change in Tax Law ”), the Issuer (or if a payment were then due under a Guarantee, the relevant Guarantor) would be required to pay Additional Amounts, with respect to such series of New Notes and (ii) such obligation cannot be avoided by the Issuer (or the relevant Guarantor) taking reasonable measures available to it. Additional Amounts are payable by the Issuer under the circumstances described below under “—Additional Amounts”; provided, however , that any series of New Notes may not be redeemed to the extent such Additional Amounts arise solely as a result of the Issuer assigning its obligations under such New Notes to a Substitute Issuer, unless this assignment to a Substitute Issuer is undertaken as part of a plan of merger by Parent Guarantor.

Prior to the mailing of any notice of redemption pursuant to the foregoing, the Issuer or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognised standing to the effect that the Issuer or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result of a Change in Tax Law.

No notice of redemption may be given earlier than 90 days prior to the earliest date on which the Issuer or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the New Notes were then due.

The foregoing provisions shall apply mutatis mutandis to any successor person, after such successor person becomes a party to the Indenture.

Holders’ Option to Require Repayment Upon a Change in Control

The following provisions (the “ Change in Control Clause ”) will not be effective unless and until they are approved by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the Change in Control Clause is put to shareholders of the Parent Guarantor at the first annual general meeting after 16 October 2009, and at each successive annual general

 

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meeting of the Parent Guarantor thereafter until such a resolution is passed and, immediately following approval of such a resolution, will file a copy thereof with the Clerk of the Commercial Court of Brussels (“ greffe du tribunal de commerce/griffie van de rechtbank van koophandel ”). The Parent Guarantor will notify the Trustee promptly after the shareholder meeting of the results of the vote on the proposed resolution.

If the general meeting of shareholders of the Parent Guarantor has not approved a Change in Control Clause substantially in the form described below by the date that is 18 months following the initial issue date of the Old Notes, the interest rate applicable to the New Notes will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that a Change in Control Clause benefiting Holders substantially in the form described below has been approved (or unless and until such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the New Notes will decrease by the same amount.

In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs with respect to a series of New Notes (an “ Early Redemption Event ”):

 

  (i) the Issuer will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders of the New Notes of such series, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

 

  (ii) any Holder of the New Notes of such series may, by submitting a redemption notice (the “ Early Redemption Notice ”), demand from the Issuer repayment as of the Effective Date of any (in integral multiples of $1,000 provided that the unrepurchased portion must be in principal amount of at least $2,000) or all of its New Notes which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand, registered mail, or by facsimile transmission to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant New Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

The Issuer will not be required to redeem the New Notes under this clause following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer and such third-party purchases all the New Notes properly tendered and not withdrawn under its offer. The Issuer will also not be required to redeem the New Notes of a particular series under this clause if it has exercised its right to redeem the New Notes of such series in full as described above or has defeased the New Notes as described below.

A “ Change of Control ” means any person or group of persons acting in concert (in each case other than Stichting Anheuser-Busch InBev or any existing direct or indirect certificate holder or certificate holders of Stichting Anheuser-Busch InBev) gaining Control of the Parent Guarantor; provided that a change of control shall not be deemed to have occurred if all or substantially all of the shareholders of the relevant person or group of persons are, or immediately prior to the event which would otherwise have constituted a change of control were, the shareholders of the Parent Guarantor with the same (or substantially the same) pro rata interests in the share capital of the relevant person or group of persons as such shareholders have, or as the case may be, had, in the share capital of the Parent Guarantor.

 

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Acting in concert ” means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the acquisition directly or indirectly of shares in the Parent Guarantor by any of them, either directly or indirectly, to obtain Control of the Parent Guarantor. “Stichting Anheuser-Busch InBev” means the company incorporated under the laws of The Netherlands under registered number 34144185 with registered address at Hofplein 20, 3032AC, Rotterdam, The Netherlands, and its successors.

Change of Control Announcement ” for these purposes means the public announcement by the Parent Guarantor or any actual purchaser relating to a Change of Control.

The “ Change of Control Period ” shall commence on the date of the Change of Control Announcement, but not later than on the date of the Change of Control, and shall end 60 days after the Change of Control (which period shall be extended with respect to a rating agency so long as the rating of the relevant New Notes is under publicly announced consideration for possible downgrade by that rating agency, such extension not to exceed 60 days after the public announcement of such consideration).

Control ” in relation to any entity means either the direct or indirect ownership of more than 50% of the share capital or similar rights of ownership of the entity or the power to direct the management and the policies of the entity whether through the ownership of share capital, contract or otherwise.

A “ Ratings Downgrade ” shall occur if any two solicited credit ratings for the Parent Guarantor’s long-term unsecured debt fall below investment grade or if all three Rating Agencies (as defined below) cease to assign (other than temporarily) a credit rating to the Parent Guarantor. A credit rating below investment grade shall mean, in relation to Standard & Poor’s Rating Services, a rating of BB+ or below, in relation to Moody’s Investor Services Inc., a rating of Ba1 or below, in relation to Fitch, Inc. a rating of BB+ or below and, where another “nationally recognised statistical rating agency” has been designated by the Parent Guarantor, a comparable rating. A Ratings Downgrade shall not occur with respect to a particular Rating Agency in respect of a Change of Control unless the Rating Agency downgrading the Parent Guarantor announces or publicly confirms or informs the Parent Guarantor in writing at its request that the downgrade was the result, in whole or in part, of the applicable Change of Control. If one or more Rating Agencies issues an improved credit rating for the Parent Guarantor prior to the Effective Date so that the circumstances giving rise to the Ratings Downgrade terminate, then the Ratings Downgrade shall be deemed not to have occurred and the Holders shall have no right to demand redemption of their New Notes under this clause.

Rating Agencies ” shall mean each of Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., Fitch, Inc., or Moody’s Investors Services, Inc., their respective successors, or any other nationally recognised statistical rating agency designated by the Parent Guarantor.

If, as a result of this clause, Holders submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of a series of New Notes and Old Notes outstanding, the Issuer will have the ability by notice to the Trustee to redeem the entire outstanding principal amount of such series of New Notes and Old Notes on the Effective Date at the same price as for the New Notes and Old Notes being redeemed under this clause. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Notice of such redemption shall be given by the Issuer to the Holders of the New Notes and the Old Notes of the relevant series in accordance with the Indenture, or at the Issuer’s request, by the Trustee, in each case as soon as practicable after receipt by the Trustee of the foregoing notice from the Issuer.

Interest Rate Adjustment Based on Rating Events

The interest rate payable on a series of New Notes will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to that series of New Notes and Old Notes, as set forth below.

 

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If the debt rating on a series of New Notes and Old Notes from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate on that series will increase from the interest rate otherwise payable on the original issue date by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that, at no time shall the interest rate on any of the New Notes or the Old Notes increase by more than 2.00%, irrespective of ratings, from the original interest rate effective as of the date of issuance of such notes; provided , further that only the two lowest ratings assigned to a series of New Notes and the Old Notes will be taken into account for purposes of any interest rate adjustment.

 

S&P/Fitch

   Moody’s    Adjustment
from
Original
Interest
Rate
(per Rating
Agency)
 

BB+

   Ba1    .25

BB

   Ba2    .50

BB-

   Ba3    .75

B+

   B1    1.00

B

   B2    1.25

B-

   B3    1.50

CCC+

   Caa    1.75

CCC

   Ca    2.00

If at any time the interest rate on a series of New Notes and the Old Notes has been increased as a result of a ratings downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of that series to any of the ratings set forth in the table above, the interest rate on that series will be decreased to the interest rate otherwise payable on that series on the date of the issuance of such notes plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of a series of New Notes and Old Notes to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates that series BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on that series at the date of their issuance.

If at any time during the term of the New Notes, its series is rated A-/A3 or above by any two of the Rating Agencies, the provisions described under this “Interest Rate Adjustment Based on Ratings Event” section will cease to apply to such series and the effective interest rate on such series at original issuance will remain in effect until the maturity or redemption of that series.

Any interest rate increase or decrease described above will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of a series more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an interest payment date to and excluding the next succeeding interest payment date, or in connection with the first interest period, the period from and including the issue date of the relevant notes to and excluding the first interest payment date

Modifications and Amendment

The Issuer, the Guarantors and the Trustee may execute agreements adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental agreement or modifying in any manner the rights of the Holders under the New Notes or the Guarantees only with the consent of the Holders of not less than a majority in aggregate principal amount of the notes then outstanding (irrespective of series) that would be affected by the proposed modification or amendment; provided that no such

 

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agreement shall (a) change the maturity of the principal of, or any installment of interest on, any New Note, or reduce the principal amount or the interest thereof, or extend the time of payment of any installment of interest thereon, or change the currency of payment of principal of, or interest on, any New Note, or change the Issuer’s or a Guarantor’s obligation to pay Additional Amounts, impair or affect the right of any Holder to institute suit for the enforcement of any such payment on or after the due date thereof (or in the case of redemption on or after the redemption date) or change in any manner adverse to the interests of the Holders the terms and provisions of the Guarantees in respect of the due and punctual payment of principal amount of the New Notes then outstanding plus accrued and unpaid interest (and all Additional Amounts, if any) without the consent of the Holder of each New Note so affected; or (b) reduce the aforesaid percentage of notes, the consent of the Holders of which is required for any such agreement, without the consent of the Holders of the affected series of notes then outstanding. To the extent that any changes directly affect fewer than all the series of the notes issued under the Indenture, only the consent of the Holders of notes of the relevant series (in the respective percentages set forth above) will be required.

The Issuer, the Guarantors and the Trustee may, without the consent of the Holders, from time to time execute agreements or amendments or enter into an indenture or indentures supplemental thereto (including in respect of one series of notes only) for one or more of the following purposes:

 

   

to convey, transfer, assign, mortgage or pledge any property or assets to the Trustee or another person as security for the New Notes;

 

   

to evidence the succession of another person to the Issuer or any Guarantors, or successive successions, and the assumption by the successor person of the covenants of the Issuer or any of the Guarantors, pursuant to the Indenture and the New Notes;

 

   

to evidence and provide for the acceptance of appointment of a successor or successors to the Trustee in any of its capacities and to add to or change any of the provisions of the Indenture to facilitate the administration of the trusts created thereunder by more than one trustee;

 

   

to add to the covenants of the Issuer or the Guarantors, for the benefit of the holders of all or any series of the notes issued under the Indenture, or to surrender any rights or powers conferred on the Issuer or the Guarantors in the Indenture;

 

   

to add any additional events of default for the benefit of the Holders of all or any series of New Notes (and if such additional events of default are to be for the benefit of less than all series of Holders, stating that such additional events of default are expressly being included solely for the benefit of such series);

 

   

to add to, change or eliminate any of the provisions of the Indenture in respect of one or more series of New Notes, provided that any such addition, change or elimination (A) shall neither (i) apply to any New Note of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such New Note with respect to such provision or (B) shall become effective only when there is no such New Note outstanding;

 

   

to modify the restrictions on and procedures for, resale and other transfers of the New Notes pursuant to law, regulation or practice relating to the resale or transfer of restricted securities generally;

 

   

to provide for the issuance and terms of any particular series of securities, the rights and obligations of the Guarantors and the holders of the securities of such series, the form or forms of the securities of such series and such other matters in connection therewith as the Issuer and the Guarantors shall consider appropriate, including, without limitation, provisions for (a) additional or different covenants, restrictions or conditions applicable to such series, (b) additional or different events of

 

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default in respect of such series, (c) a longer or shorter period of grace and/or notice in respect of any provision applicable to such series than is otherwise provided, (d) immediate enforcement of any event of default in respect of such series or (e) limitations upon the remedies available in respect of any events of default in respect of such series or upon the rights of the holders of securities of such series to waive any such event of default;

 

   

(a) to cure any ambiguity or to correct or supplement any provision contained in the Indenture, any series of New Notes or the Guarantees, or in any supplemental agreement, which may be defective or inconsistent with any other provision contained therein or in any supplemental agreement, (b) to eliminate any conflict between the terms hereof and the Trust Indenture Act or (c) to make such other provision in regard to matters or questions arising under the Indenture or under any supplemental agreement as the Issuer may deem necessary or desirable and which will not adversely affect the interests of the Holders to which such provision relates in any material respect;

 

   

to “reopen” the New Notes of any series and create and issue additional New Notes having identical terms and conditions as the New Notes of such series (or in all respects except for the issue date, issue price, first interest accrual date and first interest payment date) so that the additional notes are consolidated and form a single series with the outstanding New Notes and any outstanding Old Notes;

 

   

to add any Subsidiary of the Parent Guarantor as a Guarantor with respect to any series of notes, subject to applicable regulatory or contractual limitations relating to such subsidiary’s Guarantee;

 

   

to provide for the release and termination of any Subsidiary Guarantor’s Guarantee in the circumstances described under “—Guarantees” above;

 

   

to provide for any amendment, modification or alteration of any Subsidiary Guarantor’s Guarantee and the limitations applicable thereto in the circumstances described under “—Guarantees” above;

 

   

to make any other change that does not materially adversely affect the interests of the holders of the series of notes affected thereby.

Certain Covenants

Limitation on Liens

So long as any of the New Notes remains outstanding, the Parent Guarantor will not, nor will it permit any Restricted Subsidiary to, create, assume, guarantee or suffer to exist any mortgage, pledge, security interest or lien (an “ Encumbrance ”) on any of its Principal Plants or on any capital stock of any Restricted Subsidiary without effectively providing that the New Notes (together with, if the Parent Guarantor shall so determine, any other indebtedness of the Parent Guarantor then existing or thereafter created ranking equally with the New Notes and any other indebtedness of such Restricted Subsidiary then existing or thereafter created) shall be secured by the security for such secured indebtedness equally and ratably therewith, provided , however , the above limitation does not apply to:

 

  (a) purchase money liens, so long as such liens attach only to the assets so acquired and improvements thereon,

 

  (b) Encumbrances existing at the time of acquisition of property (including through merger or consolidation) or securing indebtedness the proceeds of which are used to pay or reimburse the Parent Guarantor or a Restricted Subsidiary for the cost of such property (provided such indebtedness is incurred within 180 days after such acquisition),

 

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  (c) Encumbrances on property of a Restricted Subsidiary existing at the time it becomes a Restricted Subsidiary,

 

  (d) Encumbrances to secure the cost of development or construction of property, or improvements thereon, provided that the recourse of the creditors in respect of such indebtedness is limited to such property and improvements,

 

  (e) Encumbrances in connection with the acquisition or construction of Principal Plants or additions thereto financed by tax-exempt securities,

 

  (f) Encumbrances securing indebtedness owing to the Parent Guarantor or a Restricted Subsidiary by a Restricted Subsidiary,

 

  (g) Encumbrances existing at the date of the Indenture,

 

  (h) Encumbrances required in connection with state or local governmental programmes which provide financial or tax benefits, provided the obligations secured are in lieu of or reduce an obligation that would have been secured by an Encumbrance permitted under the Indenture,

 

  (i) any Encumbrance arising by operation of law and not securing amounts more than ninety (90) days overdue or otherwise being contested in good faith,

 

  (j) judgment Encumbrances not giving rise to an event of default,

 

  (k) any Encumbrance incurred or deposits made in the ordinary course of business, including, but not limited to, (i) any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other like Encumbrances, (ii) any Encumbrances securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security, and (iii) any easements, rights-of-way, restrictions and other similar charges,

 

  (l) any Encumbrance upon specific items of inventory or other goods and proceeds of the Parent Guarantor or any Restricted Subsidiary securing the Parent Guarantor’s or any such Restricted Subsidiary’s obligations in respect of bankers’ acceptances issued or created for the account of such person to facilitate the purchase, shipment or storage of such inventory or other goods,

 

  (m) any Encumbrance incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of like nature incurred in the ordinary course of business,

 

  (n) any Encumbrance on any Principal Plant of the Parent Guarantor or any Restricted Subsidiary in favour of the Federal Government of the United States or the government of any State thereof, or the government of the United Kingdom, or any state in the European Union, or any instrumentality of any of them, securing the obligations of the Parent Guarantor or any Restricted Subsidiary pursuant to any contract or payments owed to such entity pursuant to applicable laws, rules, regulations or statutes,

 

  (o) any Encumbrance securing taxes or assessments or other applicable governmental charges or levies,

 

  (p)

extensions, renewals or replacements of the Encumbrances referred to in clauses (a) through (o), provided that the amount of indebtedness secured by such extension, renewal or replacement shall not exceed the principal amount of indebtedness being extended, renewed or replaced, together with the amount of any premiums, fees, costs and expenses associated with such extension, renewal or

 

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replacement, nor shall the pledge, mortgage or lien be extended to any additional Principal Plant unless otherwise permitted under this covenant,

 

  (q) as permitted under the provisions described in the following two paragraphs herein and

 

  (r) in connection with sale-leaseback transactions permitted under the Indenture.

Notwithstanding the provisions described in the immediately preceding paragraph, the Parent Guarantor or any Restricted Subsidiary may, without rateably securing the New Notes, create, assume, guarantee or suffer to exist any indebtedness which would otherwise be subject to such restrictions, and renew, extend or replace such indebtedness, provided that the aggregate amount of such indebtedness, when added to the fair market value of property transferred in certain sale and leaseback transactions permitted by Indenture as described below under “Sale-Leaseback Financings” (computed without duplication of amount) does not at the time exceed 15% of Net-Tangible Assets.

If the Parent Guarantor or any Restricted Subsidiary merges or consolidates with, or purchases all or substantially all of the assets of, another corporation, or the Parent Guarantor sells all or substantially all of its assets to another corporation, and if such other corporation has outstanding obligations secured by an Encumbrance which, by reason of an after-acquired property clause or similar provision, would extend to any Principal Plant owned by the Parent Guarantor or such Restricted Subsidiary immediately prior thereto, the Parent Guarantor or such Restricted Subsidiary, as the case may be, will in such event be deemed to have created an Encumbrance, within the prohibition of the covenant described above, unless (a) such merger or consolidation involving a Restricted Subsidiary constitutes a disposition by the Parent Guarantor of its interest in the Restricted Subsidiary or (b) (i) at or prior to the effective date of such merger, consolidation, sale or purchase such Encumbrance shall be released of record or otherwise satisfied to the extent it would extend to such Principal Plant, (ii) prior thereto, the Parent Guarantor or such Restricted Subsidiary shall have created, as security for the New Notes (and, if the Parent Guarantor shall so determine, as security for any other indebtedness of the Parent Guarantor then existing or thereafter created ranking equally with the New Notes and any other indebtedness of such Restricted Subsidiary then existing or thereafter created), a valid Encumbrance which will rank equally and rateably with the Encumbrances of such other corporation on such Principal Plant of the Parent Guarantor or such Restricted Subsidiary, as the case may be, or (iii) such Encumbrance is otherwise permitted or complies with the Covenant described above.

In each instance referred to in the preceding paragraphs where the Parent Guarantor is obligated to provide security for the New Notes (except, for certain issues of indebtedness, in the case of transactions relating to stock of a Restricted Subsidiary), the Parent Guarantor would be required to provide comparable security for other outstanding indebtedness under the indentures and other agreements relating thereto.

Sale-Leaseback Transactions Relating to Principal Plants

 

  (a) Except to the extent permitted under paragraph (c) below, and except for any transaction involving a lease for a temporary period, not to exceed three years, by the end of which it is intended that the use of the leased property by the Parent Guarantor or any Restricted Subsidiary will be discontinued and except for any transaction with a state or local authority that is required in connection with any programme, law, statute or regulation that provides financial or tax benefits not available without such transaction, the Parent Guarantor shall not sell any Principal Plant as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property and the Parent Guarantor will not permit any Restricted Subsidiary to sell to anyone other than the Parent Guarantor or a Restricted Subsidiary any Principal Plant as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property unless:

 

  (i) the net proceeds of such sale (including any purchase money mortgages received in connection with such sale) are at least equal to the fair market value (as determined by an officer of the Parent Guarantor) of such property and

 

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  (ii) subject to paragraph (d) below, the Parent Guarantor shall, within 120 days after the transfer of title to such property (or, if the Parent Guarantor holds the net proceeds described below in cash or cash equivalents, within two years)

 

  (A) purchase, and surrender to the Trustee for retirement as provided in this covenant, a principal amount of New Notes equal to the net proceeds derived from such sale (including the amount of any such purchase money mortgages), or

 

  (B) repay other pari passu indebtedness of the Parent Guarantor or any Restricted Subsidiary in an amount equal to such net proceeds, or

 

  (C) expend an amount equal to such net proceeds for the expansion, construction or acquisition of a Principal Plant, or

 

  (D) effect a combination of such purchases, repayments and plant expenditures in an amount equal to such net proceeds.

 

  (b) At or prior to the date 120 days after a transfer of title to a Principal Plant which shall be subject to the requirements of this covenant, the Parent Guarantor shall furnish to the Trustee:

 

  (i) an Officers’ Certificate stating that paragraph (a) of this covenant has been complied with and setting forth in detail the manner of such compliance, which certificate shall contain information as to

 

  (A) the amount of New Notes theretofore redeemed and the amount of New Notes theretofore purchased by the Parent Guarantor and cancelled by the Trustee and the amount of New Notes purchased by the Parent Guarantor and then being surrendered to the Trustee for cancellation,

 

  (B) the amount thereof previously credited under paragraph (d) below,

 

  (C) the amount thereof which it then elects to have credited on its obligation under paragraph (d) below, and

 

  (D) any amount of other indebtedness which the Parent Guarantor has repaid or will repay and of the expenditures which the Parent Guarantor has made or will make in compliance with its obligation under paragraph (a), and

 

  (ii) a deposit with the Trustee for cancellation of the New Notes then being surrendered as set forth in such certificate.

 

  (c) Notwithstanding the restriction of paragraph (a), the Parent Guarantor and any one or more Restricted Subsidiaries may transfer property in sale-leaseback transactions which would otherwise be subject to such restriction if the aggregate amount of the fair market value of the property so transferred and not reacquired at such time, when added to the aggregate principal amount of indebtedness for borrowed money permitted by the last paragraph of the covenant described under “—Limitation on Liens” which shall be outstanding at the time (computed without duplication of the value of property transferred as provided in this paragraph (c)), does not at the time exceed 15% of Net Tangible Assets.

 

  (d)

The Parent Guarantor, at its option, shall be entitled to a credit, in respect of its obligation to purchase and retire New Notes under this covenant, for the principal amount of any New Notes deposited with the Trustee for the purpose and also for the principal amount of (i) any New Notes theretofore

 

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redeemed at the option of the Parent Guarantor and (ii) any New Notes previously purchased by the Parent Guarantor and cancelled by the Trustee, and in each case not theretofore applied as a credit under this paragraph (d) or as part of a sinking fund arrangement for the New Notes.

 

  (e) For purposes of this covenant, the amount or the principal amount of New Notes which are issued with original issue discount shall be the principal amount of such New Notes that on the date of the purchase or redemption of such New Notes referred to in this covenant could be declared to be due and payable pursuant to the Indenture.

Events of Default

The occurrence and continuance of one or more of the following events will constitute an “Event of Default” under the Indenture and under each series of New Notes and Old Notes:

 

  (a) payment default— (i) the Issuer or a Guarantor fails to pay interest within 30 days from the relevant due date, or (ii) the Issuer or a Guarantor fails to pay the principal (or premium, if any) due on the New Notes or the Old Notes at maturity; provided that to the extent any such failure to pay principal or premium is caused by a technical or administrative error, delay in processing payments or event beyond the control of the Issuer or Guarantors, no Event of Default shall occur for three days following such failure to pay; provided further that, in the case of a redemption payment, no Event of Default shall occur for 30 days following a failure to make such payment; or

 

  (b) breach of other material obligations— the Issuer or a Guarantor defaults in the performance or observance of any of its other material obligations under or in respect of the New Notes or the Old Notes of a series or the Indenture and such default remains unremedied for 90 days after there has been given a written notice to the Issuer and the Parent Guarantor by the Trustee or to the Issuer, the Parent Guarantor and the Trustee by the Holders of at least 25% in principal amount of the New Notes and Old Notes of the series affected thereby, specifying such default or breach and requiring it to be remedied and stating that such notice is a “ Notice of Default ” under the New Notes and the Old Notes of such series; or

 

  (c) cross-acceleration— any obligation for the payment or repayment of borrowed money having an aggregate outstanding principal amount of at least €100,000,000 (or its equivalent in any other currency) of the Issuer or a Guarantor becomes due and payable prior to its stated maturity by reason of a default and is not paid within 30 days; or

 

  (d) bankruptcy or insolvency— a court of competent jurisdiction commences bankruptcy or other insolvency proceedings against the Issuer, the Parent Guarantor or a Guarantor that is a Significant Subsidiary under the applicable laws of their respective jurisdictions of incorporation, or the Issuer, the Parent Guarantor or a Guarantor that is a Significant Subsidiary applies for or institutes such proceedings or offers or makes an assignment for the benefit of its creditors generally, or a third party institutes bankruptcy or insolvency proceedings against the Issuer, the Parent Guarantor or a Guarantor that is a Significant Subsidiary and such proceedings are not discharged or stayed within 90 days; or

 

  (e) impossibility due to government action— any governmental order, decree or enactment shall be made in or by Belgium or the jurisdiction of incorporation of a Guarantor that is a Significant Subsidiary whereby the Issuer, the Parent Guarantor, or such Guarantor that is a Significant Subsidiary is prevented from observing and performing in full its obligations as set forth in the terms and conditions of the New Notes and the Guarantees, respectively, and this situation is not cured within 90 days, or

 

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  (f) invalidity of the Guarantees— the Guarantees provided by the Parent Guarantor or a Guarantor that is a Significant Subsidiary cease to be valid and legally binding for any reason whatsoever or the Parent Guarantor or a Guarantor that is a Significant Subsidiary seeks to deny or disaffirm its obligations under the Guarantee.

If an Event of Default occurs and is continuing with respect to the New Notes and the Old Notes of any series, then in each and every case, unless the principal of all of the New Notes and Old Notes of such series shall already have become due and payable (in which case no action is required for the acceleration of the New Notes and Old Notes of such series), the Holders of not less than 25% in aggregate principal amount of the New Notes and Old Notes of such series then outstanding, by written notice to the Issuer, the Parent Guarantor and the Trustee as provided in the Indenture, may declare the entire principal of all the New Notes and Old Notes of such series, and the interest accrued thereon, to be due and payable immediately, provided, however, that if an Event of Default specified in paragraph (d) above with respect to any series of New Notes and Old Notes at the time outstanding occurs, the principal amount of that series shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable. Under certain circumstances, the Holders of a majority in aggregate principal amount of a series of New Notes and Old Notes then outstanding may, by written notice to the Issuer and the Trustee as provided in the Indenture, waive all defaults and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.

Substitution of the Issuer or Guarantor; Consolidation, Merger and Sale of Assets

In all cases subject to the provisions described above under “—Holders’ Option to Require Repayment upon a Change in Control”, (i) the Issuer or a Guarantor, without the consent of the Holders of any of the New Notes, may consolidate with, or merge into, or sell, transfer, lease or convey all or substantially all of their respective assets to, any corporation and (ii) the Issuer may at any time substitute for the Issuer either a Guarantor or any Affiliate (as defined below) of a Guarantor as principal debtor under the New Notes (a “ Substitute Issuer ”); provided that:

 

  (a) the Substitute Issuer or any other successor company shall expressly assume the Issuer’s or such Guarantor’s respective obligations under the New Notes or the Guarantees, as the case may be, and the Indenture;

 

  (b) any other successor company is organized under the laws of a member country of Organisation for Economic Co-Operation and Development;

 

  (c) the Issuer is not in default of any payments due under the New Notes and immediately before and after giving effect to such consolidation, merger, sale, transfer, lease or conveyance no Event of Default shall have occurred and be continuing;

 

  (d) in the case of a Substitute Issuer:

 

  (i) the obligations of the Substitute Issuer arising under or in connection with the New Notes and the Indenture are fully, irrevocably and unconditionally guaranteed by the Parent Guarantor and each Subsidiary Guarantor (if any) on the same terms as existed immediately prior to such substitution under the Guarantees given by such Guarantors;

 

  (ii) the Parent Guarantor, the Issuer and the Substitute Issuer jointly and severally indemnify each Holder for any income tax or other tax (if any) recognised by such Holder solely as a result of the substitution of the Substitute Issuer (and not as a result of any transfer by such Holder);

 

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  (iii) each stock exchange on which the New Notes are listed shall have confirmed that, following the proposed substitution of the Substitute Issuer, such New Notes will continue to be listed on such stock exchange;

 

  (iv) each rating agency that rates the New Notes shall have confirmed that, following the proposed substitution of the Substitute Issuer, such New Notes will continue to have the same or better rating as immediately prior to such substitution; and

 

  (e) written notice of such transaction shall be promptly provided to the Holders.

For purposes of the foregoing, “ Affiliate ” shall mean, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person.

Upon the effectiveness of any substitution, all of the foregoing provisions will apply mutatis mutandis, and references elsewhere herein to the Issuer or a Guarantor will, where the context so requires, be deemed to be or include references, to any successor company.

Discharge and Defeasance

Discharge of Indenture

The Indenture provides that the Issuer and the Guarantors will be discharged from any and all obligations in respect of the Indenture (except for certain obligations to register the transfer of or New Notes, replace stolen, lost or mutilated New Notes, make payments of principal and interest and maintain paying agencies) if:

 

   

the Issuer or the Guarantors have paid or caused to be paid in full the principal of and interest on all New Notes outstanding thereunder;

 

   

the Issuer or the Guarantors shall have delivered to the Trustee for cancellation all New Notes outstanding theretofore authenticated; or

 

   

all New Notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable; (ii) will become due and payable in accordance with their terms within one year or (iii) are to be, or have been, called for redemption as described under “—Optional Redemption” or “—Optional Tax Redemption” within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and, in any such case, the Issuer or the Guarantors shall have irrevocably deposited with the Trustee as trust funds in irrevocable trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such New Notes, (a) cash in U.S. dollars in an amount, or (b) U.S. Government Obligations (as defined below) which through the payment of interest thereon and principal thereof in accordance with their terms will provide not later than the due date of any payment, cash in U.S. dollars in an amount, or (c) any combination of (a) and (b), sufficient to pay all the principal of, and interest (and Additional Amounts, if any) on, all such New Notes not theretofore delivered to the Trustee for cancellation on the dates such payments are due in accordance with the terms of the New Notes and all other amounts payable under the Indenture by the Issuer.

U.S. Government Obligations ” means securities which are (i) direct obligations of the U.S. government or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the U.S. government, the payment of which is unconditionally guaranteed by the U.S. government, which, in either case, are full faith and credit obligations of the U.S. government payable in U.S. dollars and are not callable or redeemable at the option of the issuer thereof.

 

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Covenant Defeasance

The Indenture also provides that the Issuer and the Guarantors need not comply with certain covenants of the Indenture (including those described under “—Certain Covenants—Limitation on Liens”), and the Guarantors shall be released from their obligations under the Guarantees, if:

 

   

the Issuer (or the Guarantors) irrevocably deposit with the Trustee as trust funds in irrevocable trust, specifically pledged as security for, and dedicated solely to, the benefit of the holders of such New Notes, (i) cash in U.S. dollars in an amount, or (ii) U.S. government obligations which through the payment of interest thereon and principal thereof in accordance with their terms will provide not later than one day before the due date of any payment cash in U.S. dollars in an amount, or (iii) any combination of (i) and (ii), sufficient to pay all the principal of, and interest on, the New Notes then outstanding on the dates such payments are due in accordance with the terms of the New Notes;

 

   

certain events of default, or events which with notice or lapse of time or both would become such an event of default, shall not have occurred and be continuing on the date of such deposit;

 

   

the Issuer, or the Guarantors, as the case may be, deliver to the Trustee an opinion of tax counsel of recognised standing with respect to U.S. federal income tax matters to the effect that the beneficial owners of the New Notes will not recognise income, gain or loss for U.S. federal income tax purposes as a result of the exercise of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would be the case if such Covenant Defeasance had not occurred;

 

   

the Issuer, or the Guarantors, as the case may be, deliver to the Trustee an opinion of tax counsel of recognised standing in its jurisdiction of incorporation to the effect that such deposit and related Covenant Defeasance will not cause the Holders, other than Holders who are or who are deemed to be residents of such jurisdiction of incorporation or use or hold or are deemed to use or hold their New Notes in carrying on a business in such jurisdiction of incorporation, to recognise income, gain or loss for income tax purposes in such jurisdiction of incorporation, and to the effect that payments out of the trust fund will be free and exempt from any and all withholding and other income taxes of whatever nature of such jurisdiction of incorporation or political subdivision thereof or therein having power to tax, except in the case of New Notes beneficially owned (i) by a person who is or is deemed to be a resident of such jurisdiction of incorporation or (ii) by a person who uses or holds or is deemed to use or hold such New Notes in carrying on a business in such jurisdiction of incorporation; and

 

   

the Issuer, or the Guarantors, as the case may be, deliver to the Trustee an officers’ certificate and an opinion of legal counsel of recognised standing, each stating that all conditions precedent provided for relating to such Covenant Defeasance have been complied with.

The effecting of these arrangements is also known as “ Covenant Defeasance ”.

Additional Amounts

To the extent that any Guarantor is required to make payments in respect of the New Notes, such Guarantor will make all payments in respect of the New Notes without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organised, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax (the “ Relevant Taxing Jurisdiction ”) unless such withholding or deduction is required by law. In such event, such Guarantor will pay to the Holders such additional amounts (the “ Additional Amounts ”) as shall be necessary in

 

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order that the net amounts received by the Holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:

 

  (a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by the Guarantor from payment of principal or interest made by it, or

 

  (b) are payable by reason of the Holder or beneficial owner having, or having had, some personal or business connection with such Relevant Taxing Jurisdiction and not merely by reason of the fact that payments in respect of the New Notes or the Guarantees are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in the Relevant Taxing Jurisdiction, or

 

  (c) are imposed or withheld by reason of the failure of the Holder or beneficial owner to provide certification, information, documents or other evidence concerning the nationality, residence, or identity of the Holder and beneficial owner or to make any valid or timely declaration or similar claim or satisfy any other reporting requirements relating to such matters, whether required or imposed by statute, treaty, regulation or administrative practice, as a precondition to exemption from, or a reduction in the rate of withholding or deduction of such taxes, or

 

  (d) consist of any estate, inheritance, gift, sales, excise, transfer, personal property or similar taxes, or

 

  (e) are imposed on or with respect to any payment by the applicable Guarantors to the registered Holder if such Holder is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent that taxes would not have been imposed on such payment had such registered Holder been the sole beneficial owner of such New Note, or

 

  (f) are deducted or withheld pursuant to (i) any European Union directive or regulation concerning the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Relevant Taxing Jurisdiction or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such directive, regulation, treaty or understanding, or

 

  (g) are payable by reason of a change in law or practice that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and written notice thereof is provided to the Holders, whichever occurs later, or

 

  (h) are payable because any New Note was presented to a particular paying agent for payment if the New Note could have been presented to another paying agent without any such withholding or deduction, or

 

  (i) are payable for any combination of (a) through (h) above.

References to principal or interest in respect of the New Notes shall be deemed to include any Additional Amounts, which may be payable as set forth in the Indenture.

The preceding covenant regarding Additional Amounts will not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States; provided, however , that such covenant will apply to the Issuer at any time when it is incorporated in a jurisdiction outside of the United States.

 

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Indemnification of Judgment Currency

To the fullest extent permitted by applicable law, the Issuer and each of the Guarantors will indemnify each Holder against any loss incurred by such Holder as a result of any judgment or order being given or made for any amount due under any New Note or Guarantee and such judgment or order being expressed and paid in a currency (the “ Judgment Currency ”), which is other than U.S. dollars and as a result of any variation as between (i) the rate of exchange at which the U.S. dollar is converted into the Judgment Currency for the purposes of such judgment or order and (ii) the spot rate of exchange in The City of New York at which the Holder on the date of payment of such judgment is able to purchase U.S. dollars with the amount of the Judgment Currency actually received by such Holder. This indemnification will constitute a separate and independent obligation of the Issuer or each of the Guarantors, as the case may be, and will continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “ spot rate of exchange ” includes any premiums and costs of exchange payable in connection with the purchase of, or conversion into, U.S. dollars.

Governing Law; Submission to Jurisdiction

The Indenture, the New Notes and the Guarantees will be governed by and construed in accordance with the laws of the State of New York.

The Issuer and the Guarantors have irrevocably submitted to the non-exclusive jurisdiction of the courts of any U.S. state or federal court in the Borough of Manhattan in The City of New York, New York with respect to any legal suit, action or proceeding arising out of or based upon the Indenture, the New Notes or the Guarantees.

Regarding the Trustee, Paying Agent, Transfer Agent and Registrar

For a description of the duties and the immunities and rights of any Trustee, paying agent, transfer agent or registrar under the Indenture, reference is made to the Indenture, and the obligations of any Trustee, paying agent, transfer agent and registrar to the Holder are subject to such immunities and rights.

Definitions

Net Tangible Assets ” means the total assets of the Parent Guarantor and its Restricted Subsidiaries (including, with respect to the Parent Guarantor, its net investment in subsidiaries that are not Restricted Subsidiaries) after deducting therefrom (a) all current liabilities (excluding any thereof constituting debt by reason of being renewable or extendable) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense, organisation and developmental expenses and other like segregated intangibles, all as computed by the Parent Guarantor in accordance with generally accepted accounting principles applied by the Parent Guarantor as of a date within 90 days of the date as of which the determination is being made; provided, that any items constituting deferred income taxes, deferred investment tax credit or other similar items shall not be taken into account as a liability or as a deduction from or adjustment to total assets.

Principal Plant ” means (a) any brewery, or any manufacturing, processing or packaging plant, now owned or hereafter acquired by the Parent Guarantor or any Subsidiary, but shall not include (i) any brewery or manufacturing, processing or packaging plant which the Parent Guarantor shall by board resolution have determined is not of material importance to the total business conducted by the Parent Guarantor and its Subsidiaries, (ii) any plant which the Parent Guarantor shall by board resolution have determined is used primarily for transportation, marketing or warehousing (any such determination to be effective as of the date specified in the applicable board resolution) or (iii) at the option of the Parent Guarantor, any plant that (A) does not constitute part of the brewing operations of the Parent Guarantor and its Subsidiaries and (B) has a net book value, as reflected on the balance sheet contained in the Parent Guarantor’s financial statements of not more than $100,000,000, and (b) any other facility owned by the Parent Guarantor or any of its Subsidiaries that the Parent

 

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Guarantor shall, by board resolution, designate as a Principal Plant. Following any determination, designation or election referred to herein that a brewery or plant shall not be included as a Principal Plant, the Parent Guarantor may, at its option, by board resolution, elect that such facility subsequently be included as a Principal Plant.

Restricted Subsidiary ” means (a) any Subsidiary which owns or operates a Principal Plant, (b) any other subsidiary which the Parent Guarantor, by board resolution, shall elect to be treated as a Restricted Subsidiary, until such time as the Parent Guarantor may, by further board resolution, elect that such Subsidiary shall no longer be a Restricted Subsidiary, successive such elections being permitted without restriction, and (c) the Issuer and the Subsidiary Guarantors; provided that each of Companhia de Bebidas das Américas—AmBev and Grupo Modelo S.A.B. de C.V. shall not be “Restricted Subsidiaries” until and unless the Parent Guarantor owns, directly or indirectly, 100% of the equity interests in such company. Any such election will be effective as of the date specified in the applicable board resolution.

Significant Subsidiary ” means any Subsidiary (i) the consolidated revenue of which represents 10% of more of the consolidated revenue of the Parent Guarantor, (ii) the consolidated earnings before interest, taxes, depreciation and amortisation (“ EBITDA ”) of which represents 10% or more of the consolidated EBITDA of the Parent Guarantor or (iii) the consolidated gross assets of which represent 10% or more of the consolidated gross assets of the Parent Guarantor, in each case as reflected in the most recent annual audited financial statements of the Parent Guarantor, provided that (A) in the case of a Subsidiary acquired by the Parent Guarantor during or after the financial year shown in the most recent annual audited financial statements of the Parent Guarantor, such calculation shall be made on the basis of the contribution of the Subsidiary considered on a pro-forma basis as if it had been acquired at the beginning of the relevant period, with the pro-forma calculation (including any adjustments) being made by the Parent Guarantor acting in good faith and (B) EBITDA shall be calculated by the Parent Guarantor in substantially the same manner as it is calculated for the amounts shown in the “Summary Financial Information” included in Form F-4.

Subsidiary ” means any corporation of which more than 50% of the issued and outstanding stock entitled to vote for the election of directors (otherwise than by reason of default in dividends) is at the time owned directly or indirectly by the Parent Guarantor or a Subsidiary or Subsidiaries or by the Parent Guarantor and a Subsidiary or Subsidiaries.

 

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SUMMARY OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarises the material U.S. federal income tax consequences of the Exchange Offers. It applies to you only if you tender your Old Notes for New Notes in one or more of the Exchange Offers. This section is based on the U.S. Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, and published rulings and court decisions, all as currently in effect and subject to change, possibly with retroactive effect.

YOU SHOULD CONSULT WITH YOUR TAX ADVISORS AS TO THE U.S. FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF PARTICIPATING IN THE EXCHANGE OFFERS

Treatment of the Exchange

For United States federal income tax purposes, you should not be treated as having disposed of Old Notes in a taxable exchange solely because you exchanged Old Notes for New Notes, and you therefore should not recognize gain or loss as a result of this exchange. Accordingly, for United States federal income tax purposes, your tax basis in the New Notes should equal your basis in your Old Notes, your holding periods of the New Notes should include the holding period in your exchanged Old Notes, and payments of interest, premium and principal on the New Notes should be treated in the same manner as such payments were treated with respect to the Old Notes.

 

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PLAN OF DISTRIBUTION

These Exchange Offers do not constitute an invitation to participate in the Exchange Offers in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this Form F-4 in certain jurisdictions may be restricted by law. Persons into whose possession this Form F-4 comes are required by the Issuer to inform themselves about, and to observe, any such restrictions.

If you want to participate in the Exchange Offers, you must represent and agree, among other things, that:

 

   

you are acquiring the New Notes issued in the Exchange Offers in the ordinary course of your business;

 

   

if you are not a broker-dealer registered under the Exchange Act, you are not participating in or intend to participate in the distribution of the New Notes, and you do not intend to engage in and have no arrangement or understanding with any person to participate in the distribution of the New Notes to be issued in the Exchange Offers;

 

   

if you are a broker-dealer registered under the Exchange Act, you did not purchase the Old Notes to be exchanged in the Exchange Offers from the Issuer or any of its affiliates, you will acquire the New Notes for your own account in exchange for Old Notes that you acquired as a result of market-making activities or other trading activities, and you will comply with the prospectus delivery requirements of the Securities Act in connection with a secondary resale of the New Notes, and you cannot rely on the position of the SEC’s staff in their interpretative letters and, in the European Economic Area, you will not make any offer or sale which will require the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive;

 

   

you are not prohibited by any law or policy from participating in the Exchange Offers;

 

   

you are not an affiliate of ours, as defined in Rule 405 under the Securities Act, or if you are such an “affiliate”, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;

 

   

if you are located in a member state of the European Economic Area which has implemented the Prospectus Directive:

 

  a)

you are a legal entity authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; or

 

  b)

you are a legal entity which has two or more of: (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000; and (iii) an annual net turnover of more than €50,000,000, as shown in your last annual or consolidated accounts,

 

      

and you will not make any offer which will require the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive;

 

   

you are not located or resident in the United Kingdom or, if you are located or resident in the United Kingdom, you are a person falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “ Order ”) or within Article 43(2) of the Order, or to whom this Form F-4 may lawfully be communicated in accordance with the Order; and

 

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you are not acting on behalf of someone who cannot truthfully and completely make such representations.

If you fail to satisfy any of these conditions, you cannot rely on the position of the SEC set forth in the interpretative letters referred to above under “The Exchange Offers—Terms of the Exchange Offers” and you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the New Notes.

Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offers must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such New Notes were acquired as a result of market making activities or other trading activities. We have agreed in the Registration Rights Agreement that we will allow broker-dealers to use this prospectus in connection with the resale of such New Notes, for a period commencing on the day the relevant Exchange Offer is consummated and continuing for 90 days (or such shorter period during which participating broker-dealers are required by law to deliver such prospectus).

We will not receive any proceeds from any sale of New Notes by broker-dealers. New Notes received by broker-dealers for their own account pursuant to the Exchange Offers may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such New Notes. Any broker-dealer that resells New Notes that were received by it for its own account pursuant to the Exchange Offers and any broker or dealer that participates in a distribution of such New Notes may be deemed to be an “underwriter” within the meaning of the Securities Act, and any profit on any such resale of New Notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 90 days after the expiration date, we will send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. Any such requests should be directed to the Exchange Agent.

We have agreed in the Registration Rights Agreement to pay all expenses incident to the Exchange Offers other than commissions or concessions of any brokers or dealers and will indemnify the holders of the securities, (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

By accepting an Exchange Offer, each broker-dealer that receives New Notes in the Exchange Offers agrees that it will stop using this prospectus if it receives notice from us of any event which makes any statement in this prospectus false in any material respect or which requires any changes in this prospectus in order to make the statements true.

We are delivering copies of this prospectus in electronic form through the facilities of DTC. You may obtain paper copies of the prospectus by contacting the exchange agent at its address specified on the inside back cover of this prospectus. By participating in an Exchange Offer, you will (unless you have requested paper delivery of documents) be consenting to electronic delivery of these documents.

 

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VALIDITY OF THE NEW NOTES AND THE GUARANTEES

The validity of the New Notes and of the Guarantees, except for the authorization of the Guarantees issued by Anheuser-Busch InBev SA/NV, InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited and AmBrew S.A. will be passed upon for us by Sullivan & Cromwell LLP, New York, New York. The authorisation of the Guarantees issued by Anheuser-Busch InBev SA/NV, InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited and AmBrew S.A. will be passed upon for us by Linklaters, LLP.

EXPERTS

Our financial statements as of 31 December 2008 and 2007 and for each of the three years in the period ended 31 December 2008 included in this Form F-4 have been so included in reliance on the audit reports of Klynveld Peat Marwick Goerdeler (“ KPMG ”) Réviseurs d’Entreprises SCCRL/Bedrijfsrevisoren BCVBA, independent registered public accounting firm, and PricewaterhouseCoopers LLP, independent registered public accounting firm, given on the authority of said firms as experts in auditing and accounting. KPMG (Avenue du Bourget/Bourgetlaan 40, 1130 Brussels, Belgium) is a member of the Institut des Réviseurs d’Entreprises/Instituut der Bedrijfsrevisoren.

The audited financial statement of Anheuser-Busch Inc. as of 31 December 2008, not separately presented in this Form F-4, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, whose report thereon appears herein. Such financial statement, to the extent it has been included in our financial statements, has been so included in reliance on the report of such independent registered public accounting firm given on the authority of said firm as experts in auditing and accounting.

The audited financial statements of Anheuser-Busch Inc. as of 31 December 2007 and 2006 and for each of the three years in the period ended 31 December 2007 included in this Form F-4 have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP (800 Market Street, St. Louis, Missouri 63101) is a member of the American Institute of Certified Public Accountants.

Consents to the inclusion in this Form F-4 of such reports by KPMG and PricewaterhouseCoopers LLP have been filed as Exhibits 23.1 and 23.2 to this Form F-4, respectively.

FINANCIAL STATEMENTS

The consolidated financial statements are attached hereto starting on page F-1 of this Form F-4. The audit report of KPMG, independent registered public accounting firm, is included herein immediately preceding the audited consolidated financial statements.

Also included is an unaudited pro-forma condensed consolidated income statement and accompanying notes starting on page PF-1 of this Form F-4. Further, we have attached audited financial statements and schedules of Anheuser-Busch Companies, Inc. for the year ended 31 December 2007 and the unaudited nine-month period ended 30 September 2008 starting on page AF-1 of this Form F-4. The audit report of PricewaterhouseCoopers LLP, independent registered public accounting firm, is included herein immediately preceding the audited Anheuser-Busch Companies, Inc. financial statements.

 

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AB INBEV GROUP ACTUAL HISTORICAL FINANCIAL INFORMATION

Audited consolidated financial statements

 

Report of Independent Registered Public Accounting Firm

   F-2

Consolidated income statement for the years ended 31 December 2008, 2007 and 2006

   F-3

Consolidated statement of recognized income and expenses for the years ended 31  December 2008, 2007 and 2006

   F-3

Consolidated balance sheet as of 31 December 2008 and 2007

   F-4

Consolidated cash flow statement for the years ended 31 December 2008, 2007 and 2006

   F-5

Notes to the consolidated financial statements

   F-6

Unaudited condensed consolidated interim financial statements

 

Unaudited condensed consolidated interim income statement for the six-month periods ended 30  June 2009 and 2008

   F-84

Unaudited condensed consolidated interim statement of comprehensive income for the six-month periods ended 30 June 2009 and 2008

   F-84

Unaudited condensed consolidated interim statement of financial position as of 30  June 2009 and 31 December 2008

   F-85

Unaudited condensed consolidated interim statement of changes in equity for the six-month periods ended 30 June 2009 and 2008

   F-86

Unaudited condensed consolidated interim statement of cash flows for the six-month periods ended 30  June 2009 and 2008

   F-87

Notes to the unaudited condensed consolidated interim financial statements

   F-88

 

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Anheuser-Busch InBev SA/NV:

We have audited the accompanying consolidated balance sheets of Anheuser-Busch InBev SA/NV and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, recognized income and expenses and cash flows for each of the years in the three-year period ended December 31, 2008. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the balance sheet of Anheuser-Busch Companies, Inc. and subsidiaries as of December 31, 2008, which balance sheet reflects total assets constituting 15,3 percent at December 31, 2008, of the related consolidated totals. The balance sheet of Anheuser-Busch Companies, Inc and subsidiaries was audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for certain consolidated companies at December 31, 2008, is based solely on the report of the other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Anheuser-Busch InBev SA/NV and subsidiaries as of December 31, 2008 and 2007 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008 in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and IFRS as adopted by the European Union.

KPMG Bedrijfsrevisoren – Réviseurs d’Entreprises

Statutory auditor

represented by

/s/ Jos Briers

Réviseur d’Entreprises/Bedrijfsrevisor

Brussels, BELGIUM

June 26, 2009, except for Note 36, as to which the date is November 30, 2009

 

F-2


Table of Contents

Consolidated financial statements

Consolidated income statement

 

For the year ended 31 December

Million US dollar

   Notes      2008      2007      2006

Revenue

        23 507      19 735      16 692

Cost of sales

        (10 336)      (8 118)      (6 870)

Gross profit

        13 171      11 617      9 822

Distribution expenses

        (2 725)      (2 343)      (1 945)

Sales and marketing expenses

        (3 510)      (2 919)      (2 653)

Administrative expenses

        (1 478)      (1 354)      (1 348)

Other operating income/(expenses)

   7      440      360      167

Restructuring (including impairment losses)

   8      (457)      (59)      (174)

Fair value adjustments

   8      (43)      -      -

Business and asset disposal

   8      (38)      537      (24)

Disputes

   8      (20)      33      80

Profit from operations

        5 340      5 872      3 925

Finance cost

   11      (1 888)      (975)      (801)

Finance income

   11      288      157      208

Net finance cost

        (1 600)      (818)      (593)

Share of result of associates

        60      1      1

Profit before tax

        3 800      5 055      3 333

Income tax expense

   12      (674)      (888)      (666)

Profit

        3 126      4 167      2 667

Attributable to:

                 

Equity holders of AB InBev

        1 927      3 005      1 770

Minority interests

        1 199      1 162      897

Basic earnings per share 1

   24      1.93      3.08      1.82

Diluted earnings per share 1

   24      1.93      3.06      1.81

Consolidated statement of recognized income and expenses

 

For the year ended 31 December

Million US dollar

   Notes      2008      2007      2006
Exchange differences on translation of foreign operations gains/(losses)    11      (4 212)      2 055      1 189

Full recognition of actuarial gains and (losses)

        (372)      45      26

Cash flow hedges

   11      (2 308)      23      92

Net result recognized directly in equity

        (6 892)      2 123      1 307

Profit

        3 126      4 167      2 667

Total recognized income and expenses

        (3 766)      6 290      3 974

Attributable to:

                 

Equity holders of AB InBev

        (4 690)      5 065      3 030

Minority interests

        924      1 225      944

The accompanying notes are an integral part of these consolidated financial statements.

 

 

1 2006 and 2007 Basic and diluted earnings per share restated in accordance with IAS 33 (refer note 24 Earnings per share )

 

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Table of Contents

Consolidated balance sheet

 

As at 31 December

Million US dollar

   Notes      2008      2007

ASSETS

            

Non-current assets

            

Property, plant and equipment

   13      19 674      9 759

Goodwill

   14      49 556      20 365

Intangible assets

   15      23 673      1 840

Investments in associates

   16      6 868      46

Investment securities

   17      239      240

Deferred tax assets

   18      932      976

Employee benefits

   26      8      10

Trade and other receivables

   20      850      858
        101 800      34 094

Current assets

            

Investment securities

   17      270      264

Inventories

   19      2 903      1 647

Income tax receivable

        580      450

Trade and other receivables

   20      4 620      3 783

Cash and cash equivalents

   21      2 936      1 949

Assets held for sale

   22      51      60
        11 360      8 153

Total assets

        113 160      42 247

EQUITY AND LIABILITIES

            

Equity

            

Issued capital

   23      1 730      559

Share premium

   23      17 477      8 802

Reserves

   23      (3 247)      4 079

Retained earnings

   23      6 482      6 617

Equity attributable to equity holders of AB InBev

        22 442      20 057

Minority interests

   23      1 989      1 892
        24 431      21 949

Non-current liabilities

            

Interest-bearing loans and borrowings

   25      48 025      7 633

Employee benefits

   26      3 009      919

Deferred tax liabilities

   18      12 076      689

Trade and other payables

   29      399      462

Provisions

   28      796      754
        64 305      10 457

Current liabilities

            

Bank overdrafts

   21      765      118

Interest-bearing loans and borrowings

   25      11 301      2 117

Income tax payable

        405      839

Trade and other payables

   29      11 495      6 492

Provisions

   28      458      275
        24 424      9 841

Total equity and liabilities

        113 160      42 247

The accompanying notes are an integral part of these consolidated financial statements.

 

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Table of Contents

Consolidated cash flow statement

 

For the year ended 31 December

Million US dollar

   2008    2007    2006

OPERATING ACTIVITIES

        

Profit

   3 126    4 167    2 667

Depreciation, amortization and impairment

   1 912    1 408    1 371

Impairment losses on receivables, inventories and assets held for sale

   149    67    30

Additions/(reversals) in provisions and employee benefits

   572    186    217

Net finance cost

   1 600    818    593

Loss/(gain) on sale of property, plant and equipment and intangible assets

   (56)    (59)    (118)

Loss/(gain) on sale of subsidiaries and associates

   (4)    (484)    10

Loss/(gain) on sale of assets held for sale

   (29)    (16)    -

Equity-settled share-based payment expense

   63    72    61

Income tax expense

   674    888    666

Other non-cash items included in the profit

   (12)    41    29

Share of result of associates

   (60)    (1)    (1)
Cash flow from operating activities before changes in working capital and use of provisions    7 935    7 087    5 525

Decrease/(increase) in trade and other receivables

   201    (23)    (385)

Decrease/(increase) in inventories

   (388)    (94)    1

Increase/(decrease) in trade and other payables

   989    487    548

Pension contributions and use of provisions

   (490)    (496)    (552)

Cash generated from operations

   8 247    6 961    5 137

Interest paid

   (975)    (852)    (567)

Interest received

   126    60    69

Dividends received

   1    1    1

Income tax paid

   (1 241)    (613)    (518)

CASH FLOW FROM OPERATING ACTIVITIES

   6 158    5 557    4 122

INVESTING ACTIVITIES

        

Proceeds from sale of property, plant and equipment and of intangible assets

   228    193    203

Proceeds from sale of associates

   13    -    -

Sale of subsidiaries, net of cash disposed of

   47    577    3

Acquisition of subsidiaries, net of cash acquired

   (52 251)    (260)    (1 919)

Purchase of minority interests

   (853)    (1 576)    (928)

Acquisition of property, plant and equipment and of intangible assets

   (2 652)    (2 162)    (1 731)

Net proceeds/(acquisition) of other assets

   (38)    4    18

Net repayments/(payments) of loans granted

   3    (1)    (11)

CASH FLOW FROM INVESTING ACTIVITIES

   (55 503)    (3 225)    (4 365)

FINANCING ACTIVITIES

        

Net proceeds from the issue of share capital

   9 764    115    103

Net purchase of treasury shares

   (797)    (821)    (74)

Proceeds from borrowings

   56 425    8 950    8 064

Payments on borrowings

   (11 953)    (8 449)    (6 960)

Cash net finance costs other than interests

   (632)    (60)    (94)

Payment of finance lease liabilities

   (6)    (10)    (4)

Dividends paid

   (2 922)    (1 052)    (774)

CASH FLOW FROM FINANCING ACTIVITIES

   49 879    (1 327)    261

Net increase/(decrease) in cash and cash equivalents

   534    1 005    18

Cash and cash equivalents less bank overdrafts at beginning of year

   1 831    705    651

Effect of exchange rate fluctuations

   (194)    121    36

Cash and cash equivalents less bank overdrafts at end of year

   2 171    1 831    705

The accompanying notes are an integral part of these consolidated financial statements.

 

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Table of Contents

Notes to the consolidated financial statements

 

1  

Corporate information

   F-7
2  

Statement of compliance

   F-7
3  

Summary of significant accounting policies

   F-7
4  

Use of estimates and judgments

   F-21
5  

Segment reporting

   F-23
6  

Acquisitions and disposals of subsidiaries

   F-25
7  

Other operating income/(expenses)

   F-29
8  

Exceptional items

   F-29
9  

Payroll and related benefits

   F-30
10  

Additional information on operating expenses by nature

   F-31
11  

Finance cost and income

   F-31
12  

Income taxes

   F-34
13  

Property, plant and equipment

   F-35
14  

Goodwill

   F-36
15  

Intangible assets

   F-38
16  

Investment in associates

   F-39
17  

Investment securities

   F-40
18  

Deferred tax assets and liabilities

   F-40
19  

Inventories

   F-41
20  

Trade and other receivables

   F-41
21  

Cash and cash equivalents

   F-42
22  

Assets and liabilities held for sale

   F-42
23  

Changes in equity

   F-43
24  

Earnings per share

   F-46
25  

Interest-bearing loans and borrowings

   F-47
26  

Employee benefits

   F-48
27  

Share-based payments

   F-52
28  

Provisions

   F-54
29  

Trade and other payables

   F-55
30  

Risks arising from financial instruments

   F-56
31  

Operating leases

   F-68
32   Collateral and contractual commitments for the acquisition of property, plant and equipment, loans to customers and other    F-69
33  

Contingencies

   F-69
34  

Related parties

   F-71
35  

Events after the balance sheet date

   F-72
36  

Supplemental Guarantor Financial Information

   F-73
37  

AB InBev companies

   F-81

 

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Table of Contents
1. CORPORATE INFORMATION

AB InBev is a publicly traded company based in Leuven, Belgium. It is the leading global brewer and one of the world’s top five consumer products companies. A true consumer-centric, sales driven company, AB InBev manages a portfolio of nearly 300 brands that includes global flagship brands Budweiser ® , Stella Artois ® and Beck’s ® , fast growing multi-country brands like Leffe ® and Hoegaarden ® , and strong “local jewels” such as Bud Light ® , Skol ® , Brahma ® , Quilmes ® , Michelob ® , Harbin ® , Sedrin ® , Cass ® , Klinskoye ® , Sibirskaya Korona ® , Chernigivske ® , and Jupiler ® , among others. In addition, the company owns a 50 percent share in Grupo Modelo, Mexico’s leading brewer and owner of the global Corona ® brand. AB InBev’s dedication to heritage and quality is rooted in brewing traditions that originate from the Den Hoorn brewery in Leuven, Belgium, dating back to 1366 and the pioneering spirit of the Anheuser & Co brewery, established in 1860 in St. Louis, USA. Geographically diversified with a balanced exposure to developed and developing markets, AB InBev leverages the collective strengths of its 120 000 employees based in operations in over 30 countries across the world. The Company strives to be the Best Beer Company in a Better World. On a pro-forma basis for 2008, the combined company would have generated revenue of 39b US Dollar.

The consolidated financial statements of the company for the year ended 31 December 2008 comprise the company and its subsidiaries (together referred to as “AB InBev” or the “company”) and the company’s interest in associates and jointly controlled entities.

These financial statements were authorized for issue by the board of directors on 25 June 2009.

 

2. STATEMENT OF COMPLIANCE

The consolidated financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”) and in conformity with IFRS as adopted by the European Union (collectively “IFRS”). AB InBev has not applied early any new IFRS requirements that are not yet effective in 2008. Certain 2007 and 2006 amounts have been reclassified to conform to the 2008 presentation.

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

(A) BASIS OF PREPARATION AND MEASUREMENT

Depending on the applicable IFRS requirements, the measurement basis used in preparing the financial statements is cost, net realizable value, fair value or recoverable amount. Whenever IFRS provides an option between cost and another measurement basis (e.g. systematic re-measurement), the cost approach is applied.

 

(B) FUNCTIONAL AND PRESENTATION CURRENCY

Effective 1 January 2009, the company changed the presentation currency of the consolidated financial statements from the euro to the US dollar, reflecting the post-Anheuser-Busch acquisition profile of the company’s revenue and cash flows, which are now primarily generated in US dollars and US dollar-linked currencies. AB InBev believes that this change provides greater alignment of the presentation currency with AB InBev’s most significant operating currency and underlying financial performance. For comparability purposes, the company has restated the historical financial statements as of and for the years ended 31 December 2008 and 2007 and the three years ended 31 December 2008, from the euro to the US dollar. Unless otherwise specified, all financial information included in these financial statements have been stated in US dollars and has been rounded to the nearest million.

 

(C) USE OF ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

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Table of Contents

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

(D) PRINCIPLES OF CONSOLIDATION

Subsidiaries are those companies in which AB InBev, directly or indirectly, has an interest of more than half of the voting rights or, otherwise, has control, directly or indirectly, over the operations so as to govern the financial and operating policies in order to obtain benefits from the companies’ activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Control is presumed to exist where AB InBev owns, directly or indirectly, more than one half of the voting rights (which does not always equate to economic ownership), unless it can be demonstrated that such ownership does not constitute control. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Jointly controlled entities are those entities over whose activities AB InBev has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Jointly controlled entities are consolidated using the proportionate method of consolidation.

Associates are undertakings in which AB InBev has significant influence over the financial and operating policies, but which it does not control. This is generally evidenced by ownership of between 20% and 50% of the voting rights. In certain instances, the company may hold directly and indirectly an ownership interest of 50% or more in an entity, yet not have effective control. In these instances, such investments are accounted for as associates. Associates are accounted for by the equity method of accounting, from the date that significant influence commences until the date that significant influence ceases. When AB InBev’s share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that AB InBev has incurred obligations in respect of the associate.

The financial statements of the company’s subsidiaries, jointly controlled entities and associates are prepared for the same reporting year as the parent company, using consistent accounting policies. All intercompany transactions, balances and unrealized gains and losses on transactions between group companies have been eliminated.

Unrealized gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of AB InBev’s interest in the entity. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

A listing of the company’s most important subsidiaries and associates is set out in note 37 AB InBev companies .

 

(E) SUMMARY OF CHANGES IN ACCOUNTING POLICIES

All accounting policies were applied consistently with those of the previous financial year, unless disclosed otherwise.

 

(F) FOREIGN CURRENCIES

FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted for at exchange rates prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the balance sheet date rate. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to US dollar at foreign exchange rates ruling at the dates the fair value was determined.

TRANSLATION OF THE RESULTS AND FINANCIAL POSITION OF FOREIGN OPERATIONS

Assets and liabilities of foreign operations are translated to US dollar at foreign exchange rates prevailing at the balance sheet date. Income statements of foreign operations, excluding foreign entities in hyperinflationary economies, are translated to US dollar at exchange rates for the year approximating the foreign exchange rates prevailing at the dates of the transactions. The components of shareholders’ equity are translated at historical rates. Exchange differences arising from the translation of shareholders’ equity to US dollar at year-end exchange rates are taken to equity (translation reserves).

 

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Table of Contents

In hyperinflationary economies, re-measurement of the local currency denominated non-monetary assets, liabilities, income statement accounts as well as equity accounts is made by applying a general price index. These re-measured accounts are used for conversion into US dollar at the closing exchange rate. For subsidiaries and associated companies in countries with hyperinflation where a general price index method is not yet stabilized and does not provide reliable results, the balance sheet and income statement are re-measured into US dollar as if it was the operation’s functional currency. In 2008 and 2007, AB InBev had no operations in hyperinflationary economies.

EXCHANGE RATES

The most important exchange rates that have been used in preparing the financial statements are:

 

     Closing rate
1 US dollar equals:    2008    2007    2006

Argentinean peso

   3.449805    3.151000    3.069495

Brazilian real

   2.337001    1.771299    2.138003

Canadian dollar

   1.221383    0.981524    1.160289

Chinese yuan

   6.823021    7.304166    7.805074

Pound sterling

   0.684415    0.498166    0.509871

Russian ruble

   29.776885    24.409860    26.345408

South Korean won

   1320.856618    935.677686    930.515931

Ukrainian hryvnia

   7.800109    5.040043    5.049988

Euro

   0.718546    0.679302    0.759301

 

     Average rate
1 US dollar equals:    2008    2007    2006

Argentinean peso

   3.116907    3.122898    3.063697

Brazilian real

   1.778974    1.949520    2.181565

Canadian dollar

   1.047465    1.071595    1.128891

Chinese yuan

   7.007161    7.600559    8.018929

Pound sterling

   0.533130    0.500259    0.543991

Russian ruble

   24.626252    25.583940    27.182612

South Korean won

   1071.573693    925.555696    955.954436

Ukrainian hryvnia

   5.158557    5.035529    5.045860

Euro

   0.676163    0.731189    0.797266

 

(G) INTANGIBLE ASSETS

RESEARCH AND DEVELOPMENT

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in the income statement as an expense as incurred.

Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized if the product or process is technically and commercially feasible, future economic benefits are probable and the company has sufficient resources to complete development. The expenditure capitalized includes the cost of materials, direct labor and an appropriate proportion of overheads. Other development expenditure is recognized in the income statement as an expense as incurred. Capitalized development expenditure is stated at cost less accumulated amortization (see below) and impairment losses (refer accounting policy P).

Amortization related to research and development intangible assets is included within the cost of sales if production related and in sales and marketing if related to commercial activities.

SUPPLY AND DISTRIBUTION RIGHTS

A supply right is the right for AB InBev to supply a customer and the commitment by the customer to purchase from AB InBev. A distribution right is the right to sell specified products in a certain territory.

Acquired customer relationships in a business combination are initially recognized at fair value as supply rights to the extent that they arise from contractual rights. If the IFRS recognition criteria are not met, these relationships are subsumed under goodwill.

Acquired distribution rights are measured initially at cost or fair value when obtained through a business combination.

Amortization related to supply and distribution rights is included within sales and marketing expenses.

 

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BRANDS

If part of the consideration paid in a business combination relates to trademarks, trade names, formulas, recipes or technological expertise these intangible assets are considered as a group of complementary assets that is referred to as a brand for which one fair value is determined. Expenditure on internally generated brands is expensed as incurred.

SOFTWARE

Purchased software is measured at cost less accumulated amortization. Expenditure on internally developed software is capitalized when the expenditure qualifies as development activities; otherwise, it is recognized in the income statement when incurred.

Amortization related to software is included in cost of sales, distribution expenses, sales and marketing expenses or administrative expenses based on the activity the software supports.

OTHER INTANGIBLE ASSETS

Other intangible assets, acquired by the company, are stated at cost less accumulated amortization (see below) and impairment losses (refer accounting policy P).

SUBSEQUENT EXPENDITURE

Subsequent expenditure on capitalized intangible assets is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

AMORTIZATION

Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives. Licenses, brewing, supply and distribution rights are amortized over the period in which the rights exist. Brands are considered to have an indefinite life unless plans exist to discontinue the brand. Discontinuance of a brand can be either through sale or termination of marketing support. When AB InBev buys back distribution rights for its own products the life of these rights is considered indefinite, unless the company has a plan to discontinue the related brand or distribution. Software and capitalized development costs related to technology are amortized over 3 to 5 years.

Brands are deemed intangible assets with indefinite useful lives and, therefore, are not amortized but tested for impairment on an annual basis (refer accounting policy P).

GAINS AND LOSSES ON SALE

Net gains on sale of intangible assets are presented in the income statement as other operating income. Net losses on sale are included as other operating expenses. Net gains and losses are recognized in the income statement when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably, and there is no continuing managerial involvement with the intangible assets.

 

(H) BUSINESS COMBINATIONS

The company applies the purchase method of accounting to account for acquisitions of businesses. The cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, equity instruments issued and costs directly attributable to the acquisition. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date. The excess of the cost of the acquisition over the company’s interest in the fair value of the identifiable net assets acquired is recorded as goodwill.

The allocation of fair values to the identifiable assets acquired and liabilities assumed is based on various assumptions requiring management judgment.

 

(I) GOODWILL

Goodwill is determined as the excess of the cost of an acquisition over AB InBev’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiary, jointly controlled entity or associate recognized at the date of acquisition. All business combinations are accounted for by applying the purchase method. Business

 

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combinations entered into before 31 March 2004, were accounted for in accordance with IAS 22 Business Combinations . This means that acquired intangibles such as brands were subsumed under goodwill for those transactions. When AB InBev acquires minority interests any difference between the cost of acquisition and the minority interest’s share of net assets acquired is taken to goodwill.

In conformity with IFRS 3 Business Combinations , goodwill is stated at cost and not amortized but tested for impairment on an annual basis and whenever there is an indicator that the cash generating unit to which the goodwill has been allocated, may be impaired (refer accounting policy P).

Goodwill is expressed in the currency of the subsidiary or jointly controlled entity to which it relates (except for subsidiaries operating in highly inflationary economies) and is translated to US dollar using the year-end exchange rate.

In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associate.

If AB InBev’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognized exceeds the cost of the business combination such excess is recognized immediately in the income statement as required by IFRS 3.

Expenditure on internally generated goodwill is expensed as incurred.

 

(J) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses (refer accounting policy P). Cost includes the purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management (e.g. non refundable tax, transport and the costs of dismantling and removing the items and restoring the site on witch they are located, if applicable). The cost of a self-constructed asset is determined using the same principles as for an acquired asset. The depreciation methods, residual value, as well as the useful lives are reassessed, and adjusted if appropriate annually.

SUBSEQUENT EXPENDITURE

The company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the company and the cost of the item can be measured reliably. All other costs are expensed as incurred.

DEPRECIATION

The depreciable amount is the cost of an asset less its residual value. Residual values, if not insignificant, are reassessed annually. Depreciation is calculated from the date the asset is available for use, using the straight-line method over the estimated useful lives of the assets.

The estimated useful lives are as follows:

 

Industrial buildings

   20 years

Other real estate properties

   33 years

Production plant and equipment:

  

Production equipment

   15 years

Storage and packaging equipment

   7 years

Duo tanks

   7 years

Handling and other equipment

   5 years

Returnable packaging:

  

Kegs

   10 years

Crates

   10 years

Bottles

   5 years

Point of sale furniture and equipment

   5 years

Vehicles

   5 years

Information processing equipment

   3 or 5 years

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Land is not depreciated as it is deemed to have an indefinite life.

 

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GAINS AND LOSSES ON SALE

Net gains on sale of items of property, plant and equipment are presented in the income statement as other operating income. Net losses on sale are presented as other operating expenses Net gains and losses are recognized in the income statement when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably, and there is no continuing managerial involvement with the property, plant and equipment.

 

(K) ACCOUNTING FOR LEASES

Leases of property, plant and equipment where the company assumes substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognized as assets and liabilities (interest-bearing loans and borrowings) at amounts equal to the lower of the fair value of the leased property and the present value of the minimum lease payments at inception of the lease. Amortization and impairment testing for depreciable leased assets, is the same as for depreciable assets that are owned (refer accounting policy J and P).

Lease payments are apportioned between the outstanding liability and finance charges to achieve a constant periodic rate of interest on the remaining balance of the liability.

Leases of assets under which all the risks and rewards of ownership are substantially retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the term of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognized as an expense in the period in which termination takes place.

 

(L) INVESTMENTS

All investments are accounted for at trade date.

INVESTMENTS IN EQUITY SECURITIES

Investments in equity securities are undertakings in which AB InBev does not have significant influence or control. This is generally evidenced by ownership of less than 20% of the voting rights. Such investments are designated as available-for-sale financial assets which are at initial recognition measured at fair value unless the fair value cannot be reliably determined in which case they are measured at cost. Subsequent changes in fair value, except those related to impairment losses which are recognized in the income statement, are recognized directly in equity.

On disposal of an investment, the cumulative gain or loss previously recognized directly in equity is recognized in profit or loss.

INVESTMENTS IN DEBT SECURITIES

Investments in debt securities classified as trading or as being available-for-sale are carried at fair value, with any resulting gain or loss respectively recognized in the income statement or directly in equity. Fair value of these investments is determined as the quoted bid price at the balance sheet date. Impairment charges and foreign exchange gains and losses are recognized in the income statement.

Investments in debt securities classified as held to maturity are measured at amortized cost.

OTHER INVESTMENTS

Other investments held by the company, are classified as available-for-sale and are carried at fair value, with any resulting gain or loss recognized directly in equity. Impairment charges are recognized in the income statement.

 

(M) INVENTORIES

Inventories are valued at the lower of cost and net realizable value. Cost includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. The weighted average method is used in assigning the cost of inventories.

The cost of finished products and work in progress comprises raw materials, other production materials, direct labor, other direct cost and an allocation of fixed and variable overhead based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated completion and selling costs.

 

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(N) TRADE AND OTHER RECEIVABLES

Trade and other receivables are carried at amortized cost less impairment losses. An estimate is made for doubtful receivables based on a review of all outstanding amounts at the balance sheet date.

An allowance for impairment of trade and other receivables is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of the estimated future cash flows. An impairment loss is recognized in the statement of income, as are subsequent recoveries of previous impairments.

 

(O) CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all cash balances and short-term highly liquid investments with a maturity of three months or less from the date of acquisition that are readily convertible into cash. They are stated at face value, which approximates their fair value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts.

 

(P) IMPAIRMENT

The carrying amounts of financial assets, property, plant and equipment, goodwill and intangible assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. In addition, goodwill, intangible assets that are not yet available for use and intangibles with an indefinite life are tested for impairment annually. An impairment loss is recognized whenever the carrying amount of an asset or the related cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement.

CALCULATION OF RECOVERABLE AMOUNT

The recoverable amount of the company’s investments in unquoted debt securities is calculated as the present value of expected future cash flows, discounted at the debt securities’ original effective interest rate. For equity and quoted debt securities the recoverable amount is their fair value.

The recoverable amount of other assets is determined as the higher of their fair value less costs to sell and value in use. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

Impairment testing of intangible assets with an indefinite useful life is primarily based on a fair value approach applying multiples that reflect current market transactions to indicators that drive the profitability of the asset or the royalty stream that could be obtained from licensing the intangible asset to another party in an arm’s length transaction.

For goodwill, the recoverable amount of the cash generating units to which the goodwill belongs is based on a fair value approach. More specifically, a discounted free cash flow approach, based on current acquisition valuation models, is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators. As regards the level of goodwill impairment testing, AB InBev’s overall approach is to test goodwill for impairment at the business unit level (i.e. one level below the segments).

REVERSAL OF IMPAIRMENT LOSSES

An impairment loss in respect of goodwill or investments in equity securities is not reversed. Impairment losses on other assets are reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

 

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(Q) SHARE CAPITAL

REPURCHASE OF SHARE CAPITAL

When AB InBev buys back its own shares, the amount of the consideration paid, including directly attributable costs, is recognized as a deduction from equity under treasury shares.

DIVIDENDS

Dividends are recognized as a liability in the period in which they are declared.

SHARE ISSUANCE COSTS

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 

(R) PROVISIONS

Provisions are recognized when (i) the company has a present legal or constructive obligation as a result of past events, (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and (iii) a reliable estimate of the amount of the obligation can be made. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

RESTRUCTURING

A provision for restructuring is recognized when the company has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Costs relating to the ongoing activities of the company are not provided for. The provision includes the benefit commitments in connection with early retirement and redundancy schemes.

ONEROUS CONTRACTS

A provision for onerous contracts is recognized when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. Such provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

DISPUTES AND LITIGATION

A provision for disputes and litigation is recognized when it is more likely than not that the company will be required to make future payments as a result of past events, such items may include but are not limited to, several claims, suits and actions both initiated by third parties and initiated by AB InBev relating to antitrust laws, violations of distribution and license agreements, environmental matters, employment related disputes, claims from tax authorities, and alcohol industry litigation matters.

 

(S) EMPLOYEE BENEFITS

POST-EMPLOYMENT BENEFITS

Post-employment benefits include pensions, post-employment life insurance and medical care benefits. The company operates a number of defined benefit and defined contribution plans throughout the world, the assets of which are generally held in separate trustee-administered funds. The pension plans are generally funded by payments from employees and the company, taking account of the recommendations of independent actuaries. AB InBev maintains funded and unfunded pension plans.

a) Defined contribution plans

Contributions to defined contribution plans are recognized as an expense in the income statement when incurred. A defined contribution plan is a pension plan under which AB InBev pays fixed contributions into a fund. AB InBev has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

b) Defined benefit plans

A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. For defined benefit plans, the pension expenses are assessed separately for each plan using

 

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the projected unit credit method. The projected unit credit method considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately. Under this method, the cost of providing pensions is charged to the income statement to spread the regular cost over the service lives of employees in accordance with the advice of qualified actuaries who carry out a full valuation of the plans at least annually. The amounts charged to the income statement consist of current service cost, interest cost, the expected return on any plan assets, past service costs and the effect of any curtailments or settlements. The pension obligations recognized in the balance sheet are measured at the present value of the estimated future cash outflows using interest rates of high quality corporate bonds, which have terms to maturity approximating the terms of the related liability, less any past service costs not yet recognized and the fair value of any plan assets. Past service costs result from the introduction of, or changes to, post-employment benefits. They are recognized as an expense over the average period that the benefits vest. Actuarial gains and losses comprise the effects of differences between the previous actuarial assumptions and what has actually occurred and the effects of changes in actuarial assumptions. Actuarial gains and losses are recognized in full in the period in which they occur in the statement of recognized income and expenses.

Where the calculated amount of a defined benefit liability is negative (an asset), AB InBev recognizes such pension asset to the extent of any cumulative unrecognized past service costs plus any economic benefits available to AB InBev either from refunds or reductions in future contributions.

OTHER POST-EMPLOYMENT OBLIGATIONS

Some AB InBev companies provide post-employment healthcare benefits to their retirees. The entitlement to these benefits is usually based on the employee remaining in service up to retirement age. The expected costs of these benefits are accrued over the period of employment, using an accounting methodology similar to that for defined benefit pension plans.

TERMINATION BENEFITS

Termination benefits are recognized as an expense when the company is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date. Termination benefits for voluntary redundancies are recognized if the company has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.

BONUSES

Bonuses received by company employees and management are based on financial key indicators. The estimated amount of the bonus is recognized as an expense in the period the bonus is earned. To the extent that bonuses are settled in shares of the company, they are accounted for as share-based payments.

 

(T) SHARE-BASED PAYMENTS

Different share and share option programs allow company senior management and members of the board to acquire shares of the company and some of its affiliates. AB InBev adopted IFRS 2 Share-based Payment on 1 January 2005 to all awards granted after 7 November 2002 that had not yet vested at 1 January 2005. The fair value of the share options is estimated at grant date, using an option pricing model that is most appropriate for the respective option. Based on the expected number of options that will vest, the fair value of the options granted is expensed over the vesting period. When the options are exercised, equity is increased by the amount of the proceeds received.

 

(U) INTEREST-BEARING LOANS AND BORROWINGS

Interest-bearing loans and borrowings are recognized initially at fair value, less attributable transaction costs. Subsequent to initial recognition, interest-bearing loans and borrowings are stated at amortized cost with any difference between the initial amount and the maturity amount being recognized in the income statement (in accretion expense) over the expected life of the instrument on an effective interest rate basis.

 

(V) TRADE AND OTHER PAYABLES

Trade and other payables are stated at amortized cost.

 

(W) INCOME TAX

Income tax on the profit for the year comprises current and deferred tax. Income tax is recognized in the income statement except to the extent that it relates to items recognized directly in equity, in which case the tax effect is also recognized directly in equity.

 

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Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted, at the balance sheet date, and any adjustment to tax payable in respect of previous years.

In accordance with IAS 12 Income Taxes, deferred taxes are provided using the so-called balance sheet liability method. This means that, taking into account the IAS 12 requirements, for all taxable and deductible differences between the tax bases of assets and liabilities and their carrying amounts in the balance sheet a deferred tax liability or asset is recognized. Under this method, a provision for deferred taxes is also made for differences between the fair values of assets and liabilities acquired in a business combination and their tax base. IAS 12 prescribes that no deferred taxes are recognized i) on initial recognition of goodwill, ii) at the initial recognition of assets or liabilities in a transaction that is not a business combination and affects neither accounting nor taxable profit and iii) on differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using currently or substantively enacted tax rates.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously.

The company recognizes deferred tax assets, including assets arising from losses carried forward, to the extent that future probable taxable profit will be available against which the deferred tax asset can be utilized. A deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Tax claims are recorded within provisions on the balance sheet (refer accounting policy R).

 

(X) INCOME RECOGNITION

Income is recognized when it is probable that the economic benefits associated with the transaction will flow to the company and the income can be measured reliably.

GOODS SOLD

In relation to the sale of beverages and packaging , revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, and no significant uncertainties remain regarding recovery of the consideration due, associated costs or the possible return of goods, and there is no continuing management involvement with the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts, volume rebates and discounts for cash payments.

ENTERTAINMENT REVENUE

Revenues at our theme parks are recognized upon admission to a park or when products are delivered to customers. For season pass and other multi-use admissions, AB InBev recognizes a pro-rata portion of the revenue over the year based on the terms of the admission product.

RENTAL AND ROYALTY INCOME

Rental income is recognized under other operating income on a straight-line basis over the term of the lease. Royalties arising from the use by others of the company’s resources are recognized in other operating income on an accrual basis in accordance with the substance of the relevant agreement.

GOVERNMENT GRANTS

A government grant is recognized in the balance sheet initially as deferred income when there is reasonable assurance that it will be received and that the company will comply with the conditions attached to it. Grants that compensate the company for expenses incurred are recognized as other operating income on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the company for the acquisition of an asset are presented by deducting them from the acquisition cost of the related asset in accordance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance .

FINANCE INCOME

Finance income comprises interest received or receivable on funds invested, dividend income, foreign exchange gains, losses on currency hedging instruments offsetting currency gains, gains on hedging instruments that are not part of a hedge accounting relationship, gains on financial assets classified as trading as well as any gains from hedge ineffectiveness (refer accounting policy W).

 

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Interest income is recognized as it accrues (taking into account the effective yield on the asset) unless collectability is in doubt. Dividend income is recognized in the income statement on the date that the dividend is declared.

 

(Y) EXPENSES

FINANCE COSTS

Finance costs comprise interest payable on borrowings, calculated using the effective interest rate method, foreign exchange losses, gains on currency hedging instruments offsetting currency losses, results on interest rate hedging instruments, losses on hedging instruments that are not part of a hedge accounting relationship, losses on financial assets classified as trading, impairment losses on available-for-sale financial assets as well as any losses from hedge ineffectiveness (refer accounting policy Z).

All interest costs incurred in connection with borrowings or financial transactions are expensed as incurred as part of finance costs. Any difference between the initial amount and the maturity amount of interest bearing loans and borrowings, such as transaction costs and fair value adjustments, are being recognized in the income statement (in accretion expense) over the expected life of the instrument on an effective interest rate basis (refer accounting policy U). The interest expense component of finance lease payments is also recognized in the income statement using the effective interest rate method.

RESEARCH AND DEVELOPMENT, ADVERTISING AND PROMOTIONAL COSTS AND SYSTEMS DEVELOPMENT COSTS

Research, advertising and promotional costs are expensed in the year in which these costs are incurred. Development costs and systems development costs are expensed in the year in which these costs are incurred if they do not meet the criteria for capitalization (refer accounting policy G).

PURCHASING, RECEIVING AND WAREHOUSING COSTS

Purchasing and receiving costs are included in the cost of sales, as well as the costs of storing and moving raw materials and packaging materials. The costs of storing finished products at the brewery as well as costs incurred for subsequent storage in distribution centers are included within distribution expenses.

 

(Z) DERIVATIVE FINANCIAL INSTRUMENTS

AB InBev uses derivative financial instruments to mitigate the transactional impact of foreign currencies, interest rates and commodity prices on the company’s performance. AB InBev’s financial risk management policy prohibits the use of derivative financial instruments for trading purposes and the company does therefore not hold or issue any such instruments for such purposes. Derivative financial instruments that are economic hedges but that do not meet the strict IAS 39 Financial Instruments: Recognition and Measurement hedge accounting rules, however, are accounted for as financial assets or liabilities at fair value through profit or loss.

Derivative financial instruments are recognized initially at fair value. Fair value is the amount for which the asset could be exchanged or the liability settled, between knowledgeable, willing parties in an arm’s length transaction. The fair value of derivative financial instruments either is the quoted market price or is calculated using pricing models taking into account current market rates. These pricing models also take into account the current creditworthiness of the counterparties.

Subsequent to initial recognition, derivative financial instruments are re-measured to their fair value at balance sheet date. Depending on whether cash flow or net investment hedge accounting is applied or not, any gain or loss is recognized either directly in equity or in the income statement.

Cash flow, fair value or net investment hedge accounting is applied to all hedges that qualify for hedge accounting when the required hedge documentation is in place and when the hedge relation is determined to be effective.

CASH FLOW HEDGE ACCOUNTING

When a derivative financial instrument hedges the variability in cash flows of a recognized asset or liability, the foreign currency risk of a firm commitment or a highly probable forecasted transaction, the effective part of any resulting gain or loss on the derivative financial instrument is recognized directly in equity (hedging reserves). When the firm commitment in foreign currency or the forecasted transaction results in the recognition of a non financial asset or a non financial liability, the cumulative gain or loss is removed from equity and included in the initial measurement of the asset or liability. When the hedge relates to financial assets or liabilities, the cumulative gain or loss on the hedging instrument is reclassified from equity

 

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into the income statement in the same period during which the hedged risk affects the income statement (e.g. when the variable interest expense is recognized). The ineffective part of any gain or loss is recognized immediately in the income statement.

When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to occur, the cumulative gain or loss (at that point) remains in equity and is reclassified in accordance with the above policy when the hedged transaction occurs. If the hedged transaction is no longer probable, the cumulative gain or loss recognized in equity is reclassified into the income statement immediately.

FAIR VALUE HEDGE ACCOUNTING

When a derivative financial instrument hedges the variability in fair value of a recognized asset or liability, any resulting gain or loss on the hedging instrument is recognized in the income statement. The hedged item is also stated at fair value in respect of the risk being hedged, with any gain or loss being recognized in the income statement.

NET INVESTMENT HEDGE ACCOUNTING

When a foreign currency liability hedges a net investment in a foreign operation, exchange differences arising on the translation of the liability to the functional currency are recognized directly in equity (translation reserves).

When a derivative financial instrument hedges a net investment in a foreign operation, the portion of the gain or the loss on the hedging instrument that is determined to be an effective hedge is recognized directly in equity (translation reserves), while the ineffective portion is reported in the income statement.

Investments in equity instruments or derivatives linked to and to be settled by delivery of an equity instrument are stated at cost when such equity instrument does not have a quoted market price in an active market and for which other methods of reasonably estimating fair value are clearly inappropriate or unworkable.

 

(AA) SEGMENT REPORTING

Operating segments are components of the company’s business activities about which separate financial information is available that is evaluated regularly by management.

AB InBev’s primary segment reporting format is geographical because the company’s risks and rates of return are affected predominantly by the fact that AB InBev operates in different geographical areas. The company’s management structure and internal reporting system to the board of directors is set up accordingly. A geographical segment is a distinguishable component of the company that is engaged in providing products or services within a particular economic environment, which is subject to risks and returns that are different from those of other segments. In accordance with IAS 14 Segment Reporting AB InBev’s reportable geographical segments were determined as North America, Latin America North, Latin America South, Western Europe, Central and Eastern Europe, Asia Pacific and Global Export and Holding Companies. The company’s assets are predominantly located in the same geographical areas as its customers.

Throughout the world, AB InBev is chiefly active in the malt-based beverages business. The non-beer segment consists of AB InBev owned non-beer, soft drinks produced, all other beverages sold by AB InBev under licensing or distribution agreements and the entertainment and packaging business.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated assets comprise interest bearing loans granted, investment securities, deferred tax assets, income taxes receivable, cash and cash equivalent and derivative assets. Unallocated liabilities comprise equity and minority interest, interest bearing loans, deferred tax liabilities, bank overdrafts, income taxes payable and derivative liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

 

(BB) EXCEPTIONAL ITEMS

Exceptional items are those that in management’s judgment need to be disclosed by virtue of their size or incidence. Such items are disclosed on the face of the consolidated income statement or separately disclosed in the notes to the financial statements. Transactions which may give rise to exceptional items are principally restructuring activities, impairments, and gains or losses on disposal of investments.

 

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(CC) DISCONTINUED OPERATIONS AND NON-CURRENT ASSETS HELD FOR SALE

A discontinued operation is a component of the company that either has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations and is part of a single co-coordinated plan to dispose of or is a subsidiary acquired exclusively with a view to resale.

AB InBev classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use if all of the conditions of IFRS 5 Non-current assets held for sale and discontinued operations are met. A disposal group is defined as a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred. Immediately before classification as held for sale, the company measures the carrying amount of the asset (or all the assets and liabilities in the disposal group) in accordance with applicable IFRS. Then, on initial classification as held for sale, non-current assets and disposal groups are recognized at the lower of carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale are included in profit or loss. The same applies to gains and losses on subsequent re-measurement. Non-current assets classified as held for sale are no longer depreciated or amortized.

 

(DD) RECENTLY ISSUED IFRS

To the extent that new IFRS requirements are expected to be applicable in the future, they have been summarized hereafter. For the year ended 31 December 2008, they have not been applied in preparing these consolidated financial statements.

IFRS 8 Operating segments

IFRS 8 Operating Segments introduces the “management approach” to segment reporting. IFRS 8, which becomes mandatory for AB InBev’s 2009 financial statements, will require the disclosure of segment information based on the internal reports regularly reviewed by AB InBev’s Chief Operating Decision Makers in order to assess each segment’s performance and to allocate resources to them. Currently AB InBev presents segment information in respect of its geographical and business segments. The company does not expect that IFRS 8 will trigger a material change to the current segment reporting.

Revised IAS 23 Borrowing Costs

Revised IAS 23 Borrowing Costs removes the option to expense borrowing costs and requires that an entity capitalize borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The revised IAS 23 will become mandatory for AB InBev’s 2009 financial statements and will constitute a change in accounting policy for AB InBev. In accordance with the transitional provisions, AB InBev will apply the revised IAS 23 to qualifying assets for which capitalization of borrowing costs commences on or after the effective date of the standard. The company does not expect a material impact on the consolidated financial statements.

IFRIC 13 Customer Loyalty Programs

IFRIC 13 Customer Loyalty Programs addresses the accounting by entities that operate, or otherwise participate in, customer loyalty programs for their customers. It relates to customer loyalty programs under which the customer can redeem credits for awards such as free or discounted goods or services. IFRIC 13, which becomes mandatory for AB InBev’s 2009 financial statements, is not expected to have a material impact on the consolidated financial statements.

Revised IAS 1 Presentation of Financial Statements (2007)

Revised IAS 1 Presentation of Financial Statements (2007)  introduces the term total comprehensive income, which represents changes in equity during a period other than those changes resulting from transactions with owners in their capacity as owners. Total comprehensive income may be presented in either a single statement of comprehensive income (effectively combining both the income statement and all non-owner changes in equity in a single statement), or in an income statement and a separate statement of comprehensive income. Revised IAS 1, which becomes mandatory for AB InBev’s 2009 consolidated financial statements, is not expected to have an impact on the presentation of the consolidated financial statements. AB InBev plans to continue to provide total comprehensive income in an income statement and a separate single statement of other comprehensive income for its 2009 consolidated financial statements.

Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation

Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation requires puttable instruments, and instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation, to be

 

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classified as equity if certain conditions are met. The amendments, which become mandatory for AB InBev’s 2009 consolidated financial statements, with retrospective application required, are not expected to have a material impact on the consolidated financial statements.

Revised IFRS 3 Business Combinations (2008)

Revised IFRS 3 Business Combinations (2008)  incorporates the following changes that are likely to be relevant to AB InBev’s operations:

 

   

The definition of a business has been broadened, which is likely to result in more acquisitions being treated as business combinations.

 

   

Contingent consideration will be measured at fair value, with subsequent changes therein recognized in profit or loss.

 

   

Transaction costs, other than share and debt issue costs, will be expensed as incurred.

 

   

Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognized in profit or loss.

 

   

Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis.

Revised IFRS 3, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, will be applied prospectively and therefore there will be no impact on prior periods in AB InBev’s 2010 consolidated financial statements.

Amended IAS 27 Consolidated and Separate Financial Statements (2008)

Amended IAS 27 Consolidated and Separate Financial Statements (2008)  requires accounting for changes in ownership interests by AB InBev in a subsidiary, while maintaining control, to be recognized as an equity transaction. When AB InBev loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognized in profit or loss. The amendments to IAS 27, which become mandatory for AB InBev’s 2010 consolidated financial statements, are not expected to have a material impact on the consolidated financial statements.

Amendment to IFRS 2 Share-based Payment – Vesting Conditions and Cancellations

Amendment to IFRS 2 Share-based Payment – Vesting Conditions and Cancellations clarifies the definition of vesting conditions, introduces the concept of non-vesting conditions, requires non-vesting conditions to be reflected in grant-date fair value and provides the accounting treatment for non-vesting conditions and cancellations. The amendments to IFRS 2, that will become mandatory for AB InBev’s 2009 consolidated financial statements, with retrospective application, are not expected to have a material impact on the consolidated financial statements.

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 15 Agreements for the Construction of Real Estate concludes that revenues for real estate construction projects will have to be recognized using the completed contract method in many cases, except for specific situations where the percentage of completion method of revenue recognition can be applied. This is the case when a contract relates to the sale of assets, but during the construction of these assets revenue recognition criteria are met on a continuous basis (in relation to the completed part of the project). IFRIC 15, which becomes mandatory for AB InBev’s 2009 consolidated financial statements, with retrospective application, is not expected to have a material impact on the consolidated financial statements.

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 16 Hedges of a Net Investment in a Foreign Operation discusses a number of issues in relation to hedging currency risks on foreign operations (net investment hedges). IFRIC 16 specifically confirms only the risk from differences between the functional currencies of the parent and the subsidiary can be hedged. Additionally, currency risks can only be hedged by every (direct or indirect) parent company, as long as the risk is only hedged once in the consolidated financial statements. IFRIC 16 also determines the hedge instrument of a net investment hedge can be held by every group company, except for foreign operation itself. IFRIC 16, which becomes mandatory for AB InBev’s 2009 consolidated financial statements, with prospective application, is not expected to have a material impact on the consolidated financial statements.

IFRIC 17 Distributions of Non-cash Assets to Owners

IFRIC 17 Distributions of Non-cash Assets to Owners addresses the treatment of distributions in kind to shareholders. Outside the scope of IFRIC 17 are distributions in which the assets being distributed are ultimately controlled by the same party or

 

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parties before and after the distribution (common control transactions). A liability has to be recognized when the dividend has been appropriately authorized and is no longer at the discretion of the entity, to be measured at the fair value of the non-cash assets to be distributed. IFRIC 17, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, with prospective application, is not expected to have a material impact on the consolidated financial statements.

IFRIC 18 Transfers of Assets from Customers

IFRIC 18 Transfers of Assets from Customers addresses the accounting by access providers for property, plant and equipment contributed to them by customers. Recognition of the assets depends on who controls it. When the asset is recognized by the access provider, it is measured at fair value upon initial recognition. The timing of the recognition of the corresponding revenue depends on the facts and circumstances. IFRIC 18, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, with prospective application, is not expected to have a material impact on the consolidated financial statements.

Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 27 Consolidated and Separate Financial Statements - Cost of an Investment in a Subsidiary, Jointly-controlled Entity or Associate

Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 27 Consolidated and Separate Financial Statements - Cost of an Investment in a Subsidiary, Jointly-controlled Entity or Associate revises, amongst others, the accounting for ‘pre-acquisition dividends’ received from participating interests. Those dividends should be recognized as revenue, but such dividends may imply an indicator for the impairment of the participating interest. The amendment, which becomes mandatory for AB InBev’s 2009 consolidated financial statements, with prospective application, is not expected to have a material impact on the consolidated financial statements.

Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items

Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items provides additional guidance concerning specific positions that qualify for hedging (“eligible hedged items”). The amendment to IAS 39, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, with retrospective application, is not expected to have a material impact the consolidated financial statements.

Improvements to IFRSs (2008)

Improvements to IFRSs (2008) is a collection of minor improvements to existing standards. This collection, which becomes mandatory for AB InBev’s 2009 consolidated financial statements, is not expected to have a material impact on the consolidated financial statements.

Improvements to IFRSs (2009)

Improvements to IFRSs (2009) is a collection of minor improvements to existing standards. This collection, which has various adoption dates, is not expected to have a material impact on the consolidated financial statements.

 

4. USE OF ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Although each of its significant accounting policies reflects judgments, assessments or estimates, AB InBev believes that the following accounting policies reflect the most critical judgments, estimates and assumptions that are important to its business operations and the understanding of its results: business combinations intangible assets, goodwill, impairment, provisions, share-based payments, employee benefits and accounting for current and deferred tax.

The fair values of acquired identifiable intangibles are based on an assessment of future cash flows. Impairment analyses of goodwill and indefinite-lived intangible assets are performed annually and whenever a triggering event has occurred, in order to determine whether the carrying value exceeds the recoverable amount. These calculations are based on estimates of future cash flows.

 

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The company uses its judgment to select a variety of methods including the discounted cash flow method and option valuation models and make assumptions about the fair value of financial instruments that are mainly based on market conditions existing at each balance sheet date.

Actuarial assumptions are established to anticipate future events and are used in calculating pension and other postretirement benefit expense and liability. These factors include assumptions with respect to interest rates, expected investment returns on plan assets, rates of increase in health care costs, rates of future compensation increases, turnover rates, and life expectancy.

Judgments made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are further discussed in the relevant notes hereafter.

 

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5. SEGMENT REPORTING

PRIMARY SEGMENTS

Million US dollar, except volume (million hl) and full time equivalents (FTE in units).

Segment information is presented by geographical segments, consistent with AB InBev’s management and internal reporting structure. AB InBev operates its business through seven regions. Regional and operating company management is responsible for managing performance, underlying risks, and effectiveness of operations. Internally, AB InBev management use performance indicators such as normalized profit and normalized EBITDA as measures of segment performance and to make decisions regarding allocation of resources. These measures are reconciled to segment profit in the tables presented.

 

    

North

America

  

Latin

America

North

  

Latin

America

South

  

Western

Europe

     2008    2007    2006    2008    2007    2006    2008    2007    2006    2008    2007    2006

Volume

   27    13    14    102    101    95    34    31    23    34    36    39

Revenue

   3 753    2 139    2 296    7 664    6 707    5 353    1 855    1 372    919    4 754    4 725    4 573

Cost of goods sold

   (1 586)    (672)    (853)    (2 634)    (2 274)    (1 869)    (782)    (581)    (393)    (2 232)    (2 210)    (2 031)

Distribution expenses

   (499)    (376)    (339)    (916)    (756)    (626)    (145)    (112)    (70)    (592)    (551)    (522)

Sales and marketing expenses

   (430)    (282)    (390)    (837)    (672)    (554)    (191)    (161)    (112)    (943)    (914)    (903)

Administrative expenses

   (155)    (114)    (130)    (418)    (352)    (340)    (72)    (60)    (64)    (345)    (321)    (330)

Other operating income/(expenses)

   (4)    4    (8)    208    166    76    11    (15)    (11)    (144)    (96)    (135)

Normalized profit from operations (EBIT)

   1 079    699    576    3 067    2 819    2 040    676    443    269    498    633    652

Exceptional items (refer note 8)

   (220)    19    (5)    (27)    21    77    (4)    (3)    5    (275)    475    (174)

Profit from operations (EBIT)

   859    718    571    3 040    2 840    2 117    672    440    274    223    1 108    478

Net finance cost

   (97)    (66)    (70)    (590)    (505)    (347)    (43)    (26)    (28)    (504)    (393)    (262)

Share of result of associates

   57    -    1    -    -    (1)    1    2    1    -    (1)    -

Profit before tax

   819    652    502    2 450    2 335    1 769    630    416    247    (281)    714    216

Income tax expense

   (151)    (172)    (182)    (303)    (267)    (177)    (189)    (124)    (75)    130    (118)    (93)

Profit

   668    480    320    2 147    2 068    1 592    441    292    172    (151)    596    123

Normalized profit

   803    469    324    2 163    2 057    1 539    445    290    167    81    148    273

Exceptional items

   (220)    19    (5)    (27)    21    77    (4)    (3)    5    (275)    475    (174)

Exceptional finance costs

   -    -    -    -    -    -    -    -    -    -    -    -

Taxes on exceptional items

   85    (8)    1    11    (10)    (24)    -    5    -    43    (27)    24

Profit

   668    480    320    2 147    2 068    1 592    441    292    172    (151)    596    123

Normalized EBITDA

   1 308    816    694    3 540    3 171    2 344    808    554    349    948    1 054    1 048

Exceptional items

   (220)    3    22    (27)    19    76    (4)    (3)    9    (275)    436    (99)

Depreciation, amortization and impairment expense

   (229)    (101)    (145)    (473)    (350)    (303)    (132)    (111)    (84)    (450)    (382)    (471)

Net finance costs

   (97)    (66)    (70)    (590)    (505)    (347)    (43)    (26)    (28)    (504)    (393)    (262)

Share of results of associates

   57    -    1    -    -    (1)    1    2    1    -    (1)    -

Income tax expense

   (151)    (172)    (182)    (303)    (267)    (177)    (189)    (124)    (75)    130    (118)    (93)

Profit

   668    480    320    2 147    2 068    1 592    441    292    172    (151)    596    123

Normalized EBITDA margin in %

   34.9%    38.1%    30.2%    46.2%    47.3%    43.8%    43.6%    40.4%    38.0%    19.9%    22.3%    22.9%

Segment assets

   69 633    3 343    3 073    12 052    14 808    10 959    3 841    3 515    3 167    6 169    6 775    6 464

Intersegment elimination

                                   

Non-segmented assets

                                                           

Total assets

                                   

Segment liabilities

   6 075    1 088    969    2 470    3 147    1 924    763    558    370    2 577    2 773    2 741

Intersegment elimination

                                   

Non-segmented liabilities

                                                           

Total liabilities

                                   

Gross capex

   318    101    95    615    502    416    285    181    147    537    502    416

Impairment losses/(reversals)

   1    (16)    28    55    4    (1)    -    -    -    8    (37)    77

Depreciation & amortization

   230    118    117    418    345    304    132    112    84    441    420    394

Additions to/(reversals of) provisions

   157    1    60    88    41    (38)    6    16    1    142    31    112

FTE

   22 892    5 662    6 337    28 517    25 998    24 872    7 554    7 290    5 306    10 298    11 481    12 122

 

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Central and

Eastern Europe

  

Asia

Pacific

  

Global Export

and Holding

Companies

   Consolidated
     2008    2007    2006    2008    2007    2006    2008    2007    2006    2008    2007    2006

Volume

   46    49    43    37    36    31    5    5    2    285    271    247

Revenue

   3 267    3 006    2 283    1 494    1 359    1 144    720    427    124    23 507    19 735    16 692

Cost of goods sold

   (1 693)    (1 385)    (1 054)    (812)    (677)    (586)    (597)    (319)    (84)    (10 336)    (8 118)    (6 870)

Distribution expenses

   (410)    (399)    (304)    (99)    (93)    (83)    (64)    (56)    (1)    (2 725)    (2 343)    (1 945)

Sales and marketing expenses

   (660)    (536)    (391)    (333)    (283)    (218)    (116)    (71)    (85)    (3 510)    (2 919)    (2 653)

Administrative expenses

   (176)    (179)    (176)    (101)    (83)    (68)    (211)    (245)    (240)    (1 478)    (1 354)    (1 348)

Other operating income/(expenses)

   (132)    (94)    (100)    26    -    (1)    475    395    346    440    360    167

Normalized profit from operations (EBIT)

   196    413    258    175    223    188    207    131    60    5 898    5 361    4 043

Exceptional items (refer note 8)

   (10)    (21)    (3)    (22)    4    (9)    -    16    (9)    (558)    511    (118)

Profit from operations (EBIT)

   186    392    255    153    227    179    207    147    51    5 340    5 872    3 925

Net finance cost

   (97)    (60)    (46)    (9)    (5)    (16)    (260)    237    176    (1 600)    (818)    (593)

Share of result of associates

   1    -    -    -    -    -    1    -    -    60    1    1

Profit before tax

   90    332    209    144    222    163    (52)    384    227    3 800    5 055    3 333

Income tax expense

   (42)    (85)    (50)    (72)    (52)    (41)    (47)    (70)    (48)    (674)    (888)    (666)

Profit

   48    247    159    72    170    122    (99)    314    179    3 126    4 167    2 667

Normalized profit

   56    267    162    93    171    132    85    300    188    3 726    3702    2 785

Exceptional items

   (10)    (21)    (3)    (22)    4    (9)    -    16    (9)    (558)    511    (118)

Exceptional finance costs

   -    -    -    -    -    -    (187)    -    -    (187)    -    -

Taxes on exceptional items

   2    1    -    1    (5)    (1)    3    (2)    -    145    (46)    -

Profit

   48    247    159    72    170    122    (99)    314    179    3 126    4 167    2 667

Normalized EBITDA

   571    711    498    341    360    301    295    160    79    7 811    6 826    5 313

Exceptional items

   (11)    (22)    (7)    (22)    4    (9)    -    17    (9)    (559)    454    (17)

Depreciation, amortization and impairment expense

   (374)    (297)    (236)    (166)    (137)    (113)    (88)    (30)    (19)    (1 912)    (1 408)    (1 371)

Net finance costs

   (97)    (60)    (46)    (9)    (5)    (16)    (260)    237    176    (1 600)    (818)    (593)

Share of results of associates

   1    -    -    -    -    -    1    -    -    60    1    1

Income tax expense

   (42)    (85)    (50)    (72)    (52)    (41)    (47)    (70)    (48)    (674)    (888)    (666)

Profit

   48    247    159    72    170    122    (99)    314    179    3 126    4 167    2 667

Normalized EBITDA margin in %

   17.5%    23.7%    21.8%    22.8%    26.5%    26.3%    41.0%    37.5%    63.7%    33.2%    34.6%    31.8%

Segment assets

   3 804    4 502    3 832    5 344    3 922    3 721    8 210    2 204    1 267    109 053    39 069    32 483

Intersegment elimination

                              (1 308)    (983)    (678)

Non-segmented assets

                                                5 415    4 161    2 761

Total assets

                              113 160    42 247    34 566

Segment liabilities

   722    779    661    1 108    764    512    1 389    841    770    15 104    9 950    7 947

Intersegment elimination

                              (1 308)    (983)    (678)

Non-segmented liabilities

                                                99 364    33 280    27 297

Total liabilities

                              113 160    42 247    34 566

Gross capex

   503    568    473    282    216    105    79    79    79    2 619    2 149    1 731

Impairment losses/(reversals)

   18    5    (4)    1    1    1    -    -    -    83    (43)    101

Depreciation & amortization

   362    289    240    165    137    112    88    30    19    1 836    1 451    1 270

Additions to/(reversals of) provisions

   19    19    6    22    14    (1)    33    19    33    467    141    173

FTE

   16 054    13 509    13 356    22 509    24 056    22 925    12 050    694    699    119 874    88 690    85 617

 

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SECONDARY SEGMENTS

 

Million USD,

except volume
(million hl)

   Beer    Non-beer    Consolidated
       2008    2007    2006    2008    2007    2006    2008    2007    2006

Volume

   242    230    212    43    41    35    285    271    247

Revenue

   21 533    18 103    15 444    1 974    1 632    1 248    23 507    19 735    16 692

Total assets

   94 304    28 944    30 996    18 856    13 303    3 570    113 160    42 247    34 566

Gross capex

   2 045    1 837    1 611    574    312    120    2 619    2 149    1 731

 

6. ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES

The table below summarizes the impact of the acquisitions and disposals on the financial position of AB InBev:

 

Million US dollar   

2008

Acquisitions

      

2008

Disposals

  

2007

Acquisitions

  

2007

Disposals

  

2006

Acquisitions

  

2006

Disposals

Non-current assets

                   

Property, plant and equipment

   11 143      (3)    160    (86)    458    (1)

Intangible assets

   21 875      (1)    37    -    991    -

Investment in associates

   7 075      -    -    -    1    -

Investment securities

   -      -    -    -    1    -

Deferred tax assets

   -      -    41    -    1    -

Trade and other receivables

   196      -    1    (3)    20    -

Current assets

                   

Interest-bearing loans granted

   -      -    -    -    1    -

Income tax receivable

   320      -    -    -    -    -

Investment securities

   -      -    8    (1)    -    -

Inventories

   1 230      (1)    22    (5)    60    -

Trade and other receivables

   1 264      (3)    5    (36)    38    (1)

Cash and cash equivalents

   494      -    5    (183)    103    (8)

Assets held for sale

   21      -    -    (77)    46    (36)

Minority interests

   (48)      -    -    -    (1)    3

Non-current liabilities

                   
Interest-bearing loans and borrowings    (6 274)      -    (63)    -    (110)    -

Employee benefits

   (1 720)      -    -    -    (10)    -

Trade and other payables

   -      -    (77)    -    -    -

Provisions

   (146)      -    (126)    -    (11)    -

Deferred tax liabilities

   (11 838)      -    (8)    22    (373)    -

Current liabilities

                   

Bank overdrafts

   -      -    (1)    -    -    -
Interest-bearing loans and borrowings    -      -    (31)    -    (54)    -

Income tax payable

   -      -    (1)    -    (44)    -

Trade and other payables

   (3 167)      3    (72)    -    (176)    1

Liabilities held for sale

   -      -    -    48    -    23
Net identifiable assets and liabilities    20 425      (5)    (100)    (321)    941    (19)

Goodwill on acquisition

   32 320      -    364    -    1 081    -

Loss/(gain) on disposal

   -      4    -    (484)    -    10
Net cash received from last years’ disposal    -      (46)    -    45    -    -
Consideration paid/(received), satisfied in cash    52 745      (47)    264    (760)    2 022    (9)

Cash (acquired)/disposed of

   (494)      -    (4)    183    (103)    6

Net cash outflow/(inflow)

   52 251      (47)    260    (577)    1 919    (3)

 

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The following transactions took place in 2008:

ACQUISITION OF ANHEUSER-BUSCH

On 18 November, InBev completed the acquisition of Anheuser-Busch, following approval from shareholders of both companies. Anheuser-Busch’s results are included within the company’s results from 18 November 2008. The combination creates the global leader in beer and one of the world’s top five consumer products companies. Effective the date of the closing, InBev changed its name to AB InBev to reflect the heritage and traditions of Anheuser-Busch.

Under the terms of the merger agreement, all shares of Anheuser-Busch were acquired for 70 US dollar per share in cash for an aggregate amount of approximately 52.5b US dollar. AB InBev financed the merger with funds drawn under the new senior and equity bridge facilities (see note 25 Interest bearing loans and borrowings ). On 18 December the 9.8b US dollar equity bridge facility was reimbursed with the proceeds of the issuance of 986 109 272 new AB InBev shares (8.71b US dollar). In line with the company’s risk management policy, AB InBev fixed the consideration by matching sources (share issuance in euro) and uses of proceeds (reimbursement of 9.8b US dollar equity bridge facility) by pre-hedging its exposure to the foreign exchange rate between the euro and the US dollar at an average all-in-rate of 1.5409 US dollar per euro.

Transaction costs for the acquisition and costs related to entering into the financing arrangements approximated 1.2b US dollar in total, of which: 0.3b US dollar are allocated to goodwill, 0.1b US dollar relates to the capital increase, 0.1b US dollar relates to the senior and equity bridge facilities commitment fees and equity bridge facility arrangement fees and are reported in the 2008 income statement, and 0.7b US dollar relates to the senior facility arrangement fees and will be taken in the income statement as an accretion expense over the remaining life time of the financing using the effective interest rate method.

Furthermore, as per the terms set in the merger agreement, AB InBev has assumed some 2008 pre-merger obligations. These obligations were estimated at 68m US dollar of which 10m US dollar were accrued in the opening balance sheet and will be settled in cash and of which 58m US dollar will be settled in AB InBev options. The option grant was approved by the AB InBev shareholders at the shareholders’ meeting of 28 April 2009.

The company is in the process of finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed in compliance with IFRS 3. The provisional allocation of the purchase price included in the 2008 balance sheet and detailed in the table below is based on the current best estimates of AB InBev’s management with input from independent third parties. The completion of the purchase price allocation may result in further adjustment to the carrying value of Anheuser-Busch’s recorded assets and liabilities and the determination of any residual amount that will be allocated to goodwill.

The following table presents the provisional allocation of purchase price to the Anheuser-Busch business as of 18 November 2008:

 

Million US dollar    Before Purchase
Price Allocation
   Purchase Price
Allocation
   After Purchase
Price Allocation

Non-current assets

        

Property, plant and equipment

   8 813    2 330    11 143

Goodwill

   1 210    (1 210)    -

Intangible assets

   637    21 230    21 867

Investment in associates

   4 134    2 941    7 075

Trade and other receivables

   216    (20)    196

Current assets

        

Income tax receivable

   358    (38)    320

Inventories

   1 118    112    1 230

Trade and other receivables

   1 252    12    1 264

Assets held for sale

   21    -    21

Cash and cash equivalent

   494    -    494

Minority interest

   (48)    -    (48)

Non-current liabilities

        

Interest-bearing loans and borrowings

   (7 594)    1 320    (6 274)

Employee benefits

   (1 720)    -    (1 720)

Provisions

   (118)    (28)    (146)

Deferred tax liabilities

   (1 272)    (10 566)    (11 838)

Current liabilities

        

Trade and other payables

   (2 951)    (216)    (3 167)

Net identified assets and liabilities

   4 550    15 867    20 417

Goodwill on acquisition

         32 235

Consideration paid in cash

         52 652

 

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The transaction resulted in 32.2b US dollar of goodwill provisionally allocated primarily to the US business. The factors that contributed to the recognition of goodwill include the acquisition of an assembled workforce and the premiums paid for cost synergies expected to be achieved in Anheuser-Busch. Management’s assessment of the future economic benefits supporting recognition of this goodwill is in part based on expected savings through the implementation of AB InBev best practices such as, among others, a zero based budgeting program and initiatives that are expected to bring greater efficiency and standardization to brewing operations, generate cost savings and maximize purchasing power. Goodwill also arises due to the recognition of deferred tax liabilities in relation to the preliminary fair value adjustments on acquired intangible assets for which the amortization does not qualify as a tax deductible expense.

The valuation of the property, plant and equipment, intangible assets, investment in associates, interest bearing loans and borrowings and employee benefits and other assets and liabilities are based on the current best estimates of AB InBev’s management, with input from independent third parties.

The majority of the intangible asset valuation relates to brands with indefinite life. The valuation of the brands with indefinite life is based on a series of factors, including the brand history, the operating plan and the countries in which the brands are sold. The intangibles with an indefinite life mainly include the Budweiser family (including Bud and Bud Light), the Michelob brand family, the Busch brand family and the Natural brand family and have been fair valued for a total amount of 21 532m US dollar.

Distribution agreements and favorable contracts have been fair valued for a total amount of 335m US dollar. These are being amortized over the term of the associated contracts ranging from 3 to 18 years.

The valuation of the investment in associates (including Modelo) was performed considering the share price and exchange rate prevailing on the 18th of November. For the investment in Tsingtao, the valuation was adjusted considering the expected consideration on the disposal of the 19.9% stake in Tsingtao announced on 23 January 2009.

A deferred tax liability has been accrued on most fair value adjustments considering a tax rate of 39%.

As of the completion date of the acquisition, Anheuser-Busch contributed 1.86b US dollar to the revenue and 57m US dollar to the profit of AB InBev. If the acquisition date had been 1 January 2008 it is estimated that AB InBev’s unaudited pro forma revenue, profit from operations and profit would have been higher by 15.5b US dollar, 3.0b US dollar, and 0.4b US dollar respectively. The unaudited pro-forma data includes certain purchase accounting adjustments such as the estimated changes in depreciations and amortization expenses on acquired tangible and intangible assets. However, the unaudited pro-forma results do not include any anticipated cost savings or other effects of the planned integration of Anheuser-Busch. Accordingly, such amounts are not necessarily indicative of the results if the combination had occurred on 1 January 2008 or that may result in the future.

As a result of the United States of America (“US”) antitrust review of the transaction AB InBev’s subsidiary InBev USA, LLC will cease to act as the exclusive importer of Labatt branded beer (which includes primarily Labatt Blue and Labatt Blue Light) (“Labatt Beer”) in the US for Labatt Brewing Company Limited, a wholly owned subsidiary of AmBev. Accordingly, a consent final judgment filed in the US District Court for the District of Columbia sets forth that LBCL will grant to an independent third-party (“Licensee”) a perpetual and exclusive license to: (i) market, distribute and sell Labatt Beer for consumption in the US, (ii) brew such Labatt Beer in the US or Canada solely for sale for consumption in the US, and (iii) to use the relevant trademarks and intellectual property in connection therewith; and LBCL will brew and supply to Licensee the Labatt Beer for an interim period not to exceed three years. The specific terms and conditions of the license agreement and the supply agreement were negotiated with the Licensee and approved by the US Department of Justice (see note 35 Events after the balance sheet date ). Separately, in order to ensure that AmBev is adequately compensated, AB InBev also agreed to indemnify AmBev in connection with certain events related to the implementation of the consent final judgment. In 2007, approximately 1.7m hectoliters of Labatt Beer were sold in the US. The impact of such transactions on earnings is not material to AB InBev’s overall business, nor the North America reporting segment in which it operated.

OTHER TRANSACTIONS

 

 

The company acquired several local distributors throughout the world. As these distributors are immediately integrated in the AB InBev operations, no separate reporting is maintained on their contributions to the AB InBev profit. Goodwill recognized on these transactions amounted to 85m US dollar. Other identified intangible assets were not significant.

 

 

In January, AmBev reached an agreement for the purchase of the Cintra brands. The finalization of the purchase accounting for the 2007 business combination with Cintra resulted in the recognition of intangible assets for an amount of 8m US dollar. In May 2008, the Cintra brands were sold.

 

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The 47m US dollar cash inflow from disposals results from the sale of two wholesalers in Western Europe and from the partial collection of the remaining receivable from the sale of Immobrew in 2007.

The following transactions took place in 2007:

 

 

On 1 February, InBev SA/NV (“InBev” as existing prior to the Anheuser-Busch acquisition) announced that Labatt Brewing Company Limited (Labatt) had entered into a Support Agreement with Lakeport Brewing Income Fund (“Lakeport”) to acquire all of the outstanding units of Lakeport at a purchase price of 28.00 Canadian dollars per unit in cash for an aggregate purchase price of just over 201.4m Canadian dollar. On 29 March, Labatt and Lakeport jointly announced that holders of trust units of Lakeport had tendered their units under Labatt’s offer. Costs directly attributable to the combination represent 7m US dollar. The amounts recognized at the acquisition date for each class of Lakeport’s assets, liabilities and contingent liabilities are included in the column “2007 Acquisitions” of the above table. The Lakeport goodwill of 161m US dollar is justified by the strong and growing position of Lakeport in the discount segment in Ontario.

Lakeport contributed 7m US dollar to the 2007 profit of InBev. If the acquisition date had been 1 January 2007 it is estimated that InBev’s unaudited pro forma revenue and profit would have been higher by approximately 19m and 3m US dollar, respectively.

 

 

On 28 March, AmBev announced the signing of a purchase agreement with respect to the acquisition of 100% of Goldensand Comercio e Serviços Lda (“Goldensand”), the controlling shareholder of Cervejarias Cintra Industria e Comercio Ltda (“Cintra”).

The total transaction value amounted to approximately 150m US dollars and did not include the brands and distribution assets of Cintra, which may be included later at the option of the seller. The amounts recognized at the acquisition date for each class of Cintra’s assets, liabilities and contingent liabilities are included in the column “2007 Acquisitions” of the above table. The Cintra goodwill of 149m US dollar is justified by the acquisition of additional production capacity. The fair values of the identifiable assets and liabilities are provisional as at 31 December, and are subject to possible revisions in the course of 2008.

Cintra contributed (12)m US dollar to the 2007 profit of InBev. If the acquisition date had been 1 January 2007 it was estimated that InBev’s unaudited pro forma revenue and profit would have been higher by approximately 21m and 3m US dollar, respectively.

 

 

The company acquired several local distributors throughout the world. As these distributors are immediately integrated in the InBev operations, no separate reporting is maintained on their contributions to the InBev profit. Goodwill recognized on these transactions amounted to 54m US dollar.

 

 

On 6 July, InBev announced that it had entered into an agreement with Cofinimmo under which InBev Belgium sold 90% of Immobrew, a subsidiary which directly owns 824 pubs and some residential real estate locations in Belgium and indirectly 245 in the Netherlands, for 573m US dollar on a debt and cash free basis. At the same time InBev entered into a lease agreement with Immobrew and some of its affiliates. Consistent with InBev’s commitment to free up capital invested in non-core activities, InBev had decided to sell parts of its real estate assets in Belgium and the Netherlands, thereby enhancing the focus on its core beer business. The portfolio was sold to Cofinimmo, the largest listed real estate company in Belgium. The structure of the transaction ensured that InBev Belgium retains a 10% interest in Immobrew. Immobrew holds lease agreements (commercial types) of 27 years (plus renewal mechanism) with InBev for an initial rent of 36.7m US dollar per annum (indexed to CPI) these leases are classified as operating. InBev records its remaining investment in Immobrew as an associate. The transaction was closed on 31 October and resulted in an exceptional net gain of 451m US dollar.

InBev’s business in pubs and bars is a tradition and strength, and remains a key factor for success in connecting with consumers and InBev continues to be the dedicated partner and supplier for the respective properties in Belgium and the Netherlands. The commercial relationship between the pub tenants and InBev did not change. Cofinimmo has committed to further investments in the properties, and it is the aim of both parties to assure the continued success of the property portfolio.

In addition, the sale of Dinkelacker and some dormant companies were closed in 2007. The amounts derecognized at the selling date for each class of their assets and liabilities are included in the column “2007 disposals” of the above table.

The main transactions that took place in 2006 relate to the acquisition of Fujian Sedrin and of the remaining part of all of Beverage Associates Corp.’s (BAC) shares in Quinsa.

 

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7. OTHER OPERATING INCOME/(EXPENSES)

 

Million US dollar    2008    2007    2006

Government grants

   142    130    110

License income

   40    44    14

(Additions to)/reversals of provisions

   -    34    (51)

Net gain on disposal of property, plant and equipment and intangible assets

   87    55    35

Net rental and other operating income

   171    97    59
   440    360    167

Research expenses as incurred

   75    27    21

The government grants relate primarily to fiscal incentives given by certain Brazilian states based on the company’s operations and investments in those states.

In 2008, the company expensed 75m US dollar in research, mainly in our Belgian research center, compared to 27m US dollar in 2007 and 21m US dollar in 2006. Part of this was expensed in the area of market research, but the majority is related to innovation in the areas of process optimization especially as it pertains to capacity, new product developments and packaging initiatives.

 

8. EXCEPTIONAL ITEMS

The exceptional items included in the income statement are as follows:

 

Million US dollar    2008    2007    2006

Restructuring (including impairment losses)

   (457)    (59)    (174)

Fair value adjustments

   (43)    -    -

Business and asset disposal

   (38)    537    (24)

Disputes

   (20)    33    80
   (558)    511    (118)

IAS 1 Presentation of financial statements requires material items of income and expense to be disclosed separately. Exceptional items are items, which in management’s judgment, need to be disclosed by virtue of their size or incidence in order for the user to obtain a proper understanding of the financial information. The company considers these items to be of significance in nature, and accordingly, management has excluded this from their segment measure of performance as noted in Note 5, Segment Reporting .

The exceptional items included in the income statement are as follows:

As parts of its plans to effectively integrate Anheuser-Busch, AB InBev communicated on 8 December plans to cut approximately 1 400 US salaried positions in the US beer-related divisions. The company estimates that the aggregate pre-tax expense associated with the reduction will be approximately 195m US dollar. These costs have been accrued at the time of the announcement in accordance with IAS 37.

The 2008 exceptional restructuring charges further include 182m US dollar cost which mainly result of organizational alignments and outsourcing of activities in Western Europe, the global headquarters and Asia Pacific. These changes aim to eliminate overlap or duplicated processes and activities across functions and zones taking into account the right match of employee profiles with the new organizational requirements. The one time expenses as a result of the series of decisions will provide us with a lower cost base besides a stronger focus on AB InBev’s core activities, quicker decision-making and improvements to efficiency, service and quality.

The 2008 restructuring charges also include an impairment loss of 80m US dollar related to AB InBev’s plans to implement a new distribution model in France, involving the transfer of a controlling interest in its current integrated distribution network (“CafeIn”) and entry into a partnership for the distribution of AB InBev’s beverages. In connection with this reorganization, CafeIn was recognized as an asset held for sale and an impairment loss of 80m US dollar was recognized per end of December 2008.

Fair value adjustments, recognized in 2008 for a total of (43)m US dollar, relate to the exceptional impact of revaluing the inventories of Anheuser-Busch in line with IFRS 3.

Business and asset disposals in 2008 resulted in a net loss of 38m US dollar and is partly related to losses recognized in connection with the above mentioned reorganization in France (10m US dollar). Next to that, additional losses related to business and asset disposals of previous years were booked in 2008.

Profit from operations as at 31 December 2008 was negatively affected by provisions for disputes of 20m US dollar.

 

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The 2007 exceptional restructuring charges of 59m US dollar consist of 115m US dollar organizational alignments in Western Europe, Central and Eastern Europe and the global headquarters and to the further implementation of our European shared service center for transactional services. These changes aim to eliminate overlap or duplicated processes and activities across functions and zones taking into account the right match of employee profiles with the new organizational requirements. The outcome should be a stronger focus on InBev’s core activities, quicker decision-making and improvements to efficiency, service and quality. This charge was partly offset by a reversal of an impairment loss of 56m US dollar, based on a change in the recoverable amount of the respective assets.

The sale of Immobrew to Cofinimmo and the disposal of some dormant companies and assets held for sale resulted in a gain before taxes of 537m US dollar as at December 2007.

Further, profit from operations as at 31 December 2007 was positively affected by a net reversal of provisions for disputes of 33m US dollar.

The 2006 exceptional restructuring charges of 174m US dollar related primarily to the realignment of the structures and processes in Western Europe, North America, China and the global headquarters, and to the creation of European and American shared service centers for transactional services.

The sale of the Rolling Rock ® family of brands, Dinkelacker and Wolters, resulted in a net business disposal loss of 24m US dollar.

The 2006 exceptional items also included a net reversal of provisions for claims of 80m US dollar. This related primarily to the reversal of a provision for non-income taxes in AmBev partially offset by the settlement of a dispute between AmBev and Credit Suisse.

All the above amounts are before income taxes. The 2008 exceptional items as at 31 December decreased income taxes by (145)m US dollar, whereas the 2007 exceptional items as at 31 December increased income taxes by 48m US dollar. The impact in 2006 was neutral.

 

9. PAYROLL AND RELATED BENEFITS

 

Million US dollar    2008    2007    2006

Wages and salaries

   (2445)    (1 958)    (1 776)

Social security contributions

   (480)    (438)    (408)

Other personnel cost

   (390)    (321)    (267)

Pension expense for defined benefit plans

   (119)    (85)    (83)

Share-based payment expense

   (62)    (72)    (61)

Contributions to defined contribution plans

   (17)    (7)    (8)
   (3 513)    (2 881)    (2 603)

Average number of full time equivalents (FTE)

   90 949    88 690    85 617
Inclusion of Anheuser-Busch average number of full time equivalents (FTE) (on a full year basis)    28 925    -    -

Total average number of full time equivalents (FTE)

   119 874    88 690    85 617

The average number of full time equivalents can be split as follows:

 

       2008    2007    2006

AB InBev NV (parent company)

   209    375    345

Anheuser-Busch subsidiaries

   28 925    -    -

Other subsidiaries

   88 903    86 441    83 466

Proportionally consolidated entities

   1 837    1 874    1 806
   119 874    88 690    85 617

Note 5 Segment reporting contains the split of the FTE by geographical segment.

 

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10. ADDITIONAL INFORMATION ON OPERATING EXPENSES BY NATURE

Depreciation, amortization and impairment charges are included in the following line items of the 2008 income statement:

 

Million US dollar   

Depreciation and

impairment of

property, plant and

equipment

  

Amortization and

impairment of

intangible assets

  

Impairment of

goodwill

  

Impairment of non-
current assets held

for sale

Cost of sales

   1 221    3    -    -

Distribution expenses

   124    -    -    -

Sales and marketing expenses

   288    67    -    -

Administrative expenses

   114    89    -    -
Other operating (income)/expenses    -    -    7    -

Exceptional items

   (1)    -    -    -
   1 746    159    7    -

The depreciation, amortization and impairment of property, plant and equipment includes a full-cost reallocation of (7)m US dollar from the aggregate depreciation, amortization and impairment expense to cost of goods sold.

Depreciation, amortization and impairment charges are included in the following line items of the 2007 income statement:

 

Million US dollar   

Depreciation and

impairment of

property, plant and

equipment

  

Amortization and

impairment of

intangible assets

  

Impairment of

goodwill

  

Impairment of non-
current assets held

for sale

Cost of sales

   951    10    -    -

Distribution expenses

   66    -    -    -

Sales and marketing expenses

   239    59    -    -

Administrative expenses

   89    50    -    -

Other operating (income)/expenses

   -    -    -    -

Exceptional items

   (27)    -    -    (29)
   1 318    119    -    (29)

Depreciation, amortization and impairment charges are included in the following line items of the 2006 income statement:

 

Million US dollar   

Depreciation and

impairment of

property, plant and

equipment

  

Amortization and

impairment of

intangible assets

  

Impairment of

goodwill

  

Impairment of non-
current assets held

for sale

Cost of sales

   820    5    -    -

Distribution expenses

   56    1    -    -

Sales and marketing expenses

   193    54    -    -

Administrative expenses

   103    38    -    -

Other operating (income)/expenses

   -    -    -    -

Exceptional items

   55    -    46    -
   1 227    98    46    -

 

11. FINANCE COST AND INCOME

RECOGNIZED IN PROFIT OR LOSS

FINANCE COSTS

 

Million US dollar    2008    2007    2006

Interest expense

   (1 317)    (751)    (617)

Accretion expense

   (127)    (49)    (30)

Losses on hedging instruments that are not part of a hedge accounting relationship

   (36)    (27)    (50)

Losses from hedge ineffectiveness

   (30)    (8)    -

Taxes on financial transactions

   (39)    (66)    (58)

Net foreign exchange losses

   (96)    (27)    (1)

Other financial costs, including bank fees

   (56)    (47)    (45)
   (1 701)    (975)    (801)

Exceptional finance costs related to the Anheuser-Busch acquisition

   (187)    -    -
   (1 888)    (975)    (801)

 

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The interest expense increased by 566m US dollar compared to 2007. 247m US dollar of this increase stems from the interest on the existing loans of Anheuser-Busch and the financing of the transaction since 18 November 2008. The remainder of the interest expense increase results from higher net debt positions in the parent companies and AmBev Brazil, mainly as a result of dividend payments and share buy back programs.

The increase in the accretion expense by 78m US dollar as compared to 2007 results from the amortization of the arrangement fees paid on the senior facilities and the amortization of the fair value adjustment on the Anheuser-Busch debt (see also note 6 – Acquisition and disposal of subsidiaries ). The increase of the other financial costs is mainly explained by unrealized foreign exchange losses, mainly on outstanding US dollar denominated assets.

In connection with the combination with Anheuser-Busch, the company recognized financial expenses of 187m US dollar in 2008. This expense comprised 119m US dollar relating to the commitment fees for the syndicated senior loan and equity bridge facilities and the underwriting and arrangement fees for the equity bridge facility. In addition, a 68m US dollar loss was recognized for ineffectiveness of the hedging on the Anheuser-Busch financing prior to the closing of the acquisition.

The increase in interest expense in 2007 by 134m US dollar as compared to 2006 is explained by higher interest expense following the higher mix of Brazilian real interest-bearing liabilities in InBev’s 2007 average net debt in comparison to the mix in 2006 – see also note 30 Risks arising from financial instruments .

Interest expense is presented net of the effect of interest rate derivative instruments hedging AB InBev’s interest rate risk – see also note 30 Risks arising from financial instruments . As required by IFRS 7 Financial Instruments: Disclosures the interest expense recognized on unhedged and hedged financial liabilities and the net interest expense from the related hedging derivative instruments is split as follows:

 

Million US dollar    2008    2007    2006

Financial liabilities measured at amortized cost – not hedged

   (794)    (338)    (265)

Fair value hedges – hedged items

   (121)    (141)    (94)

Fair value hedges – hedging instruments

   (141)    (93)    (39)

Cash flow hedges – hedged items

   (155)    (183)    (87)

Cash flow hedges – hedging instruments (reclassified from equity)

   53    46    (5)

Net investment hedges—hedging instruments (interest component)

   (44)    -    -

Hedged items not part of a hedge accounting relationship – economic hedges

   (102)    (11)    (52)

Hedging instruments not part of a hedge accounting relationship – economic hedges

   (13)    (31)    (75)
   (1 317)    (751)    (617)

Interest expense recognized on fair value hedged debt and hedging instruments mainly relates to the hedging of the 850m US dollar portion of our Private Placements and the 500m US dollar AmBev bond maturing in 2011, 500m US dollar AmBev bond maturing in 2013 and the 300m Brazilian real bond maturing 2017. Interest expense in relation to cash flow hedges is mainly related to the hedging of the 2 695m euro credit facility in AB InBev and to the 680m Canadian dollar credit facilities in Canada. Interest expense on net investment hedges is related to the 500m euro hedge of the net investment in AmBev Brazil. The increase of the interest expense on the hedged items not part of a hedge accounting relationship is mainly explained by the 1.5b Brazilian real issue of promissory notes in AmBev Brazil during 2008.

FINANCE INCOME

 

Million US dollar    2008    2007    2006

Interest income

   124    74    77

Dividend income, non-consolidated companies

   1    1    1

Gains on hedging instruments that are not part of a hedge accounting relationship

   126    30    84

Gains from hedge ineffectiveness

   -    -    3

Gains from sale of available-for-sale financial assets

   -    -    8

Gains on non-derivative financial instruments at fair value through profit or loss

   1    3    3

Other financial income

   36    49    32
   288    157    208

The increase in interest income is explained by higher cash and cash equivalent positions in AmBev Brazil and in the parent companies.

The increase in gains on hedging instruments not part of a hedge accounting relationship by 96m US dollar as compared to 2007 is mainly explained by the positive market gains on the freestanding cross currency swaps in Korea and Russia.

 

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The 2008 interest income stems from the following financial assets:

 

Million US dollar    2008    2007    2006

Cash and cash equivalents

   73    34    38

Investment securities held for trading

   23    21    24

Loans to customers

   13    14    13

Other loans and receivables

   15    5    2
   124    74    77

No interest income was recognized on impaired financial assets.

Foreign exchange gains and losses are presented net of the effect of foreign exchange derivative instruments designated for hedge accounting. As required by IFRS 7 Financial Instruments: Disclosures the split between results from foreign currency hedged items and results on the related hedging instruments can be summarized per type of hedging relationship as follows:

 

Million US dollar    2008     2007     2006  

Fair value hedges – hedged items

   (370   300      134   

Fair value hedges – hedging instruments

   370      (300   (134

Cash flow hedges – hedged items

   16      (4   (10

Cash flow hedges – hedging instruments (reclassified from equity)

   (16   4      10   

Hedged items not part of a hedge accounting relationship– economic hedges

   (6   38      69   

Hedging instruments not part of a hedge accounting relationship– economic hedges

   6      (38   (71

Other

   -      -      2   
   -      -      -   

Foreign exchange results from fair value hedges mainly relate to the private placements and AmBev bond 2011 and 2013 hedges. The results with regard to cash flow hedges primarily relate to the hedge of a Brazilian real loan in Canada. The increased foreign exchange result on the cash flow hedges is explained by the devaluation of the Brazilian real during 2008.

RECOGNIZED DIRECTLY IN EQUITY

 

Million US dollar    2008    2007    2006

Hedging reserve

        

Recognized in equity during the period on cash flow hedges

   (2 311)    (70)    16

Removed from equity and included in profit or loss

   (22)    (3)    (24)

Removed from equity and included in the initial cost of inventories

   25    96    100
   (2 308)    23    92

Translation reserve

        

Recognized in equity during the period on net investment hedges

   (1 761)    23    28

Foreign currency translation differences for foreign operations

   (2 451)    2 032    1 161
   (4 212)    2 055    1 189

The hedging reserve recognized in equity on cash flow hedges is mainly related to the fair value revaluation of the US dollar interest rate swaps entered into in 2008 to cover for the interest rate risk on the senior facility, see also note 30 Risks arising from financial instruments . The movement of the foreign exchange translation adjustment of (4 212)m US dollar is the effect of the weakening of mainly the closing rates of the Mexican peso, the Brazilian real, the Pound sterling, the Russian ruble, the South Korean won, the Ukrainian hryvnia and the Canadian dollar, offset by a positive currency translation effect as a result of the weakening of the US dollar since 18 November 2008, as the major part of the net debt is US dollar denominated.

 

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12. INCOME TAXES

Income taxes recognized in the income statement can be detailed as follows:

 

Million US dollar    2008    2007    2006

Current tax expense

        

Current year

   (1 035)    (799)    (514)

(Underprovided)/overprovided in prior years

   (8)    (18)    19
   (1 043)    (817)    (495)

Deferred tax (expense)/income

        

Overprovided in previous years

   7    -    4

Origination and reversal of temporary differences

   217    (12)    (133)

Utilization of deferred tax assets on prior years’ losses

   (27)    (104)    (54)

Origination of deferred tax assets on current year’s losses

   152    1    5

Origination of deferred tax assets on previous year’s losses

   20    44    7
   369    (71)    (171)

Total income tax expense in the income statement

   (674)    (888)    (666)

The reconciliation of the effective tax rate with the aggregated weighted nominal tax rate can be summarized as follows:

 

Million US dollar    2008    2007    2006

Profit before tax

   3 800    5 055    3 333

Deduct share of result of associates

   60    1    1

Profit before tax and before share of result of associates

   3 740    5 054    3 332

Adjustments on taxable basis

        

Non-deductible impairment of goodwill and intangible assets

   6    -    44

Expenses not deductible for tax purposes

   225    174    166

Taxable intercompany dividends

   46    301    75

Non-taxable financial and other income

   (641)    (547)    (160)
   3 376    4 982    3 457

Aggregated weighted nominal tax rate

   31.2%    32.1%    32.7%

Tax at aggregated weighted nominal tax rate

   (1 054)    (1 599)    (1 130)

Adjustments on tax expense

        

Utilization of tax losses not previously recognized

   24    34    9

Recognition of deferred tax assets on previous years’ tax losses

   19    44    8
Write-down of deferred tax assets on tax losses and current year losses for which no deferred tax asset is recognized    (77)    (38)    (64)

(Underprovided)/overprovided in prior years

   (8)    (18)    23

Tax savings from tax credits

   450    633    513

Tax savings from special tax status

   166    134    107

Change in tax rate

   (1)    19    1

Withholding taxes

   (87)    (88)    (117)

Other tax adjustments

   (106)    (9)    (16)
   (674)    (888)    (666)

Effective tax rate

   18.0%    17.6%    20.0%

The total income tax expense amounts to 674m US dollar with an effective tax rate of 18.0% (versus 17.6% in 2007 and 20.0% in 2006). The income tax expense is mainly impacted by the recognition of a deferred tax asset of 123m US dollar following the use of tax losses not previously recognized. Furthermore, the company continues to benefit at the AmBev level from the impact of interest on equity payments and tax deductible goodwill from the merger between InBev Holding Brazil and AmBev in July 2005 and the acquisition of Quinsa in August 2006. This has been partially compensated by the recognition of an exceptional impairment on the French distribution network on which no deferred tax assets are recognized. Excluding the impact of the recognition of the deferred tax asset and the exceptional expenses in France (see Note 8 Exceptional items ), the effective tax rate would have been 20.4%. Excluding exceptional items and the deferred tax asset on U.S. tax loss carry forward, the 2007 effective tax rate would have been 19.7% (2006: 19.3%).

The increase in non-taxable financial and other income from 160m US dollar in 2006 to 547m US dollar in 2007 is mainly the result of the capital gains realized on the sale of the Belgian and Dutch real estate to Cofinimmo. The increase in tax savings from tax credits from 513m US dollar in 2006 to 633m US dollar in 2007 is mainly explained by the increase in the AmBev and Quinsa goodwill tax deduction.

 

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Income taxes were directly recognized in equity as follows:

 

Million US dollar    2008    2007    2006

Income tax (losses)/gains

        

Actuarial gains and losses on pensions

   260    (33)    (9)

Cash flow hedges

   (10)    (15)    (14)

 

13. PROPERTY, PLANT AND EQUIPMENT

 

  2008   2007
Million US dollar   Land and
buildings
  Plant and
equipment
  Fixtures
and fittings
  Under
construction
  Total   Total

Acquisition cost

           

Balance at end of previous year

  4 662   12 850   3 328   990   21 830   18 814

Effect of movements in foreign exchange

  (768)   (2 113)   (501)   (139)   (3 521)   2 176

Acquisitions

  73   660   304   1 343   2 380   2 046

Acquisitions through business combinations

  4 887   5 265   590   401   11 143   160

Disposals

  (69)   (360)   (226)   (1)   (656)   (964)

Disposals through the sale of subsidiaries

  -   -   (3)   -   (3)   (208)

Transfer to other asset categories

  239   809   45   (1 394)   (301)   (186)

Other movements

  1   11   10   1   23   (8)

Balance at end of year

  9 025   17 122   3 547   1 201   30 895   21 830

Depreciation and impairment losses

           

Balance at end of previous year

  (1 992)   (7 731)   (2 348)   -   (12 071)   (10 516)

Effect of movements in foreign exchange

  303   1 259   334   -   1 896   (1 280)

Disposals

  32   301   196   -   529   802

Disposals through the sale of subsidiaries

  -   -   -   -   -   121

Depreciation

  (222)   (1 075)   (380)   -   (1 677)   (1 332)

Impairment losses

  (1)   (73)   (2)   -   (76)   14

Transfer to other asset categories

  27   85   91   -   203   107

Other movements

  1   (20)   (6)   -   (25)   13

Balance at end of year

  (1 852)   (7 254)   (2 115)   -   (11 221)   (12 071)

Carrying amount

at 31 December 2007

  2 670   5 119   980   990   9 759   9 759

at 31 December 2008

  7 173   9 868   1 432   1 201   19 674   -
           
  2007   2006
Million US dollar   Land and
buildings
  Plant and
equipment
  Fixtures
and fittings
  Under
construction
  Total   Total

Acquisition cost

           

Balance at end of previous year

  4 059   11 056   3 001   698   18 814   16 800

Effect of movements in foreign exchange

  443   1 314   342   77   2 176   1 452
Change in interest percentage for proportionally consolidated entities   -   -   -   -   -   56

Acquisitions

  78   592   276   1 100   2 046   1 590

Acquisitions through business combinations

  34   119   7   -   160   (206)

Disposals

  (72)   (659)   (230)   (3)   (964)   (479)

Disposals through the sale of subsidiaries

  (18)   -   (190)   -   (208)   (1)

Transfer to other asset categories

  138   439   127   (890)   (186)   (379)

Other movements

  -   (11)   (5)   8   (8)   (19)

Balance at end of year

  4 662   12 850   3 328   990   21 830   18 814

Depreciation and impairment losses

           

Balance at end of previous year

  (1 688)   (6 693)   (2 135)   -   (10 516)   (9 725)

Effect of movements in foreign exchange

  (211)   (819)   (250)   -   (1 280)   (837)
Change in interest percentage for proportionally consolidated entities   -   -   -   -   -   (38)

Acquisitions through business combinations

  -   -   -   -   -   664

Disposals

  45   546   211   -   802   360

Disposals through the sale of subsidiaries

  1   -   120   -   121   -

Depreciation

  (159)   (848)   (325)   -   (1 332)   (1 172)

Impairment losses

  21   (4)   -   (3)   14   (55)

Transfer to other asset categories

  (1)   82   23   3   107   282

Other movements

  -   5   8   -   13   5

Balance at end of year

  (1 992)   (7 731)   (2 348)   -   (12 071)   (10 516)

Carrying amount

at 31 December 2006

  2 371   4 363   866   698   8 298   8 298

at 31 December 2007

  2 670   5 119   980   990   9 759   -

 

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The transfer to other asset categories mainly relates to the separate presentation in the balance sheet of property, plant and equipment held for sale in accordance with IFRS 5 Non-current assets held for sale and discontinued operations .

The carrying amount of property, plant and equipment subject to restrictions on title amounts to 228m US dollar.

LEASED ASSETS

The company leases land and buildings as well as equipment under a number of finance lease agreements. The carrying amount of leased land and buildings was 125m US dollar (2007: 9m US dollar; 2006: 14m US dollar) and leased plant and equipment was 17m US dollar (2007: 25m US dollar; 2006: 9m US dollar). For an overview of the operating lease agreements, please refer to note 31 Operating leases .

 

14. GOODWILL

 

Million US dollar    2008    2007    2006

Acquisition cost

        

Balance at end of previous year

   20 365    16 206    13 104

Effect of movements in foreign exchange

   (3 823)    2 294    1 160

Acquisitions through business combinations

   32 320    364    1 081

Purchases of minority interests

   708    1 500    847

Disposals

   -    -    (46)

Other movements

   (7)    1    60

Balance at end of year

   49 563    20 365    16 206

Impairment losses

        

Balance at end of previous year

   -    -    -

Impairment losses

   (7)    -    (46)

Disposals

   -    -    46

Balance at end of year

   (7)    -    -

Carrying amount

at 31 December 2006

   16 206      

at 31 December 2007

   20 365      

at 31 December 2008

   49 556      

Current year acquisitions through business combinations primarily reflect the Anheuser-Busch acquisition. This transaction resulted in the recognition of goodwill of 32 235m US dollar. The other business combinations that took place during 2008 are the acquisitions of several local distributors throughout the world – see note 6 Acquisitions and disposals of subsidiaries . These transactions resulted in recognition of goodwill of 85m US dollar.

As a result of a share buy-back program of AmBev shares in 2008, AB InBev increased its interest percentage in AmBev from 61.01% to 61.75%. Other purchases of minority interests relate to the buy out of AB InBev Shiliang (Zhejiang) Brewery and to the closing of AmBev’s tender offer for Quinsa shares resulting in an increase of AmBev’s economic interest in Quinsa to 99.83%. The increase of goodwill by 708m US dollar stems from these transactions for which the total cash consideration amounted to 853m US dollar. As the related subsidiaries were already fully consolidated, the purchases did not impact AB InBev’s profit, but reduced the minority interests and thus impacted the profit attributable to equity holders of AB InBev.

Impairment losses of 7m US dollar were incurred following indications of impairments of local businesses in Italy and France.

The most relevant business combinations that took place during 2007 are the acquisition of all of the outstanding units of Lakeport and the acquisition of 100% of Goldensand Comercio e Serviços Lda, the controlling shareholder of Cintra. These transactions resulted in recognition of goodwill of 161m US dollar and 149m US dollar respectively. The company also acquired several local distributors throughout the world. Goodwill recognized on these transactions amounted to 54m US dollar.

As a result of a share buy-back program of AmBev shares in 2007, AB InBev increased its interest percentage in AmBev from 58.36% to 61.01%. As AmBev was already fully consolidated, the purchases did not impact AB InBev’s profit, but reduced the minority interests and thus impacted the profit attributable to equity holders of AB InBev. As a result of this program, AmBev acquired 25.6m AmBev shares for an amount of 1 544m US dollar. The goodwill increase by 1 500m US dollar stems from this share buy back program (1 500m US dollar) and the buy out of the remaining part of minority interests of Nanjing InBev Jinling Brewery.

 

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The major business combinations that took place in 2006 were the acquisition of 100% of the shares in Fujian Sedrin and of BAC’s remaining shares in Quinsa (recognition of goodwill of 609m US dollar and 465m US dollar respectively). The execution of the 2006 AmBev share buy-back program led to a goodwill increase of 791m US dollar. Following the substantial increase in shareholding in Quinsa, AB InBev fully consolidated Quinsa as from August 2006.

The carrying amount of goodwill was allocated to the different business unit levels as follows:

 

Million US dollar

Business unit

   2008    2007

Anheuser-Busch US

   32 235    -  

Brazil

   7 535    9 601

Canada

   1 680    2 021

Hispanic Latin America

   1 450    1 310

Russia/Ukraine

   1 131    1 294

Germany

   1 208    1 278

South Korea

   799    1 129

Global export

   1 077    1 119

China

   1 144    991

UK/Ireland

   692    949

France/Italy/Spain

   370    405

Romania/Montenegro/Serbia

   159    188

Belgium/Luxemburg

   75    79

Other

   1    1
   49 556    20 365

In the fourth quarter of 2008, AB InBev completed its annual impairment test for goodwill and concluded, based on the assumptions described below, that no impairment charge was warranted. The company cannot predict whether an event that triggers impairment will occur, when it will occur or how it will affect the asset values reported. AB InBev believes that all of its estimates are reasonable, they are consistent with the internal reporting and reflect management’s best estimates. However, inherent uncertainties exist that management may not be able to control. While a change in the estimates used could have a material impact on the calculation of the fair values and trigger an impairment charge, the company is not aware of any reasonably possible change in a key assumption used that would cause a business unit’s carrying amount to exceed its recoverable amount. Although AB InBev believes that its judgments, assumptions and estimates are appropriate, actual results may differ from these estimates under different assumptions or conditions.

Goodwill, which accounted for approximately 44% of AB InBev’s total assets as at 31 December 2008, impairment testing relies on a number of critical judgments, estimates and assumptions. Goodwill is tested for impairment at the business unit level (that is, one level below the segments) based on a fair-value-less-cost-to-sell approach using a discounted free cash flow approach based on current acquisition valuation models. The key judgments, estimates and assumptions used in the fair-value-less-cost-to-sell calculations are as follows:

 

   

The first year of the model is based on management’s best estimate of the free cash flow outlook for the current year;

 

   

In the second to fourth years of the model, free cash flows are based on AB InBev’s strategic plan as approved by key management. AB InBev’s strategic plan is prepared per country and is based on external sources in respect of macro-economic assumptions, industry, inflation and foreign exchange rates, past experience and identified initiatives in terms of market share, revenue, variable and fixed cost, capital expenditure and working capital assumptions;

 

   

For the subsequent six years of the model, data from the strategic plan is extrapolated using simplified assumptions such as constant volumes and variable cost per hectoliter and fixed cost linked to inflation, as obtained from external sources;

 

   

Cash flows after the first ten-year period are extrapolated using expected annual long-term consumer price indices, based on external sources, in order to calculate the terminal value;

 

   

Projections are made in the functional currency of the business unit and discounted at the unit’s weighted average cost of capital. The latter ranged primarily between 7.6% and 25.5% in euro nominal terms for goodwill impairment testing conducted for 2008;

 

   

Cost to sell is assumed to reach 2% of the entity value based on historical precedents.

The above calculations are corroborated by valuation multiples, quoted share prices for publicly-traded subsidiaries or other available fair value indicators.

 

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15. INTANGIBLE ASSETS

 

     2008    2007
     Brands    Supply &

Distribution

Rights

   Software    Other          

Million US dollar

               Total    Total

Acquisition cost

                 

Balance at end of previous year

   1 104    841    442    98    2 485    2 144

Effect of movements in foreign exchange

   (36)    (77)    (71)    -    (184)    137

Acquisitions through business combinations

   21 199    483    160    33    21 875    37

Acquisitions and expenditures

   -    67    132    39    238    102

Disposals

   -    (49)    (3)    (16)    (68)    (30)

Transfer to other asset categories

   -    (15)    59    (18)    26    85

Other movements

   -    (24)    1    17    (6)    10

Balance at end of year

   22 267    1 226    720    153    24 366    2 485

Amortization and impairment losses

                 

Balance at end of previous year

   -    (359)    (254)    (32)    (645)    (478)

Effect of movements in foreign exchange

   -    23    42    1    66    (61)

Amortization

   -    (64)    (89)    (6)    (159)    (119)

Disposals

   -    17    1    4    22    26

Transfer to other asset categories

   -    14    -    -    14    (5)

Other movements

   -    9    (1)    1    9    (8)
   -    (360)    (301)    (32)    (693)    (645)

Balance at end of year

                 

Carrying value

at 31 December 2007

   1 104    482    188    66    1840    1 840

at 31 December 2008

   22 267    866    419    121    23 673    -

 

     2007    2006
     Brands    Supply &

Distribution

Rights

   Software    Other          

Million US dollar

               Total    Total

Acquisition cost

                 

Balance at end of previous year

   1 052    734    294    64    2 144    1 035

Effect of movements in foreign exchange

   21    61    47    8    137    123
Change in interest percentage for proportionally consolidated entities    -    -    -    -    -    6

Acquisitions through business combinations

   36    -    1    -    37    973

Acquisitions and expenditures

   -    27    44    31    102    110

Disposals

   -    (24)    (6)    -    (30)    (34)

Transfer to other asset categories

   (5)    33    62    (5)    85    (63)

Other movements

   -    10    -    -    10    (6)

Balance at end of year

   1 104    841    442    98    2 485    2 144

Amortization and impairment losses

                 

Balance at end of previous year

   -    (285)    (172)    (21)    (478)    (398)

Effect of movements in foreign exchange

   -    (28)    (29)    (4)    (61)    (39)

Amortization

   -    (58)    (54)    (7)    (119)    (98)

Acquisitions through business combinations

   -    -    -    -    -    18

Disposals

   -    19    7    -    26    30

Transfer to other asset categories

   -    1    (6)    -    (5)    5

Other movements

   -    (8)    -    -    (8)    4
   -    (359)    (254)    (32)    (645)    (478)

Balance at end of year

                 

Carrying value

at 31 December 2006

   1 052    449    122    43    1 666    1 666

at 31 December 2007

   1 104    482    188    66    1 840    -

Current year acquisitions through business combinations primarily reflect the Anheuser-Busch transaction which resulted in the recognition of brands with an indefinite life of 21.5b US dollar, of which the most significant brand families are the Budweiser brand family assigned a preliminary value of 17.6b US dollar and the Busch brand family valued at 1.4b US dollar. Intangible assets with a finite life of 335m US dollar, consists of distribution agreements and favorable contracts. The finite-lived intangible assets are being amortized over the term of the associated contracts ranging from 3 to 18 years.

 

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The increase of 37m US dollar intangible assets with indefinite useful life is explained by the 2007 purchase accounting for Lakeport – see note 6 Acquisitions and disposals of subsidiaries . In accordance with the IFRS 3 Business Combinations requirements, Lakeport’s brands were measured at their fair value. The measurement was determined by an independent valuation expert and corroborated by the royalty streams that could be obtained from licensing the brands and distribution rights to another party in an arm’s length transaction.

AB InBev is the owner of some of the world’s most valuable brands in the beer industry. As a result, brands and certain distribution rights are expected to generate positive cash flows for as long as the company owns the brands and distribution rights. Given AB InBev’s more than 600-year history, certain brands and their distribution rights have been assigned indefinite lives.

As of 31 December 2008, the carrying amount of the intangible assets amounted to 23 673m US dollar (31 December 2007: 1 840m US dollar) of which 22 791m US dollar was assigned an indefinite useful life (31 December 2007: 1 334m US dollar) and 864m US dollar a finite life (31 December 2007: 483m US dollar).

Development costs capitalized were not material for any of the periods presented.

Intangible assets with indefinite useful lives have been tested for impairment at a country cash-generating unit level (i.e. at or one level below the business unit level) based on the same impairment testing approach as for goodwill – see note 14 Goodwill above. The royalty stream that could be obtained from licensing the intangible asset to a third party in an arm’s length transaction is also used as an indicator of fair value.

The carrying amount of intangible assets with indefinite useful lives was allocated to the different countries as follows:

 

Million dollars

Country

   2008    2007

USA

   21 592    60

Argentina

   406    445

China

   231    216

Bolivia

   167    155

Paraguay

   154    156

UK

   97    134

Uruguay

   42    49

Canada

   33    40

Russia

   28    34

Chile

   19    25

Germany

   22    20
   22 791    1 334

 

16. INVESTMENT IN ASSOCIATES

The business combination with Anheuser-Busch increased the investment in associates by 7.1b US dollar. This amount includes a fair value adjustment of 2.9b US dollar as part of the purchase price allocation. Please refer to note 6 Acquisitions and disposals of subsidiaries for more detailed information. The balance at 31 December 2008 amounted to 6.9b US dollar and is mainly impacted by the weakening of the Mexican peso.

Main investments in associates comprise Grupo Modelo in Mexico and Tsingtao Brewery Company Limited in China. Through the acquisition of Anheuser-Busch, AB InBev acquired a 35.12% direct interest in Grupo Modelo, Mexico’s largest brewer, and a 23.25% direct interest in Diblo S.A. de C.V., Grupo Modelo’s operating subsidiary, providing AB InBev with, directly and indirectly, a 50.2% interest in Modelo. However, AB InBev does not have voting or other control of either Grupo Modelo or Diblo. Through this acquisition, AB InBev also acquired Tsingtao Brewery Company Limited, the second largest brewer in China, and producer of the Tsingtao brand. AB InBev has a 27% economic stake in Tsingtao. On 23 January 2009, AB InBev announced the disposal of 19.9% of Tsingtao. Please refer to note 35 Events after the balance sheet date for more detailed information.

 

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17. INVESTMENT SECURITIES

 

Million US dollar    2008    2007

Non-current investments

     

Equity securities available-for-sale

   113    113

Debt securities held-to-maturity

   126    127
   239    240

Current investments

     

Financial assets at fair value through profit or loss—held for trading

   270    262

Debt securities held-to-maturity

   -    2
   270    264

AB InBev’s exposure to equity price risk is disclosed in note 30 Risks arising from financial instruments . The equity securities available-for-sale consist of investments in unquoted companies and are measured at cost as their fair value can not be reliably determined.

 

18. DEFERRED TAX ASSETS AND LIABILITIES

The amount of deferred tax assets and liabilities by type of temporary difference can be detailed as follows:

 

     Assets    Liabilities    Net
Million US dollar    2008    2007    2008    2007    2008    2007

Property, plant and equipment

   71    53    (4 484)    (626)    (4 413)    (573)

Intangible assets

   150    13    (8 940)    (344)    (8 790)    (331)

Goodwill

   117    141    (8)    (9)    109    132

Inventories

   19    -    (296)    -    (277)    -

Investment securities

   7    79    -    (9)    7    70

Investment in associates

   -    -    (3 158)    -    (3 158)    -

Trade and other receivables

   13    16    (412)    (1)    (399)    15

Interest-bearing loans and borrowings

   3 513    12    (120)    (72)    3 393    (60)

Employee benefits

   956    290    (13)    (3)    943    287

Provisions

   277    266    (1)    -    276    266

Derivatives

   193    87    (29)    -    164    87

Other items

   622    39    (179)    (140)    443    (101)

Loss carry forwards

   558    495    -    -    558    495

Gross deferred tax assets/(liabilities)

   6 496    1 491    (17 640)    (1 204)    (11 144)    287

Netting by taxable entity

   (5 564)    (515)    5 564    515    -    -

Net deferred tax assets/(liabilities)

   932    976    (12 076)    (689)    (11 144)    287

The deferred tax liabilities increased in 2008 mainly as result of the business combination with Anheuser-Busch – see note 6 Acquisition and disposal of subsidiaries .

10 745m US dollar of the net deferred tax liability are expected to be settled after more than 12 months.

On 31 December 2008, a deferred tax liability of 39m US dollar (2007: 50m US dollar) relating to investments in subsidiaries has not been recognized because management believes that this liability will not be incurred in the foreseeable future.

Tax losses carried forward and deductible temporary differences on which no deferred tax asset is recognized amount to 1 439m US dollar (2007: 1 000m US dollar). 916m US dollar of these tax losses do not have an expiration date, 128m US dollar, 70m US dollar and 54m US dollar expire within respectively 1, 2 and 3 years, while 271m US dollar has an expiration date of more than 3 years. Deferred tax assets have not been recognized on these items because it is not probable that future taxable profits will be available against which the unused tax losses can be utilized and the company has no tax planning strategy currently in place to utilize these tax losses.

When reconciling the 2008 deferred tax income of 369m US dollar with the movement from a net deferred tax asset in 2007 to a net deferred tax liability in 2008, it should be noted that this movement is mainly impacted by the acquisition of Anheuser-Busch 11 838m US dollar (see note 6 Acquisitions and disposals of subsidiaries ).

 

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19. INVENTORIES

 

Million US dollar    2008    2007

Prepayments

   93    82

Raw materials and consumables

   1 709    977

Work in progress

   335    159

Finished goods

   664    309

Goods purchased for resale

   102    120
   2 903    1 647

Inventories other than work in progress

     

Inventories stated at net realizable value

   8    7

Carrying amount of inventories subject to collateral

   -    -

The cost of inventories recognized as an expense in 2008 amounted to 10 336m US dollar, included in cost of sales. Last year, this expense amounted to 8 118m US dollar (2006: 6 870m US dollar).

Impairment losses on inventories recognized in 2008 amount to 13m US dollar.

 

20. TRADE AND OTHER RECEIVABLES

NON-CURRENT TRADE AND OTHER RECEIVABLES

 

Million US dollar    2008    2007

Trade receivables

   35    52

Cash deposits for guarantees

   259    343

Loans to customers

   196    262

Other receivables

   360    201
   850    858

For the nature of cash deposits for guarantees see note 32 Collateral and contractual commitments for the acquisition of property, plant and equipment, loans to customers and other .

CURRENT TRADE AND OTHER RECEIVABLES

 

Million US dollar    2008    2007

Trade receivables

   2 778    2 473

Interest receivable

   21    24

Tax receivable, other than income tax

   210    244

Derivative financial instruments with positive fair values

   989    346

Loans to customers

   82    112

Prepaid expenses

   451    375

Accrued income

   28    18

Other receivables

   61    191
   4 620    3 783

 

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The aging of the current trade receivables, interest receivable, other receivables and accrued income and of the loans to customers can be detailed as follows:

 

              Of which not impaired as of the reporting date and past due
 

Net carrying
amount as of
December 31,
2008

 

Of which:

neither
impaired nor

past due on
the reporting
date

  Past due -
less than
30 days
  Past due -
between
30 and 59
days
  Past due -
between
60 and 89
days
  Past due -
between
90 and
179 days
  Past due -
between
180 and
359 days
  Past due -
more than
359 days

Trade receivables

  2 778   2 494   113   29   50   11   78   3

Loans to customers

  278   248   -   3   1   1   3   22

Interest receivable

  21   18   -   -   -   -   -   3

Other receivables and accrued income

  89   89   -   -   -   -   -   -
  3 166   2 849   113   32   51   12   81   28
     

Net carrying
amount as of
December 31,
2007

  Of which:
neither
impaired nor
past due on
the reporting
date
  Of which not impaired as of the reporting date and past due
      Past due -
less than
30 days
  Past due -
between
30 and 59
days
  Past due -
between
60 and 89
days
  Past due -
between
90 and
179 days
  Past due -
between
180 and
359 days
  Past due -
more than
359 days

Trade receivables

  2 473   2 169   191   49   22   25   13   4

Loans to customers

  374   350   1   1   1   1   1   19

Interest receivable

  24   23   -   -   -   -   -   1

Other receivables

  191   191   -   -   -   -   -   -
  3 062   2 733   192   50   23   26   14   24

In accordance with the IFRS 7 Financial Instruments: Disclosures the above analysis of the age of financial assets that are past due as at the reporting date but not impaired also includes the non-current part of loans to customers. Past due amounts were not impaired when collection is still considered likely, for instance because the amounts can be recovered from the tax authorities or AB InBev has sufficient collateral. Impairment losses on trade and other receivables recognized in 2008 amount to 55m US dollar.

AB InBev’s exposure to credit, currency and interest rate risks is disclosed in note 30 Risks arising from financial instruments .

 

21. CASH AND CASH EQUIVALENTS

 

Million US dollar    2008    2007

Short term bank deposits

   1 010    761

Current bank accounts

   1 912    1 179

Cash

   14    9

Cash and cash equivalents

   2 936    1 949

Bank overdrafts

   (765)    (118)
   2 171    1 831

The cash outstanding per 31 December 2008 includes restricted cash for an amount of 500m US dollar. This restricted cash mainly reflects the outstanding consideration payable to former Anheuser-Busch shareholders whom did not yet claim the proceeds. The related payable is recognized as a deferred consideration on acquisitions – see also note 29 Trade and other payables .

 

22. ASSETS AND LIABILITIES HELD FOR SALE

 

Million US dollar    2008    2007

Assets held for sale

   51    60

Liabilities held for sale

     
   51    60

Assets held for sale at 31 December 2008 include 51m US dollar land and buildings, mainly in Brazil and in the US. The disposal of these assets is expected in 2009. No gain or loss with respect to these assets was recognized in 2008.

The 2008 assets held for sale were mainly presented in the following geographical segments: Latin America 31m US dollar and North America 20m US dollar.

 

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2007 assets held for sale included 60m US dollar land and buildings, mainly in Canada and in Brazil. These assets were sold in 2008.

On 23 January 2009, the company disposed of a portion of our investment in Tsingtao Brewery Company Limited, this entity was not classified as held for sale as of 31 December 2008 as not all of the requirements of IFRS 5 Non-current assets held for sale and discontinued operations were met.

 

23. CHANGES IN EQUITY

The table below summarizes the changes in equity that took place during the years 2006, 2007 and 2008:

 

    Attributable to equity holders of AB InBev        
Million US dollar   Issued
capital
  Share
premium
  Treasury
shares
 

Share-

based

payment
reserves

  Trans-
lation
reserves
  Hedging
reserves
  Actuarial
gains/
losses
  Other
reserves
  Retained
earnings
  Total   Minority
interest
  Total
equity
As per 01 January 2006   554   8 652   (78)   76   1 753   (17)   (361)   9   2 944   13 532   447   13 979
Total recognized gains and losses   -   -   -   -   1 159   80   21   -   1 770   3 030   944   3 974
Shares issued   4   98   -   -   -   -   -   -   -   102   -   102
Dividends   -   -   -   -   -   -   -   -   (369)   (369)   (347)   (716)
Share-based payments   -   -   -   10   -   -   -   -   -   10   -   10
Treasury shares   -   -   34   -   -   -   -   (18)   -   16   (13)   3
Other   -   -   -   -   -   -   -   (4)   -   (4)   -   (4)
Scope changes   -   -   -   -   -   -   -   -   (168)   (168)   128   (40)
As per 31 December 2006   558   8 750   (44)   86   2 912   63   (340)   (13)   4 177   16 149   1 159   17 308
    Attributable to equity holders of AB InBev        
Million US dollar   Issued
capital
  Share
premium
  Treasury
shares
 

Share-

based

payment
reserves

  Trans-
lation
reserves
  Hedging
reserves
  Actuarial
gains/
losses
  Other
reserves
  Retained
earnings
  Total   Minority
interest
  Total
equity
As per 01 January 2007   558   8 750   (44)   86   2 912   63   (340)   (13)   4 177   16 149   1 159   17 308
Total recognized income and expenses   -   -   -   -   1 985   27   48   -   3 005   5 065   1 225   6 290
Shares issued   1   52   -   -   -   -   -   -   -   53   -   53
Dividends   -   -   -   -   -   -   -   -   (571)   (571)   (400)   (971)
Share-based payments   -   -   -   31   -   -   -   -   -   31   4   35
Treasury shares   -   -   (659)   -   -   -   -   (7)   -   (666)   (3)   (669)
Other   -   -   -   -   (4)   (1)   -   (5)   10   -   (22)   (22)
Scope changes   -   -   -   -   -   -   -   -   (4)   (4)   (71)   (75)
As per 31 December 2007   559   8 802   (703)   117   4 893   89   (292)   (25)   6 617   20 057   1 892   21 949

 

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Million US dollar   Attributable to equity holders of AB InBev   Minority
interest
  Total
equity
  Issued
capital
  Share
premium
  Treasury
shares
 

Share-

based

payment
reserves

  Trans-
lation
reserves
  Hedging
reserves
  Actuarial
gains/
losses
  Other
reserves
  Retained
earnings
  Total    
As per 01 January 2008   559   8 802   (703)   117   4 893   89   (292)   (25)   6 617   20 057   1 892   21 949
Total recognized income and expenses   -   -   -   -   (3 866)   (2 331)   (420)   -   1 927   (4 690)   924   (3 766)
Shares issued   1 171   8 675   -   -   -   -   -   -   -   9 846   -   9 846
Transaction costs capital increase   -   -   -   -   -   -   -   -   (117)   (117)   -   (117)
Dividends   -   -   -   -   -   -   -   -   (2 010)   (2 010)   (618)   (2 628)
Share-based payments   -   -   -   6   -   -   -   -   -   6   6   12
Treasury shares   -   -   (294)   -   -   -   -   (421)   -   (715)   (1)   (716)
Scope changes   -   -   -   -   -   -   -   -   65   65   (214)   (149)
As per 31 December 2008   1 730   17 477   (997)   123   1 027   (2 242)   (712)   (446)   6 482   22 442   1 989   24 431

STATEMENT OF CAPITAL

2008

 

CAPITAL    Million US dollar    Million shares

Issued capital

     

At the end of the previous year

   559    615

Changes during the year

   1 171    987
   1 730    1 602

 

TREASURY SHARES    Million US dollar    Million shares

At the end of the previous year

   703    9.2

Changes during the year

   294    11.4
   997    20.6

2007

 

CAPITAL    Million US dollar    Million shares

Issued capital

     

At the end of the previous year

   558    613

Changes during the year

   1    2
   559    615

 

TREASURY SHARES    Million US dollar    Million shares

At the end of the previous year

   44    1.1

Changes during the year

   659    8.1
   703    9.2

On 24 November 2008, AB InBev commenced an offering to existing shareholders of new AB InBev shares without nominal value, each with an AB InBev VVPR strip. The purpose of this share capital increase and offering of new AB InBev shares was to refinance part of the bridge facility agreement upon which AB InBev drew in order to finance part of the consideration paid to shareholders of Anheuser-Busch in connection with the acquisition. The offering was initially made to shareholders who were able to lawfully subscribe for new AB InBev shares pro rata to their shareholdings at a subscription price per new share of 6.45 euro. All AB InBev shareholders were granted one preference right per existing share held. The rights entitled the holders thereof to subscribe for new AB InBev shares at the subscription price at the ratio of 8 new AB InBev shares for 5 rights.

Holders of AB InBev shares being granted rights (or subsequent transferees of rights) were entitled to subscribe for new AB InBev shares at the subscription price and in accordance with the ratio described above from 25 November 2008 until 9 December 2008. As of 11 December 2008 approximately 99.58% of the total number of new AB InBev shares offered pursuant to the rights issue, were subscribed for at the subscription price. In addition, on 11 December 2008, in a separate transaction, 2 614 025 remaining preference rights that were not exercised during the subscription period were placed by a group of underwriters in an institutional offering in the form of scripts. As a result of the placement of the remaining preference rights, an additional 4 182 440 new AB InBev shares were subscribed for at the subscription price. The rights, the

 

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new shares and the scripts were all being offered pursuant to exemptions from registration under the securities act of 1933. Settlement of the rights issue occurred on 16 December 2008, with 986 109 272 new AB InBev shares issued in exchange for an aggregate consideration of 8.71b US dollar.

The new AB InBev shares are of the same class as the previously existing shares and started trading on the regulated market of Euronext Brussels on 16 December 2008. As of 16 December 2008, the total number of outstanding AB InBev shares was 1 602 427 569 and AB InBev increased its share capital by 1 171m US dollar.

As at 31 December 2008, the total issued capital of 1 730m US dollar is represented by 1 602 427 569 shares without par value, of which 24 428 160 registered shares, 14 165 542 bearer shares and 1 563 833 867 dematerialized shares. For a total amount of capital of 6m US dollar there are still 5 180 210 of subscription rights outstanding corresponding with a maximum of 5 180 210 shares to be issued. The total of authorized, unissued capital amounts to 17.8m US dollar.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. In respect of the company’s shares that are held by AB InBev, rights are suspended.

REPORT ACCORDING TO ARTICLE 624 OF THE BELGIAN COMPANIES CODE—PURCHASE OF OWN SHARES

Using the powers granted during the Extraordinary Shareholders Meeting of 24 April 2007, the board of directors has executed in 2008 two share buy-back programs of AB InBev shares for a total amount of 1 044m US dollar.

The aim of the programs was at enhancing shareholder value by combining the strong cash-flow generation of the company with the right capital structure. In addition, the programs would allow the company to satisfy its obligations under the new incentive programs for the management.

During the year 2008, AB InBev repurchased, directly or indirectly through an indirect subsidiary, 12 708 793 own shares on the Euronext Brussels Stock Exchange. The Shares were redeemed at the stock price of the day. 932 889 shares were sold to members of the AmBev senior management who were transferred to AB InBev. The sale occurred according to a share exchange program at a price reduced with 16.66 % compared to the market price, in order to encourage management mobility. In addition, 424 933 shares were granted to executives of the group according to the new executive remuneration policy which was approved by the shareholders’ meeting of 25 April 2006. Finally, 3 998 were granted for free to executives according to a matching shares plan of 2005.

At the end of the period, the company still owned 20 563 003 own shares which may be used for management incentive programs, among other uses.

The par value of the shares is 0.77 euro. As a consequence, the shares that were repurchased during the year represent 14 472 499.09 US dollar of the subscribed capital, the shares that were sold during the year 2008 represent 1 550 811.21 US dollar of the subscribed capital and the shares that the company still owned at the end of 2008 represent 22 035 483.25 US dollar of the subscribed capital.

DIVIDENDS

On 4 March 2009, a dividend of 0.28 euro per share or, approximately 450m euro, is proposed by the board of directors. In accordance with IAS 10 Events after the balance sheet date, the dividend has not been recorded in the 2008 financial statements.

TRANSLATION RESERVES

The translation reserves comprise all foreign currency exchange differences arising from the translation of the financial statements of foreign operations. The translation reserves also comprise the portion of the gain or loss on the foreign currency liabilities and on the derivative financial instruments determined to be effective net investment hedges in conformity with the IAS 39 Financial Instruments: Recognition and Measurement hedge accounting rules.

HEDGING RESERVES

The hedging reserves comprise the effective portion of the cumulative net change in the fair value of cash flow hedges to the extent the hedged risk has not yet impacted profit or loss – see also note 30 Risks arising from financial instruments .

TRANSFERS FROM SUBSIDIARIES

The amount of dividends payable to AB InBev by its operating subsidiaries is subject to, among other restrictions, general limitations imposed by the corporate laws, capital transfer restrictions and exchange control restrictions of the respective

 

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jurisdictions where those subsidiaries are organized and operate. Capital transfer restrictions are also common in certain emerging market countries, and may affect AB InBev’s flexibility in implementing a capital structure it believes to be efficient. Dividends paid to AB InBev by certain of its subsidiaries are also subject to withholding taxes. Withholding tax, if applicable, generally does not exceed 10%.

 

24. EARNINGS PER SHARE

The calculation of basic earnings per share is based on the profit attributable to equity holders of AB InBev of 1 927m US dollar (2007: 3 005m US dollar, 2006: 1 770 US dollar) and a weighted average number of ordinary shares outstanding during the year, calculated as follows:

 

Million shares    2008   

2007

restated 1

  

2006

Restated 1

Issued ordinary shares at 1 January, net of treasury shares

   969    979    972

Effect of shares issued / share buy-back programs

   30    (3)    -

Weighted average number of ordinary shares at 31 December

   999    976    972

The calculation of diluted earnings per share is based on the profit attributable to equity holders of AB InBev of 1 927m US dollar (2007: 3 005 US dollar, 2006: 1 770 US dollar) and a weighted average number of ordinary shares (diluted) outstanding during the year, calculated as follows:

 

Million shares    2008   

2007

restated 1

  

2006

Restated 1

Weighted average number of ordinary shares at 31 December

   999    976    972

Effect of share options and warrants

   1    5    8

Weighted average number of ordinary shares (diluted) at 31 December

   1 000    981    980

 

 

1 In Accordance with IAS33, historical data per share have been adjusted by an adjustment ratio of 0.6252 following the capital increase in December 2008.

The calculation of earnings per share before exceptional items is based on the profit after tax and before exceptional items, attributable to equity holders of AB InBev. A reconciliation of profit before exceptional items, attributable to equity holders of AB InBev to profit attributable to equity holders of AB InBev is calculated as follows:

 

Million US dollar    2008    2007    2006

Profit before exceptional items, attributable to equity holders of AB InBev

   2 511    2 547    1 909

Exceptional items, after taxes (refer Note 8)

   (397)    458    (139)

Exceptional finance cost, after taxes, attributable to equity holders of AB InBev

   (187)    -    -

Profit attributable to equity holders of AB InBev

   1 927    3 005    1 770

The table below sets out the EPS calculation:

 

Million US dollar    2008   

2007

restated 1

  

2006

restated 1

Profit attributable to equity holders of AB InBev

   1 927    3 005    1 770

Weighted average number of ordinary shares

   999    976    972

Basic EPS

   1.93    3.08    1.82

Profit before exceptional items, attributable to equity holders of AB InBev

   2 511    2 547    1 909

Weighted average number of ordinary shares

   999    976    972

EPS before exceptional items

   2.51    2.61    1.96

Profit attributable to equity holders of AB InBev

   1 927    3 005    1 770

Weighted average number of ordinary shares (diluted)

   1 000    981    980

Diluted EPS

   1.93    3.06    1.81

Profit before exceptional items, attributable to equity holders of AB InBev

   2 511    2 547    1 909

Weighted average number of ordinary shares (diluted)

   1 000    981    980

Diluted EPS before exceptional items

   2.51    2.60    1.95

The average market value of the company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period that the options were outstanding. 4m share options were anti-dilutive and not included in the calculation of the dilutive effect.

 

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25. INTEREST-BEARING LOANS AND BORROWINGS

This note provides information about the contractual terms of the company’s interest-bearing loans and borrowings. For more information about the company’s exposure to interest rate and foreign currency risk, refer to note 30 Risks arising from financial instruments.

 

NON-CURRENT LIABILITIES

Million US dollar

   2008    2007

Secured bank loans

   57    405

Unsecured bank loans

   39 830    4 368

Unsecured bond issues

   7 912    2 631

Secured other loans

   7    -

Unsecured other loans

   170    211

Finance lease liabilities

   49    18
   48 025    7 633

 

CURRENT LIABILITIES

Million US dollar

   2008    2007

Secured bank loans

   50    141

Unsecured bank loans

   10 723    1 696

Unsecured bond issues

   520    244

Secured other loans

   -    -

Unsecured other loans

   4    26

Secured bank facilities

   -    6

Finance lease liabilities

   4    4
   11 301    2 117

 

TERMS AND DEBT REPAYMENT SCHEDULE 2008

Million US dollar

   Total    1 year
or less
   1-2
years
   2-5
years
   More
than 5
years

Secured bank loans

   108    51    11    46    -

Unsecured bank loans

   50 553    10 723    11 441    28 264    125

Unsecured bond issues

   8 432    520    604    2 344    4 964

Secured other loans

   7    -    -    6    1

Unsecured other loans

   173    4    33    96    40

Finance lease liabilities

   53    4    8    6    35
   59 326    11 302    12 097    30 762    5 165

 

TERMS AND DEBT REPAYMENT SCHEDULE 2007

Million US dollar

   Total    1 year or
less
   1-2
years
   2-5
years
   More than
5 years

Secured bank loans

   548    143    384    21    -

Unsecured bank loans

   6 063    1 694    486    2 947    936

Unsecured bond issues

   2 875    246    230    973    1 426

Unsecured other loans

   237    25    40    110    62

Secured bank facilities

   6    6    -    -    -

Finance lease liabilities

   21    4    3    4    10
   9 750    2 118    1 143    4 055    2 434

 

FINANCE LEASE LIABILITIES

Million US dollar

   Payments
2008
  

Interest

2008

   Principal
2008
   Payments
2007
  

Interest

2007

   Principal
2007

Less than one year

   8    4    4    4    -    4

Between one and five years

   25    11    14    8    1    7

More than five years

   99    64    35    14    3    11
   132    79    53    26    4    22

To finance the acquisition of Anheuser-Busch, AB InBev entered into a 45 billion US dollar senior facilities agreement and a 9.8 billion US dollar bridge facility agreement, enabling us to consummate the acquisition, including the payment of 52.5 billion US dollar to shareholders of Anheuser-Busch, refinancing certain Anheuser-Busch indebtedness, payment of all transaction charges, fees and expenses and accrued but unpaid interest to be paid on Anheuser-Busch’s outstanding indebtedness. On 18 December 2008, AB InBev repaid the debt it incurred under the bridge facility with the net proceeds of the rights issue and cash proceeds received by AB InBev from pre-hedging the foreign exchange rate between the euro and the US dollar in connection with the rights issue. AB InBev intends to refinance a portion of the debt incurred under the senior credit facility with the proceeds of one or more debt capital markets offerings. In addition, AB InBev may, in the future, dispose of certain of the assets or businesses and expects to utilize proceeds from any such disposals to repay indebtedness incurred to finance the acquisition.

 

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AB InBev’s net debt increased to 56 660m US dollar as of December 2008, from 7 497m US dollar as of December 2007. Net debt is defined as non-current and current interest-bearing loans and borrowings and bank overdrafts minus debt securities and cash. Net debt is a financial performance indicator that is used by our management to highlight changes in the company’s overall liquidity position. The company believes that net debt is meaningful for investors as it is one of the primary measures our management uses when evaluating our progress towards deleveraging.

The following table provides a reconciliation of our net debt as of the dates indicated:

 

Million US dollar    31 December
2008
   31 December
2007

Non-current interest bearing loans & borrowings

   48 025    7 633

Current interest bearing loans & borrowings

   11 301    2 117
   59 326    9 750

Bank overdrafts

   765    118

Cash & cash equivalents

   (2 936)    (1 949)

Interest bearing loans granted (included within Trade and other receivables)

   (97)    (31)

Debt securities (included within Investment securities)

   (398)    (391)

Net debt

   56 660    7 497

 

26. EMPLOYEE BENEFITS

AB InBev sponsors various post-employment benefit plans world-wide. These include pension plans, both defined contribution plans, and defined benefit plans, and other post-employment benefits (OPEB). In accordance with IAS 19 Employee Benefits, post-employment benefit plans either are classified as defined contribution plans or defined benefit plans.

DEFINED CONTRIBUTION PLANS

For defined contribution plans, AB InBev pays contributions to publicly or privately administered pension funds or insurance contracts. Once the contributions have been paid, the group has no further payment obligation. The regular contribution expenses constitute an expense for the year in which they are due. For 2008, the defined contribution expenses for the company amounted to 17m US dollar compared to 7m US dollar for 2007 and 8m US dollar for 2006.

DEFINED BENEFIT PLANS

The company contributes to 72 defined benefit plans, of which 57 are retirement plans, 15 are medical cost plans. Most plans provide benefits related to pay and years of service. The German, French, Luxemburg and part of the Belgian, Brazilian, Canadian, UK and US plans are unfunded. The assets of the other plans are held in legally separate funds set up in accordance with applicable legal requirements and common practice in each country. The medical cost plans in Canada, US, Belgium and Brazil provide medical benefits to employees and their families during the service period and after retirement in some cases.

The OPEB plans (including the medical cost plans) have a present value of an unfunded obligation of 874m US dollar.

The present value of funded obligations includes a 142m US dollar liability related to two medical plans, for which the benefits are provided through the Fundação Antonio Helena Zerrenner (“FAHZ”). The FAHZ is a legally distinct entity which provides medical, dental, educational and social assistance to current and retired employees of AmBev. On 31 December 2008, the actuarial liabilities related to the benefits provided by the FAHZ are fully offset by an equivalent amount of assets existing in the fund. The net liability recognized in the balance sheet is nil.

Employee benefit net liability has increased by 2 092m US dollar, as compared to 31 December 2007. The principal factor being the introduction of Anheuser-Busch benefit plans (2 181m US dollar net liability as at 31 December 2008). The net decrease in outstanding employee benefits by 75m US dollar as compared to 31 December 2006 is primarily the effect of contributions paid to pension plans (175m US dollar) and actuarial gains (75m US dollar), partly offset by 2007 expenses (85m US dollar) and exchange losses (7m US dollar).

 

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The company’s net liability for post-employment and long-term employee benefit plans comprises the following at 31 December:

 

Million US dollar    2008    2007

Present value of funded obligations

   (5 355)    (3 299)

Fair value of plan assets

   3 873    3 321

Present value of net obligations for funded plans

   (1 482)    22

Present value of unfunded obligations

   (1 236)    (589)

Present value of net obligations

   (2 718)    (567)

Unrecognized past service cost

   3    4

Unrecognized asset

   (206)    (319)

Net liability

   (2 921)    (882)

Other long term employee benefits

   (80)    (27)

Total employee benefits

   (3 001)    (909)

Employee benefits amounts in the balance sheet:

     

Liabilities

   (3009)    (919)

Assets

   8    10

Net liability

   (3 001)    (909)

The changes in the present value of the defined benefit obligations are as follows:

 

Million US dollar    2008    2007    2006

Defined benefit obligation at 1 January

   (3 888)    (3 558)    (3 337)

Current service costs

   (93)    (94)    (87)

Acquisitions through business combinations

   (3 750)    -    -

New unvested past service cost

   (2)    -    13

Interest cost

   (250)    (205)    (192)

Actuarial losses

   (87)    183    (21)

(Losses)/Gains on curtailments

   (17)    1    1

Reclassifications from provisions

   31    5    -

Reclassifications to assets held for sale

   -    -    24

Exchange differences

   871    (435)    (230)

Benefits paid

   594    215    271

Defined benefit obligation at 31 December

   (6 591)    (3 888)    (3 558)

The changes in the fair value of plan assets are as follows:

 

Million US dollar    2008    2007    2006

Fair value of plan assets at 1 January

   3 321    2 804    2 365

Acquisitions through business combinations

   2 030    -    -

Expected return

   262    242    212

Actuarial gains and (losses)

   (606)    (78)    87

Contributions by AB InBev

   207    175    222

Contributions by plan participants

   13    15    14

Exchange differences

   (743)    378    175

Assets distributed on settlement

   -    -    (70)

Other

   16    -    -

Benefits paid

   (627)    (215)    (201)

Fair value of plan assets at 31 December

   3 873    3 321    2 804

The acquisition through business combinations stems from the acquisition of Anheuser-Busch.

The actual return on plan assets in 2008, 2007 and 2006 was a 355m US dollar loss, 164m US dollar gain and 299m US dollar gain, respectively. This is mostly driven by actuarial losses calculated in the UK, US, Belgium and Canada.

The increase in contributions by AB InBev (207m US dollar in 2008 versus 175m US dollar in 2007 and 222m US dollar in 2006) is primarily explained by the acquisition of Anheuser-Busch (70m US dollar), although lower contributions occurred in Canada and Korea.

 

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The expense recognized in the income statement with regard to defined benefit plans can be detailed as follows:

 

Million US dollar    2008    2007    2006

Current service costs

   (68)    (68)    (74)

Interest cost

   (250)    (205)    (192)

Expected return on plan assets

   260    242    212

Amortized past service cost

   -    (8)    (1)

New vested past service cost

   (10)    (10)    1

Recognized past service cost

   (2)    -    -

(Losses)/Gains on settlements or curtailments

   (23)    1    -

Asset limitation

   (26)    (37)    (29)
   (119)    (85)    (83)

The employee benefit expense is included in the following line items of the income statement:

 

Million US dollar   2008     2007     2006  

Cost of sales

  (31   (21   (21

Distribution expenses

  (20   (18   (16

Sales and marketing expenses

  (10   (11   (16

Administrative expenses

  (34   (29   (25

Exceptional items

  (24   (6   (5
  (119   (85   (83

Weighted average assumptions used in computing the benefit obligations at the balance sheet date are as follows 1 :

 

       2008    2007    2006

Discount rate

   6.5%    4.9%    4.3%

Future salary increases

   3.3%    3.1%    2.4%

Future pension increases

   2.2%    1.8%    1.1%

Medical cost trend rate

   8.95% p.a. reducing to
6.63%
   6.5% p.a. reducing to

3.8%

   6.5% p.a. reducing to

3.1%

Dental claims trend rate

   4.0%    4.1%    3.9%

Life expectation for a 40 year old male

   81    81    81

Life expectation for a 40 year old female

   85    85    85

Weighted average assumptions used in computing the net periodic pension cost for the year are as follows 1 :

 

       2008    2007    2006

Discount rate

   4.9%    4.3%    4.1%

Expected return on plan assets

   6.2%    6.6%    6.3%

Future salary increases

   3.1%    2.4%    2.3%

Future pension increases

   1.8%    1.1%    0.8%

Medical cost trend rate

   6.5% p.a. reducing to

3.8%

   6.5% p.a. reducing to

3.1%

   5.0% p.a. reducing to

2.1%

Dental claims trend rate

   4.1%    3.9%    3.6%

Several factors are considered in developing the estimate for the long-term expected rate of return on plan assets. For the defined benefit plans, these include historical rates of return of broad equity and bond indices and projected long-term rates of return from pension investment consultants. The expected long-term rates of return for plan assets are 7.3% for equities and 5% for bonds.

Assumed medical cost trend rates have a significant effect on the amounts recognized in profit or loss. A one percentage point change in the assumed medical cost trend rates would have the following effects (note that a positive amount refers to a decrease in the obligations or cost while a negative amount refers to an increase in the obligations or cost):

 

Million US dollar    2008    2007    2006
Medical cost trend rate    100 basis
points
increase
   100 basis
points
decrease
   100 basis
points
increase
   100 basis
points
decrease
   100 basis
points
increase
   100 basis
points
decrease
Effect on the aggregate of the service cost and interest cost of medical plans    (4)    4    (6)    4    (4)    4
Effect on the defined benefit obligation for medical cost    (38)    32    (56)    49    (43)    37

 

1 Since the assumptions are nominal rates in different currencies the company has converted the foreign rates into US dollar equivalents based on the 5 year forward currency exchange rates. The weighted average assumptions are calculated based on these US dollar equivalents.

 

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To meet the IAS 1 Presentation of Financial Statements disclosure requirements on key sources of estimation uncertainty the company has included the results of the sensitivity analysis with regard to the discount rate, the future salary increase and the longevity assumptions.

 

Million US dollar    2008    2007    2006

Discount rate

   50 basis
points
increase
   50 basis
points
decrease
   50 basis
points
increase
   50 basis
points
decrease
   50 basis
points
increase
   50 basis
points
decrease

Effect on the aggregate of the service cost and interest cost of defined benefit plans

   3    (3)    4    (4)    5    (5)

Effect on the defined benefit obligation

   156    (173)    259    (283)    248    (267)
Million US dollar    2008    2007    2006

Future salary increase

   50 basis
points
increase
   50 basis
points
decrease
   50 basis
points
increase
   50 basis
points
decrease
   50 basis
points
increase
   50 basis
points
decrease

Effect on the aggregate of the service cost and interest cost of defined benefit plans

   (4)    3    (4)    4    (7)    7

Effect on the defined benefit obligation

   (25)    22    (34)    31    (51)    49
Million US dollar    2008    2007    2006

Longevity

   One year
increase
   One year
decrease
   One year
increase
   One year
decrease
   One year
increase
   One year
decrease

Effect on the aggregate of the service cost and interest cost of defined benefit plans

   (7)    7    (7)    7    (7)    7

Effect on the defined benefit obligation

   (65)    64    (105)    103    (95)    94

The above are purely hypothetical changes in individual assumptions holding all other assumptions constant: economic conditions and changes therein will often affect multiple assumptions at the same time and the effects of changes in key assumptions are not linear. Therefore, the above information is not necessarily a reasonable representation of future results.

The fair value of plan assets at 31 December consists of the following:

 

       2008    2007

Government bonds

   15%    35%

Corporate bonds

   18%    11%

Equity instruments

   60%    51%

Property

   4%    1%

Cash

   2%    1%

Insurance contracts

   1%    1%
   100%    100%

The changed allocation of the fair value of plan assets is mainly as a result of the acquisition of Anheuser-Busch plans.

The plan assets include indirect investments in ordinary shares issued by the company for a total fair value of 1.4m US dollar. The expected rates of return on individual categories of plan assets are determined by reference to relevant indices based on advice of external valuation experts. The overall expected rate of return is calculated by weighting the individual rates in accordance with the anticipated share in the total investment portfolio.

The five year history of the present value of the defined benefit obligations, the fair value of the plan assets and the deficit in the plans is as follows:

 

Million euro    2008    2007    2006    2005    2004

Present value of the defined benefit obligations

   (6 591)    (3 888)    (3 558)    (3 337)    (2 952)

Fair value of plan assets

   3 873    3 321    2 804    2 365    2 062

Deficit

   (2 718)    (567)    (754)    (972)    (890)

Experience adjustments: (increase)/decrease plan liabilities

   289    32    (8)    (39)    -

Experience adjustments: increase/(decrease) plan assets

   (606)    (78)    87    157    147

The deficit has increased to 2 718m US dollar with the Anheuser-Busch benefit plans contributing a deficit of 2 181m US dollar.

AB InBev expects to contribute approximately 273m US dollar to its defined benefit plans in 2009.

 

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27. SHARE-BASED PAYMENTS

Different share option programs allow company senior management and members of the board of directors to acquire shares of AB InBev or AmBev. AB InBev has two primary share-based compensation plans, the long-term incentive plan (“LTI”) and the share-based compensation plan (“Share-Based Compensation Plan”). For both plans, the fair value of share-based payment compensation is estimated at grant date, using the binomial Hull model, modified to reflect the IFRS 2 Share-based Payment requirement that assumptions about forfeiture before the end of the vesting period cannot impact the fair value of the option.

SHARE-BASED COMPENSATION PLAN

The Share-Based Compensation Plan provides that members of our executive board of management and certain other senior employees are granted bonuses, half of which is settled in shares to be held for three years, the shares being valued at their market price at the time of grant. With respect to the other half the bonus, participants may elect to receive cash or to invest all or half of the remaining part of their bonus in shares to be held for five years. Such voluntary deferral leads to a company option match, which vests after five years, provided that predefined financial targets are met or exceeded. If the remaining half is completely invested in shares, the number of matching options granted will be equal to 4.6 times the number of shares corresponding to the gross amount of the bonus invested. If the remaining half is invested at 50 % in shares, the number of matching options granted will be equal to 2.3 times the number of shares corresponding to the gross amount of the bonus invested. Upon exercise, holders of the matching options may be entitled to receive from AB InBev a cash payment equal to the dividends declared since the options were granted. The fair value of the matching options is estimated at the grant date using a binomial Hull model, and is expensed over the vesting period. These options have a life of 10 years.

AB InBev issued a total of 1m of matching options in 2008 representing a fair value of approximately 36m US dollar.

LONG-TERM INCENTIVE PLAN

The company has issued warrants, or rights to subscribe for newly issued shares, under the LTI for the benefit of directors and, until 2006, members of the executive board of management and other senior employees. Since 2007, members of the executive board of management and other employees are no longer eligible to receive warrants under the LTI, but instead receive a portion of their compensation in the form of shares and options granted under the Share-Based Compensation Plan. Each LTI warrant gives its holder the right to subscribe for one newly issued share. The exercise price of LTI warrants is equal to the average price of the company’s shares on the regulated market of Euronext Brussels during the 30 days preceding their issue date. LTI warrants granted in the years prior to 2007 have a duration of 10 years and from 2007 (and in 2003) have a duration of 5 years. LTI warrants are subject to a vesting period ranging from one to three years. During 2008, 0.1m warrants were granted to members of the board of directors. These warrants vest in equal annual installments over a three-year period and represent a fair value of approximately 3m US dollar.

In addition to awards granted under the plans described above, the company offered stock options to a small group of senior executives on 25 November 2008. AB InBev believes that the selected executives will help implement a successful integration of Anheuser-Busch Companies, Inc. and AB InBev, which will underpin AB InBev’s ability to quickly deleverage. The number of options offered was 28.9m, with an estimated fair value of 230m US dollar. One-half of these stock options have a life of 10 years as from granting and vest on 1 January 2014. The other half of the stock options have a life of 15 years as from granting and vest on 1 January 2019. Vesting is conditional upon achievement of certain predefined financial targets.

The weighted average fair value of the options and assumptions used in applying the AB InBev option pricing model for the 2008 grants of awards described above are as follows:

 

Amounts in US dollar unless otherwise indicated    2008    2007    2006 1

Fair value of options granted

   38.17    31.15    16.52

Share price

   90.58    77.59    47.94

Exercise price

   86.62    72.53    47.90

Expected volatility

   24%    20%    23%

Expected dividends

   0.16%    0.16%    0.58%

Risk-free interest rate

   4.47%    4.47%    4.21%

Since the acceptance period of the options is 2 months, the fair value was determined as the average of the fair values calculated on a weekly basis during the two months offer period.

Expected volatility is based on historical volatility calculated using 1 068 days of historical data. The binomial Hull model assumes that all employees would immediately exercise their options if the AB InBev share price is 2.5 times above the exercise price. As a result, no single expected option life applies.

 

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The total number of outstanding options at 31 December 2008 and changes during the year for both the Share-Based Compensation Plan and the LTI:

 

Million options    2008    2007    2006

Options outstanding at 1 January

   6.3    7.6    10.9

Options issued during the year

   1.1    1.0    1.2

Options exercised during the year

   (1.2)    (1.6)    (3.4)

Options forfeited during the year

   (0.4)    (0.7)    (1.1)

Additional options granted as a result of the rights issue

   3.0    -    -

Options outstanding at 31 December

   8.8    6.3    7.6

 

1 Changes in 2006 assumptions are the result of change in volatility approach and dividend protection.

As a consequence of the rights issue that took place in November 2008 (as described in Note 23), the exercise price and the number of options held by employees of the company were adjusted under both plans with the intention of preserving the rights of the existing option holders. The terms and conditions of the new subscription rights are the same as those of the existing subscription rights to which they relate. For vesting purposes, they are treated as if they have been issued at the same time as the existing subscription right, and are exercisable in the same manner and under the same conditions. The company accounted for the dilutive effect of the rights issuance by applying the ratio method as set out in the NYSE Euronext “ Liffe’s Harmonised Corporate Actions Policy ” pursuant to which both the number of existing subscription rights and the exercise price were adjusted by a ratio of 0.6252. The adjusted exercise price of the subscription rights equals the original exercise price multiplied by the adjustment ratio. The adjusted number of subscription rights equals the original number of subscription rights divided by the adjustment ratio. As a result, during the fourth quarter of 2008, 3.0m additional options (1.4 million and 1.6 million options under the Share-based Compensation Plan and the LTI, respectively) were granted to employees in order to compensate for the dilutive effect of the rights issue. As there was no change between the fair value of the original award immediately before the modification and the fair value of the modified award immediately after the modification, no additional expense was recorded as a result of the modification.

The range of exercise prices of the outstanding options is between 7.28 euro and 58.31 euro while the weighted average remaining contractual life is 6.2 years.

Of the 8.8m outstanding options 4.1m options are vested at 31 December 2008.

The weighted average exercise price of the options for both the Share-Based Compensation Plan and the LTI is as follows:

 

Amounts in US dollar    2008    2007    2006

Options outstanding at 1 January

   46.50    35.48    31.92

Granted during the period (pre rights issue)

   76.92    79.38    51.74

Granted during the period (adjustment factor)

   32.87    -    -

Forfeited during the period

   56.63    45.00    31.12

Exercised during the period

   32.76    35.52    31.21

Outstanding at the end of the period

   34.42    46.50    35.48

Exercisable at the end of the period

   23.66    36.39    32.82

For share options exercised during 2008 the weighted average share price at the date of exercise was 31.49 euro.

AMBEV SHARE-BASED COMPENSATION PLAN

Since 2005, AmBev has had a plan which is substantially similar to the Share-Based Compensation Plan under which bonuses granted to company employees and management are partially settled in shares. Under this plan, AmBev has issued during the second quarter of 2008 0.8m options for which the fair value amounts to approximately 35m US dollar. The fair value of the options and assumptions used in applying a binomial option pricing model for the 2008 AmBev grant are as follows:

 

Amounts in US dollar unless otherwise indicated    2008    2007    2006

Fair value of options granted

   44.51    25.03    21.07

Share price

   71.48    61.83    48.73

Exercise price

   71.48    61.83    48.73

Expected volatility

   33%    26%    30%

Risk-free interest rate

   12.50%    10.60%    14.47%

As the AmBev options are dividend protected, the dividend yield used for the fair value calculation was 0%.

During the second half of 2007, AmBev performed a reverse stock split in the ratio of 100:1. Consequently, the 2007 and 2006 figures have been restated to consider the impact of this adjustment.

 

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The total number of outstanding AmBev options developed as follows:

 

Million options    2008    2007    2006

Options outstanding at 1 January

   2.2    2.4    3.5

Options issued during the year

   0.8    0.8    0.8

Options exercised during the year

   (0.1)    (0.6)    (1.5)

Options forfeited during the year

   (0.1)    (0.4)    (0.4)

Options outstanding at 31 December

   2.8    2.2    2.4

The range of exercise prices of the outstanding options is between 16.64 euro and 41.26 euro while the weighted average remaining contractual life is 3.7 years.

Of the 2.8m outstanding options 0.5m options are vested at 31 December 2008.

The weighted average exercise price of the options is as follows:

 

Amounts in US dollar    2008    2007    2006

Options outstanding at 1 January

   49.21    30.54    23.84

Granted during the period

   57.42    61.45    47.43

Forfeited during the period

   33.69    32.22    23.60

Exercised during the period

   40.62    35.95    25.47

Outstanding at the end of the period

   42.07    49.21    30.54

Exercisable at the end of the period

   23.62    28.60    23.10

During the fourth quarter of 2008, a limited number of AmBev shareholders who are part of the senior management of AB InBev were given the opportunity to exchange AmBev shares against a total of 0.9m AB InBev shares (2007: 1.8m – 2006: 1.5m) at a discount of 16.7% provided that they stay in service for another five years. The fair value of this transaction amounts to approximately 11m US dollar (2007: 25m US dollar - 2006: 13m euro) and is expensed over the five years service period. The fair values of the AmBev and AB InBev shares were determined based on the market price.

The above described share-based payment transactions resulted in a total expense of 62m US dollar for the year 2008, 72m US dollar for the year 2007 and 61m US dollar for the year 2006.

 

28. PROVISIONS

2008

 

Million US dollar    Restructuring    Disputes    Other    Total

Balance at 1 January

   296    651    82    1 029

Effect of changes in foreign exchange rates

   4    (120)    (26)    (142)

Changes through business combinations

   20    126    -    146

Provisions made

   344    216    44    604

Provisions used

   (152)    (102)    (11)    (265)

Provisions reversed

   (35)    (91)    (14)    (140)

Other movements

   (16)    (37)    75    22

Balance at 31 December

   461    643    150    1 254

2007

 

Million US dollar    Restructuring    Disputes    Other    Total

Balance at 1 January

   374    452    97    923

Effect of changes in foreign exchange rates

   31    93    7    131

Changes through business combinations

   -    126    -    126

Provisions made

   170    182    18    370

Provisions used

   (217)    (94)    (10)    (321)

Provisions reversed

   (72)    (120)    (33)    (225)

Other movements

   10    12    3    25

Balance at 31 December

   296    651    82    1 029

The restructuring provisions are primarily explained by the organizational alignments in the US, Western Europe, the global headquarters and Asia Pacific as explained in note 8 Exceptional items . Provisions for disputes mainly relate to various disputed direct and indirect taxes and to claims from former employees.

 

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The provisions are expected to be settled within the following time windows:

2008

 

Million US dollar    Total    < 1 year    1-2 years    2-5 years    > 5 years

Restructuring

              

Reorganization

   461    366    43    35    17

Disputes

              

Excise duties

   20    -    3    17    -

Income taxes

   238    1    237    -    -

Labor

   114    15    92    6    1

Indirect taxes

   172    13    159    -    -

Commercial

   41    18    11    8    4

Other disputes

   58    19    32    7    -
   643    66    534    38    5

Other contingencies

              

Guarantees given

   26    1    10    15    -

Onerous contracts

   24    7    4    7    6

Other contingencies

   100    18    4    6    72
   150    26    18    28    78
   1 254    458    595    101    100

2007

 

Million US dollar    Total    < 1 year    1-2 years    2-5 years    > 5 years

Restructuring

              

Reorganization

   296    166    69    43    18

Disputes

              

Excise duties

   1    -    1    -    -

Income taxes

   98    6    91    1    -

Labor

   164    29    44    91    -

Indirect taxes

   233    15    62    138    18

Commercial

   57    19    16    16    6

Other disputes

   98    18    12    9    59
   651    87    226    255    83

Other contingencies

              

Demolition

   4    4    -    -    -

Guarantees given

   22    -    -    21    1

Onerous contracts

   11    1    -    1    9

Other

   45    17    4    10    14
   82    22    4    32    24
   1 029    275    299    330    125

Since 1 January 2005, AB InBev is subject to the greenhouse gas emission allowance trading scheme in force in the European Union. Acquired emission allowances are recognized at cost as intangible assets. To the extent that it is expected that the number of allowances needed to settle the CO 2 emissions exceed the number of emission allowances owned, a provision is recognized. Such a provision is measured at the estimated amount of the expenditure required to settle the obligation. At 31 December 2008, the emission allowances owned fully covered the expected CO 2 emissions. As such, no provision needed to be recognized.

 

29. TRADE AND OTHER PAYABLES

NON-CURRENT TRADE AND OTHER PAYABLES

 

Million US dollar    2008    2007

Indirect taxes payable

   249    349

Trade payables

   7    1

Cash guarantees

   14    9

Deferred consideration on acquisitions

   113    24

Other payables

   16    79
   399    462

 

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CURRENT TRADE AND OTHER PAYABLES

 

Million US dollar    2008    2007

Trade payables and accrued expenses

   4 801    3 209

Payroll and social security payables

   643    517

Indirect taxes payable

   1 097    1 210

Interest payable

   477    130

Consigned packaging

   551    501

Cash guarantees

   25    29

Derivative financial instruments with negative fair values

   3 126    708

Dividends payable

   63    46

Deferred income

   152    15

Deferred consideration on acquisitions

   522    40

Other payables

   38    87
   11 495    6 492

The increase in derivative financial instruments with negative fair values is explained by the fair value revaluation of US dollar interest rate swaps and commodity hedges. The interest rate swaps cover the interest rate risk on the senior facilities agreement to finance the acquisition of Anheuser-Busch.

Deferred consideration on acquisitions mainly reflects the outstanding consideration payable to former Anheuser-Busch shareholders whom did not yet claim the proceeds.

 

30. RISKS ARISING FROM FINANCIAL INSTRUMENTS

 

(A) TERMS, CONDITIONS AND RISK MANAGEMENT POLICIES

Exposure to foreign currency, interest rate, commodity prices, liquidity and credit risk arises in the normal course of AB InBev’s business. The company analyses each of these risks individually as well as on an interconnected basis, and defines strategies to manage the economic impact on the company’s performance in line with its financial risk management policy. The risk management committee meets on a frequent basis and is responsible for reviewing the results of the risk assessment, approving recommended risk management strategies, monitoring compliance with the financial risk management policy and reporting to the finance committee of the board of directors.

Some of the company’s risk management strategies include the usage of derivatives. Derivative instruments used by the company mainly include forward exchange contracts, exchange traded foreign currency futures, interest rate swaps, cross currency interest rate swaps (“CCIRS”), forward rate agreements, exchange traded interest rate futures, aluminum swaps and forwards, exchange traded sugar futures and exchange traded wheat futures. AB InBev’s policy prohibits the use of derivatives in the context of speculative trading.

The following table provides an overview of the derivative financial instruments outstanding at year-end by maturity bucket. The amounts included in this table are the notional amounts.

 

Million US dollar

Derivatives

   2008    2007
   < 1 year    1-5 years    > 5 years    < 1 year    1-5 years    > 5 years

Foreign currency

                 

Forward exchange contracts

   1 943    778    -    1 303    602    -

Foreign currency futures

   (216)    21    -    564    -    -

Interest rate

                 

Interest rate swaps

   1 784    41 047    4 552    -    2 229    203

Cross currency interest rate swaps

   270    2 609    113    823    3 537    96

Forward rate agreements

   3 062    -    -    102    -    -

Interest rate futures

   (95)    (118)    (8)    440    200    59

Commodities

                 

Aluminum swaps

   348    6    -    268    -    -

Sugar futures

   51    17    -    60    -    -

Wheat futures

   24    -    -    18    -    -

Credit

                 

Credit default swaps

   -    84    -    -    88    -

Forward exchange contracts include the series of contracts used to hedge the Brazilian real borrowings in Canada (see Interest rate risk section below).

 

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The significant increase in the interest rate swaps is explained by the new swap contracts used to hedge the interest rate risk on the senior facilities to acquire Anheuser-Busch.

The forward rate agreement is related to a hedge on a credit facility in the parent companies.

 

(B) FOREIGN CURRENCY RISK

AB InBev incurs foreign currency risk on borrowings, investments, (forecasted) sales, (forecasted) purchases, royalties, dividends, licenses, management fees and interest expense/income whenever they are denominated in a currency other than the functional currency of the subsidiary. The main derivative financial instruments used to manage foreign currency risk are forward exchange contracts, exchange traded foreign currency futures and cross currency interest rate swaps.

FOREIGN EXCHANGE RISK ON OPERATING ACTIVITIES

As far as foreign currency risk on firm commitments and forecasted transactions is concerned, AB InBev’s policy is to hedge operational transactions which are reasonably expected to occur (e.g. cost of goods sold and selling, general & administrative expenses) within a maximum of 15 months. Operational transactions that are certain (e.g. capital expenditure) are hedged without any limitation in time.

The table below provides an indication of the company’s main net foreign currency positions as regards firm commitments and forecasted transactions per 31 December 2008 and for a period of 1 year for the most important currency pairs. The open positions are the result of the application of AB InBev’s risk management policy. Positive amounts indicate that the company is long (net future cash inflows) in the first currency of the currency pair while negative amounts indicate that the company is short (net future cash outflows) in the first currency of the currency pair. The second currency of the currency pairs listed is the functional currency of the related subsidiary.

 

     2008    2007
Million US dollar    Total
exposure
   Total
Derivatives
   Open
Position
   Total
exposure
   Total
derivatives
   Open
position

Canadian dollar / US dollar

   (21)    21    -    -    -    -

Euro / Argentinean peso

   (60)    60    -    -    -    -

Euro / Brazilian real

   (3)    3    -    10    (10)    -

Euro / Canadian dollar

   (3)    10    7    (28)    28    -

Euro / Czech koruna

   14    (14)    -    16    (16)    -

Euro / Hungarian forint

   (43)    40    (3)    (28)    28    -

Euro / Pound sterling

   (28)    28    -    (41)    41    -

Euro / Romanian lei

   (131)    114    (17)    -    -    -

Euro / Russian ruble

   (295)    185    (110)    (191)    -    (191)

Euro / Serbian dinar

   (18)    -    (18)    -    -    -

Euro / Ukrainian hryvnia

   (135)    39    (96)    (62)    -    (62)

Euro / US dollar

   (278)    270    (8)    -    -    -

US dollar / Argentinean peso

   (246)    246    -    (147)    147    -

US dollar / Bolivian boliviano

   -    -    -    (29)    29    -

US dollar / Brazilian real

   404    (404)    -    156    (156)    -

US dollar / Canadian dollar

   (7)    7    -    (68)    68    -

US dollar / Chilean peso

   (11)    11    -    (13)    13    -

US dollar / Euro

   466    (466)    -    162    (162)    -

US dollar / Paraguayan guarani

   (32)    32    -    -    -    -

US dollar / Peruvian nuevo sol

   -    -    -    (10)    10    -

US dollar / Pound sterling

   (31)    31    -    (6)    6    -

US dollar / Russian ruble

   (313)    146    (167)    (141)    -    (141)

US dollar / South Korean won

   -    -    -    (4)    4    -

US dollar / Ukrainian hryvnia

   (68)    43    (25)    (6)    -    (6)

US dollar / Uruguayan peso

   (17)    17    -    (22)    22    -

The rationale behind the open currency exposures primarily reported in Russia, Ukraine and Romania is further explained in the Currency sensitivity analysis below.

In conformity with the IAS 39 hedge accounting rules, these hedges of firm commitments and highly probable forecasted transactions denominated in foreign currency are designated as cash flow hedges.

FOREIGN EXCHANGE RISK ON INTRAGROUP LOANS

A series of foreign exchange swaps were contracted in 2008 to hedge the foreign currency risk from intercompany loans transacted between group entities that have different functional currencies. Intercompany loans with Hungary, Russia and UK were hedged against euro for respectively 12 000m Hungarian forint, 3 700m Russian ruble and 17m pound sterling.

 

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In conformity with IAS 39, except for the Russian ruble cross currency interest rate swap, these swaps were designated as cash flow hedges of intragroup monetary items.

FOREIGN EXCHANGE RISK ON NET INVESTMENTS IN FOREIGN OPERATIONS

The company used euro/pound sterling cross currency interest rate swaps (notional amount of 180m pound sterling) to hedge the foreign currency risk from the net investment in the UK subsidiary Nimbuspath.

In conformity with IAS 39, these CCIRS’s were designated as net investment hedges.

In January 2008, the company entered into a euro floating / Brazilian real floating cross currency interest rate swap for a notional amount of 256m Brazilian real maturing in 2012 to hedge the foreign currency risk from AB InBev’s net investment in AmBev Brazil. This cross currency interest rate swap comes in addition to the cross currency interest rate swaps entered in 2007 for an amount of 1 035m Brazilian real.

In conformity with IAS 39, these derivative instruments were designated as net investment hedges.

In November 2008, the parent company borrowed 18b US dollar under the senior facility. This loan is considered to be the hedging instrument in a hedging relationship where the investment in the net equity of Anheuser-Busch is considered to be the hedged item.

In conformity with IAS 39, this loan was designated as a net investment hedge.

 

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FOREIGN EXCHANGE RISK ON FOREIGN CURRENCY DENOMINATED DEBT

As far as foreign currency risk on borrowings is concerned, it is AB InBev’s policy to have the debt in the subsidiaries as much as possible in the functional currency of the subsidiary. To the extent this is not the case, hedging is put in place unless the cost to hedge outweighs the benefits. A description of the foreign currency risk hedging related to the debt instruments issued in a currency other than the functional currency of the subsidiary (including the private placements, the US dollar bonds and the Brazilian real borrowing) is further detailed in the Interest rate risk section below.

CURRENCY SENSITIVITY ANALYSIS

Currency translational risk

Around 57% of AB InBev’s revenue is generated by subsidiaries, referred to as foreign operations, of which the activities are conducted in a currency other than the US dollar. A currency translation risk arises when the financial data of these foreign operations are converted in AB InBev’s presentation currency, the US dollar. On the basis of the volatility of these currencies against the US dollar in 2008, the company estimated the reasonably possible change of the exchange rate of these currencies against the US dollar as follows 1 :

 

    2008   2007
1 US dollar equals:  

Closing rate

31 December
2008

 

Average
rate

2008

  Possible closing rate
31 December 2008
  Possible average
rate 2008
 

Possible
volatility

of rates in %

 

Possible
volatility

of rates in %

Argentinean peso

  3.45   3.14   3.12 to 3.78   2.84 - 3.44   9.59%   10.92%

Bolivian boliviano

  7.07   7.18   6.32 - 7.82   6.42 - 7.94   10.63%   28.47%

Brazilian real

  2.34   1.79   1.24 - 3.43   0.95 - 2.63   46.88%   22.67%

Canadian dollar

  1.22   1.05   0.90 - 1.54   0.78 - 1.33   26.20%   14.67%

Chinese yuan

  6.82   7.05   6.55 - 7.09   6.77 - 7.33   3.97%   9.87%

Paraguayan guarani

  4 921.55   4 333.70   3 945.51 - 5 897.59   3 474.24 - 5 193.16   19.83%   14.07%

Pound sterling

  0.68   0.54   0.53 - 0.84   0.41 - 0.66   22.91%   8.33%

Romanian lei

  2.89   2.49   1.94 - 3.85   1.67 - 3.31   33.03%   12.03%

Russian ruble

  29.78   24.78   25.50 - 34.05   21.22 - 28.34   14.35%   5.57%

South Korean won

  1 320.86   1 078.27   713.50 - 1 928.21   582.46 - 1 574.09   45.98%   11.70%

Serbian dinar

  63.66   54.95   48.61 - 78.71   41.96 - 67.94   23.64%   4.05%

Ukrainian hryvnia

  7.80   5.19   3.43 - 12.17   2.28 - 8.10   56.05%   11.30%

Euro

  0.72   0.68   0.55 - 0.88   0.52 - 0.84   22.93%   10.01%
           
    2007   2006
1 US dollar equals:  

Closing rate

31 December
2007

 

Average
rate

2007

  Possible closing rate
31 December 2007
  Possible average
rate 2007
 

Possible
volatility

of rates in %

 

Possible
volatility

of rates in %

Argentinean peso

  3.15   3.12   2.81 - 3.50   2.78 - 3.46   10.92%   2.93%

Bolivian boliviano

  7.67   7.92   5.49 - 9.85   5.67 - 10.18   28.47%   -

Brazilian real

  1.77   1.95   1.37 - 2.17   1.51 - 2.39   22.67%   18.65%

Canadian dollar

  0.98   1.07   0.84 - 1.13   0.91 - 1.23   14.67%   9.8%

Chinese yuan

  7.3   7.6   6.58 - 8.03   6.85 - 8.35   9.87%   -

Paraguayan guarani

  4 852.16   5 077.7   4 169.67 - 5 534.64   4 363.49 - 5 791.91   14.07%   -

Pound sterling

  0.5   0.5   0.46 - 0.54   0.46 - 0.54   8.33%   10.44%

Romanian lei

  2.45   2.41   2.16 - 2.75   2.12 - 2.70   12.03%   -

Russian ruble

  24.41   25.58   23.05 - 25.77   24.16 - 27.01   5.57%   4.53%

South Korean won

  935.68   925.56   826.21 - 1 045.15   817.27 – 1 033.84   11.70%   8.13%

Serbian dinar

  53.83   58.6   51.65 - 56.01   56.23 - 60.97   4.05%   -

Ukrainian hryvnia

  5.04   5.04   4.47 - 5.61   4.47 - 5.60   11.30%   -

Euro

  0.68   0.73   0.61 - 0.75   0.66 - 0.80   10.01%   9.69%

If the US dollar had weakened/strengthened during 2008 by the above estimated possible changes against the above listed currencies with all other variables held constant, the 2008 profit would have been 854m US dollar (27.3%) higher/lower while the translation reserves in equity would have been 4 972m US dollar higher/lower.

 

1 The estimate is based on the standard deviation of daily volatilities of the foreign exchange rates during the past 250 days at 31 December 2008 and using a 95% confidence interval.

 

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Currency transactional risk

Most of AB InBev’s non-derivative monetary financial instruments either are denominated in the functional currency of the subsidiary or are converted into the functional currency through the use of derivatives. However, the company has open positions in Central and Eastern European countries for which no hedging is performed because the illiquidity of the local foreign exchange market prevents us from hedging at a reasonable cost. The transactional foreign currency risk mainly arises from open positions in Russia, Ukraine, Serbia and Romania against the euro and the US dollar. On the basis of the average volatility of the Ukrainian hryvnia, the Russian ruble, the Serbian dinar and the Romanian lei against the euro and the US dollar during the year, the company estimated the reasonably possible change of exchange rate of these currencies as follows:

 

     2008    2007
      

Closing rate

31 December
2008

   Possible
closing rate
31 December
2008
  

Possible
volatility

of rates in %

  

Possible
volatility

of rates in %

Euro / Russian ruble

   41.44    35.47 - 47.41    14.41%    5.64%

Euro / Serbian dinar

   88.60    83.00 - 94.19    6.31%    4.05%

Euro / Ukrainian hryvnia

   10.86    3.74 - 17.97    65.51%    11.30%

Euro / Romanian lei

   4.02    3.23 - 4.82    19.77%    12.03%

US dollar / Russian ruble

   29.78    25.5 - 34.05    14.35%    5.28%

US dollar / Ukrainian hryvnia

   7.80    3.43 - 12.17    56.05%    5.91%

 

     2007    2006
      

Closing rate

31 December
2007

   Possible
closing rate
31 December
2007
  

Possible
volatility

of rates in %

  

Possible
volatility

of rates in %

Euro / Russian ruble

   35.93    33.91 - 37.96    5.64%    6.42%

Euro / Serbian dinar

   -    -    4.05%    -

Euro / Ukrainian hryvnia

   7.42    6.58 - 8.26    11.30%    11.46%

Euro / Romanian lei

   -    -    12.03%    -

US dollar / Russian ruble

   24.41    23.12 -25.70    5.28%    5.48%

US dollar / Ukrainian hryvnia

   5.04    4.74 - 5.34    5.91%    20.23%

If the Ukrainian hryvnia, the Russian ruble, the Serbian dinar and the Romanian lei had weakened/strengthened during 2008 by the above estimated changes against the euro or the US dollar, with all other variables held constant, the 2008 profit would have been 211m US dollar lower/higher (as compared to a potential lower/higher impact of 21m US dollar on profit estimated in 2007 and to 16m US dollar on profit estimated in 2006).

 

(C) INTEREST RATE RISK

The company applies a dynamic interest rate hedging approach whereby the target mix between fixed and floating rate debt is reviewed periodically. The purpose of the company’s policy is to achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as the company’s overall business strategy.

FLOATING INTEREST RATE RISK ON BORROWINGS IN EURO

The company entered into several interest rate swaps and forward rate agreements to hedge the floating interest rate risk on 1 395m euro (last year 1 135m euro) out of the sum of credit facility agreements and commercial papers of 2 695m euro outstanding at 31 December 2008 (last year 1 734m euro).

In conformity with the IAS 39 hedge accounting rules, 1 085m euro of these hedges were designated as cash flow hedges. A remaining 310m euro hedge was not designated for hedge accounting.

FLOATING INTEREST RATE RISK ON BORROWINGS IN US DOLLAR

The company borrowed an amount of 44b US dollar to acquire Anheuser-Busch and entered into a series of forward starting US dollar interest rate swaps in order to provide a higher predictability of cash flows. As a result, the interest rates for up to an amount of US dollar 34.5 billion, under the US dollar 45 billion senior facility agreement, have effectively been fixed at 3.875 % per annum plus applicable spreads, for the period of 2009-2011. From this 34.5b US dollar hedging, 25b US dollar hedge was designated to the senior facility, 5b US dollar is designated to a pre-hedging of the bond issuance in January 2009 and 4.5b US dollar is designated to a pre-hedging of future bonds issuance.

In conformity with the IAS 39 hedge accounting rules, these 34.5b US dollar hedges were designated as cash flow hedges.

 

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FLOATING INTEREST RATE RISK ON BORROWINGS IN CANADIAN DOLLAR

The company borrowed an additional amount of 198m Canadian dollar (last year 180m Canadian dollar) out of a total credit facility agreement of 680m Canadian dollar at 31 December 2008 (last year 680m Canadian dollar).

The company entered into a series of interest rate swaps to hedge the interest rate risk of the floating rate debt in Canada; the first two issued in September 2007 for 325m Canadian dollar and a third one issued in September 2008 for 168m Canadian dollar. The maturity dates of these swaps are October 2010 for the first two swaps and September 2011 for the third swap.

In conformity with the IAS 39 hedge accounting rules, these hedges were designated as cash flow hedges.

A description of the interest rate risk hedging related to the private placements and the US dollar bonds is given below.

PRIVATE PLACEMENT HEDGES (FOREIGN CURRENCY RISK + INTEREST RATE RISK ON BORROWINGS IN US DOLLAR)

Private placement of 850m US dollar of which:

 

   

300m US dollar matures in 2009;

   

475m US dollar matures in 2010;

   

75m US dollar matures in 2013.

The company hedged the foreign currency and fixed interest rate risk of 730m US dollar of the private placement (180m US dollar of tranche 2009, full tranche 2010 and full tranche 2013) by entering into US dollar fixed / euro floating cross currency interest rate swaps for a total amount of 730m US dollar expiring in 2009, 2010 and 2013.

In conformity with the IAS 39, these hedges were designated as fair value hedges.

In addition, two US dollar fixed / euro fixed CCIRS’s (nominal amount of 120m US dollar) were entered into to convert for an amount of 120m US dollar (piece of tranche 2009) the fixed US dollar interest rate exposure into a fixed euro interest rate.

In conformity with IAS 39 these hedges are designated as cash flow hedges.

AMBEV BOND HEDGES (FOREIGN CURRENCY RISK + INTEREST RATE RISK ON BORROWINGS IN US DOLLAR)

In December 2001, AmBev issued 500m US dollar in foreign securities (bond 2011). This bond bears interest at 10.7% and is repayable semi-annually as from July 2002 with final maturity in December 2011. In September 2003 AmBev issued another 500m US dollar in foreign securities (bond 2013). This bond bears interest at 8.75% and is repayable semi-annually since March 2004 with final maturity in September 2013. In July 2007 AmBev issued a Brazilian real bond (bond 2017), which bears interest at 9.5% and is repayable semi-annually with final maturity date in July 2017.

AmBev entered into several US dollar fixed / Brazilian real floating cross currency interest rate swaps to manage and reduce the impact of changes in the US dollar exchange rate and interest rate on these bonds. In addition to this, AmBev entered into a fixed / floating interest rate swap to hedge the interest rate risk on the bond 2017. These derivative instruments, in conformity with the IAS 39 hedge accounting rules, have been designated as fair value hedges.

CANADA BOND HEDGES (FOREIGN CURRENCY RISK + INTEREST RATE RISK ON BORROWINGS IN BRAZILIAN REAL)

The company entered into a series of forward exchange contracts to hedge the Brazilian real and fixed interest rate risk from two bank loans; the first one issued in June 2006 for 717m Brazilian real issued and the second one in January 2007 for 474m Brazilian real. The unwinding of the forward exchange contracts acts like a receive Brazilian real fixed / pay Canadian dollar fixed cross currency interest rate swap. The maturity dates of these foreign exchange forwards are identical to the maturity dates of the interest flows and the maturity date of the principal, being 20 June 2011 for the first loan and 18 January 2012 for the second loan.

In conformity with IAS 39, these hedges were designated as cash flow hedges. In conformity with the company’s hedge accounting policy, the impact of the interest differential fixed at inception on the exchange of principal amounts in Canadian dollar and Brazilian real is amortized over the life of the transaction.

ARGENTINA BOND HEDGES (FOREIGN CURRENCY RISK + INTEREST RATE RISK ON BORROWINGS IN US DOLLAR)

To hedge the US dollar and fixed interest rate risk from a 150m US dollar bond issued in Argentina, the company entered into two US dollar fixed / Argentinean peso cross currency interest rate swaps for the total exposure. The maturity date of the cross currency interest rate swaps is identical to the maturity date of the hedged bond, being 22 March 2012. A portion of the bond’s principal amount is reimbursed annually until maturity.

In conformity with IAS 39, these hedges were designated as cash flow hedges.

 

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INTEREST RATE SENSITIVITY ANALYSIS

In respect of interest-bearing financial liabilities, the table below indicates their effective interest rates at balance sheet date as well as split per currency in which the debt is denominated.

 

31 December 2008

Interest-bearing financial liabilities

Million US dollar

  Before hedging   After hedging
  Effective interest
rate
  Amount   Effective interest
rate
  Amount

Floating rate

       

Brazilian real

  13.17%   1 909   15.82%   3 066

Bulgarian lev

  7.67%   11   7.67%   11

Canadian dollar

  2.56%   309   2.56%   309

Chinese yuan

  5.92%   67   4.79%   68

Euro

  3.07%   4 115   3.54%   3 156

Hungarian forint

  8.07%   15   8.07%   15

Pound sterling

  4.02%   264   4.99%   422

Russian ruble

  15.98%   124   15.98%   124

South Korean won

  4.79%   43   4.79%   43

US dollar

  3.70%   43 395   5.44%   9 397

Other

  14.00%   13   14.00%   13
    50 265     16 624

Fixed rate

       

Argentinean peso

  20.55%   50   20.55%   50

Bolivian boliviano

  7.95%   15   7.95%   15

Brazilian real

  13.40%   636   6.64%   38

Canadian dollar

  7.50%   72   5.51%   580

Chinese yuan

  4.76%   93   4.76%   93

Dominican peso

  16.18%   11   16.18%   11

Euro

  4.12%   13   3.56%   1 578

Guatemalan quetzal

  8.68%   24   8.68%   24

Paraguay guarani

  8.29%   35   8.29%   35

Peruvian nuevo sol

  7.90%   71   7.90%   71

Pound sterling

  -   -   4.87%   106

Russian ruble

  8.00%   134   8.00%   134

South Korean won

  5.22%   31   5.22%   31

Ukrainian hryvnia

  13.49%   79   13.49%   79

Uruguayan peso

  10.49%   8   10.49%   8

US dollar

  6.17%   8 456   5.10%   40 532

Venezuelan bolivar

  24.96%   82   24.96%   82
    9 810     43 467
       

31 December 2007

Interest-bearing financial liabilities

Million US dollar

  Before hedging   After hedging
  Effective interest
rate
  Amount   Effective interest
rate
  Amount

Floating rate

       

Brazilian real

  10.38%   1 793   12.65%   3 412

Canadian dollar

  5.13%   184   4.73%   640

Chinese yuan

  6.01%   43   6.01%   43

Euro

  4.66%   2 553   4.88%   1 597

Hungarian forint

  7.95%   13   7.95%   13

Pound sterling

  5.00%   194   6.26%   412

Russian ruble

  13.97%   219   7.70%   219

South Korean won

  5.59%   6   5.59%   6

Ukrainian hryvnia

  9.71%   93   9.71%   93

US dollar

  9.90%   24   -   -

Other

  5.91%   9   5.90%   9
    5 131     6 444

Fixed rate

       

Argentinean peso

  10.79%   81   14.93%   81

Brazilian real

  13.41%   842   8.93%   236

Canadian dollar

  6.98%   141   5.62%   521

Chinese yuan

  5.46%   63   5.47%   63

Dominican peso

  9.86%   87   9.86%   87

Euro

  5.92%   264   3.48%   1 453

Guatemalan quetzal

  6.82%   29   6.82%   29

Japanese yen

  2.18%   213   -   -

Paraguay guarani

  5.14%   28   5.14%   28

Peruvian nuevo sol

  6.56%   122   6.56%   122

Pound sterling

  -   -   4.87%   146

Russian ruble

  16.00%   163   8.00%   163

South Korean won

  5.04%   75   5.04%   75

US dollar

  6.88%   2 451   6.66%   319

Venezuelan bolivar

  15.49%   66   15.41%   66

Other

  9.04%   32   9.04%   35
    4 657     3 424

 

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At 31 December 2008, the total carrying amount of the floating and fixed rate interest-bearing financial liabilities before hedging listed above includes bank overdrafts of 765m US dollar (last year 118m US dollar) but does not include the interest rate fair value component of 15m US dollar (last year 78m US dollar) of debt instruments designated in a fair value hedge.

As disclosed in the above table, 16 624m US dollar or 28% of the company’s interest bearing financial liabilities bear a variable interest rate. The company estimated that the reasonably possible change of the market interest rates applicable to its floating rate debt after hedging is as follows 1 :

 

     2008    2007
      

Interest rate

31 December
2008

  

Possible interest rate

31 December 2008

  

Possible
volatility

of rates in %

  

Possible
volatility

of rates in %

Brazilian real

   13.10%    10.74% - 15.46%    18.01%    11.57%

Canadian dollar

   1.57%    0.95% - 2.2%    39.62%    14.18%

Chinese yuan

   2.08%    1.26% - 2.90%    39.34%    10.57%

Euro

   2.89%    2.40% - 3.38%    16.90%    8.18%

Hungarian forint

   10.00%    4.40% - 15.60%    55.96%    6.89%

Pound sterling

   2.77%    1.63% - 3.91%    41.08%    13.45%

Russian ruble

   18.00%    0.00% - 78.71%    337.30%    161.46%

South Korean won

   3.30%    2.00% - 4.6%    39.30%    16.53%

Ukrainian hryvnia

   23.58%    0.00% - 57.57%    144.13%    169.60%

US dollar

   1.43%    0.56% - 2.29%    60.80%    14.02%
           
     2007    2006
      

Interest rate

31 December
2007

  

Possible interest rate

31 December 2007

  

Possible
volatility

of rates in %

  

Possible
volatility

of rates in %

Brazilian real

   10.78%    9.53% - 12.03%    11.57%    12.25%

Canadian dollar

   4.56%    3.91% - 5.20%    14.18%    5.14%

Chinese yuan

   4.43%    3.97% - 4.90%    10.57%    -

Euro

   4.68%    4.30% - 5.07%    8.18%    5.00%

Hungarian forint

   7.50%    6.98% - 8.02%    6.89%    15.52%

Pound sterling

   5.99%    5.19% - 6.80%    13.45%    6.07%

Russian ruble

   6.50%    0.00% - 16.99%    161.46%    91.44%

South Korean won

   5.56%    4.64% - 6.47%    16.53%    13.62%

Ukrainian hryvnia

   11.36%    0.00% - 30.63%    169.60%    88.50%

US dollar

   4.70%    4.04% - 5.36%    14.02%    4.54%

When AB InBev applies a reasonably possible increase/decrease in the market interest rates mentioned above on the company’s floating rate debt at 31 December 2008, with all other variables held constant, 2008 profit would have been 156m US dollar lower/higher. In addition, this effect will be partly compensated by 4m US dollar higher/lower interest income on the company’s interest-bearing financial assets.

 

(D) COMMODITY RISK

The commodity markets have experienced and are expected to continue to experience price fluctuations. AB InBev therefore uses both fixed price purchasing contracts and commodity derivatives to minimize exposure to commodity price volatility. The company has significant exposures to the following commodities: aluminum, corn grits, corn syrup, corrugated, crowns, glass, hops, labels, malt, fuel oil, natural gas, rice and wheat. On 31 December 2008, the company has the following commodity derivatives outstanding: aluminum swaps for 354m US dollar notional amount (last year 268m US dollar), exchange traded sugar futures for 68m US dollar notional amount (last year 60m US dollar) and exchange traded wheat futures for 24m US dollar notional amount (last year 18m US dollar).

In conformity with the IAS 39 hedge accounting rules these hedges are designated as cash flow hedges.

 

(E) EQUITY PRICE RISK

During 2008, AB InBev has not held any material equity investments classified as available-for-sale. In addition, marketable securities classified as held for trading mainly consist of debt securities not exposed to variation in equity prices or indexes. As a result, AB InBev was not exposed to any material equity price risks.

 

1 The estimate is based on the standard deviation of daily volatilities of the benchmark interest rates during the past 250 days at 31 December 2008 and using a 95% confidence interval. For the Brazilian real floating rate debt, the estimated market interest rate is composed of the InterBank Deposit Certificate (“CDI”) and the Long-Term Interest Rate (“TJLP”). With regard to other market interest rates, our analysis is based on the 3-month InterBank Offered Rates applicable for the currencies concerned (e.g. Euribor 3M, Libor 3M, Bubor 3M).

 

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(F) CREDIT RISK

Credit risk encompasses all forms of counterparty exposure, i.e. where counterparties may default on their obligations to AB InBev in relation to lending, hedging, settlement and other financial activities. The company has a credit policy in place and the exposure to counterparty credit risk is monitored.

AB InBev mitigates its exposure to counterparty credit risk through minimum counterparty credit guidelines, diversification of counterparties, working within agreed counterparty limits and through setting limits on the maturity of financial assets. The company has furthermore master netting agreements with most of the financial institutions that are counterparties to the derivative financial instruments. These agreements allow for the net settlement of assets and liabilities arising from different transactions with the same counterparty. Based on these factors, AB InBev considers the risk of counterparty default per 31 December 2008 to be limited.

AB InBev has established minimum counterparty credit ratings and enters into transactions only with financial institutions of investment grade or better. The company monitors counterparty credit exposures closely and reviews any downgrade in credit rating immediately. To mitigate pre-settlement risk, minimum counterparty credit standards become more stringent as the duration of the derivative financial instruments increases. To minimize the concentration of counterparty credit risk, the company enters into derivative transactions with a portfolio of financial institutions.

EXPOSURE TO CREDIT RISK

The carrying amount of financial assets represents the maximum credit exposure of the Group. The carrying amount is presented net of the impairment losses recognized. The maximum exposure to credit risk at the reporting date was:

 

     2008    2007
Million US dollar    Gross    Impairment    Net
carrying
amount
   Gross    Impairment    Net
carrying
amount

Financial assets at fair value through profit or loss

   270    -    270    264    -    264

Available-for-sale financial assets

   135    (22)    113    138    (25)    113

Held-to-maturity investments

   126    -    126    127    -    127

Trade receivables

   3 077    (264)    2 813    2 825    (300)    2 525

Cash deposits for guarantees

   259    -    259    343    -    343

Loans to customers

   350    (72)    278    458    (84)    374

Other receivables

   1 215    (84)    1 131    1 153    (100)    1 053

Derivative financial assets

   989    -    989    346    -    346

Cash and cash equivalents

   2 936    -    2 936    1 949    -    1 949
   9 357    (442)    8 915    7 603    (509)    7 094

There was no significant concentration of credit risks with any single counterparty per 31 December 2008.

The increase of the derivative financial assets is mainly explained by the interest rate swaps contracted to cover for the interest rate risk on the senior facility.

 

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IMPAIRMENT LOSSES

The allowance for impairment recognized during the period per classes of financial assets was as follows:

 

     2008
Million US dollar    Available-for-
sale financial
assets
   Trade
receivables
   Loans to
customers
   Other
receivables
   Total

Balance at 1 January

   (25)    (300)    (84)    (100)    (509)

Impairment losses

   (1)    (43)    (6)    (4)    (54)

Derecognition

   -    19    9    1    29

Currency translation

   4    60    9    19    92

Balance at 31 December

   (22)    (264)    (72)    (84)    (442)
              
     2007
Million US dollar    Available-for-
sale financial
assets
   Trade
receivables
   Loans to
customers
   Other
receivables
   Total

Balance at 1 January

   (24)    (269)    (92)    (94)    (479)

Impairment losses

   1    (25)    (12)    (5)    (41)

Derecognition

   1    25    27    12    65

Currency translation

   (3)    (31)    (7)    (13)    (54)

Balance at 31 December

   (25)    (300)    (84)    (100)    (509)
              
     2006
Million US dollar    Available-for-
sale financial
assets
   Trade
receivables
   Loans to
customers
   Other
receivables
   Total

Balance at 1 January

   (25)    (244)    (97)    (80)    (446)

Impairment losses

   5    (28)    (1)    (6)    (30)

Derecognition

   1    34    15    3    53

Currency translation

   (5)    (31)    (9)    (11)    (56)

Balance at 31 December

   (24)    (269)    (92)    (94)    (479)

 

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(G) LIQUIDITY RISK

The following are the contractual maturities of non-derivative financial liabilities including interest payments and derivative financial assets and liabilities:

 

    2008
Million US dollar   Carrying
amount
  Contractual
cash flows
  Less than 1
year
  1-2 years   2-5 years   More than
5 years

Non-derivative financial liabilities

           

Secured bank loans

  107   (138)   (54)   (17)   (67)   -

Unsecured bank loans

  50 553   (56 306)   (12 834)   (13 601)   (29 725)   (146)

Unsecured bond issues

  8 432   (16 414)   (1 321)   (1 351)   (4 008)   (9 734)

Secured other loans

  7   (9)   -   (1)   (7)   (1)

Unsecured other loans

  174   (230)   (19)   (50)   (110)   (51)

Finance lease liabilities

  53   (132)   (8)   (11)   (14)   (99)

Bank overdraft

  765   (765)   (765)   -   -   -

Trade & other payables

  8 768   (8 773)   (8 370)   (291)   (38)   (74)
  68 859   (82 767)   (23 371)   (15 322)   (33 969)   (10 105)

Derivative financial liabilities

           

Interest rate derivatives

  2 231   (2 042)   (153)   (806)   (1 037)   (46)

Foreign exchange derivatives

  (327)   198   138   56   4   -

Interest rate and foreign exchange derivatives

  (159)   (497)   57   (136)   (418)   -

Commodity derivatives

  388   (193)   (178)   (15)   -   -

Other derivatives

  (10)   10   7   3   -   -
  2 123   (2 524)   (129)   (898)   (1 451)   (46)

Of which: directly related to cash flow hedges

  2 353   (1 994)   (202)   (761)   (1 002)   (29)
           
    2007
Million US dollar   Carrying
amount
  Contractual
cash flows
  Less than 1
year
  1-2 years   2-5 years   More than
5 years

Non-derivative financial liabilities

           

Secured bank loans

  546   (640)   (166)   (449)   (25)   -

Unsecured bank loans

  6 064   (6 748)   (1 845)   (882)   (2 837)   (1 184)

Unsecured bond issues

  2 875   (4 052)   (520)   (1 219)   (1 578)   (735)

Unsecured other loans

  237   (272)   (37)   (49)   (121)   (65)

Finance lease liabilities

  22   (27)   (6)   (3)   (18)   -

Secured bank facilities

  6   (6)   (6)   -   -   -

Bank overdraft

  118   (118)   (118)   -   -   -

Trade & other payables

  6 246   (6 252)   (5 784)   (418)   (6)   (44)
   
  16 114   (18 115)   (8 482)   (3 020)   (4 585)   (2 028)

Derivative financial liabilities

           

Interest rate derivatives

  (50)   20   3   3   32   (18)

Foreign exchange derivatives

  (188)   106   3   19   84   -

Interest rate and foreign exchange derivatives

  589   (985)   (389)   (94)   (231)   (271)

Commodity derivatives

  12   (12)   (12)   -   -   -

Other derivatives

  (1)   1   1   -   -   -
   
  362   (870)   (394)   (72)   (115)   (289)

Of which: directly related to cash flow hedges

  (209)   166   (3)   32   127   10

 

(H) CAPITAL MANAGEMENT

AB InBev is continuously optimizing its capital structure targeting to maximize shareholder value while keeping the desired financial flexibility to execute the strategic projects. Besides the statutory minimum equity funding requirements that apply to the company’s subsidiaries in the different countries, AB InBev is not subject to any externally imposed capital requirements. When analyzing AB InBev’s capital structure the company uses the same debt/equity classifications as applied in the company’s IFRS reporting.

 

(I) FAIR VALUE

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. In conformity with IAS 39 all derivatives are recognized at fair value in the balance sheet.

The fair value of derivative financial instruments either is the quoted market price or is calculated using pricing models taking into account current market rates. These pricing models also take into account the current creditworthiness of the counterparties.

 

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The fair value of these instruments generally reflects the estimated amount that AB InBev would receive on the settlement of favorable contracts or be required to pay to terminate unfavorable contracts at the balance sheet date, and thereby takes into account any unrealized gains or losses on open contracts.

The following table summarizes for each type of derivative the fair values recognized as assets or liabilities in the balance sheet:

 

       Assets      Liabilities      Net
Million US dollar      2008      2007      2008      2007      2008      2007

Foreign currency

                             

Forward exchange contracts

     360      211      (51)      (22)      309      189

Foreign currency futures

     24      6      (15)      (6)      9      -

Other foreign currency derivatives

     10      -      -      -      10      -

Interest rate

                             

Interest rate swaps

     116      87      (2 345)      (36)      (2 229)      51

Cross currency interest rate swaps

     411      40      (252)      (627)      159      (587)

Interest rate futures

     -      -      -      (1)      -      (1)

Commodities

                             

Aluminum swaps

     -      1      (167)      (19)      (167)      (18)

Sugar futures

     -      -      (7)      4      (7)      4

Wheat futures

     -      -      (13)      (1)      (13)      (1)

Other commodity derivatives

     78      -      (280)      -      (202)      -

Credit

                             

Credit default swaps

     10      1      -      -      10      1
     1 009      346      (3 130)      (708)      (2 121)      (362)

The following table compares the carrying amounts of the fixed rate interest-bearing financial liabilities with their fair values at 31 December:

 

Interest-bearing financial liabilities

Million US dollar

  

Carrying

amount 2008

  

Fair value

2008

   Carrying
amount 2007
   Fair value
2007

Fixed rate

           

Argentinean peso

   (50)    (50)    (81)    (81)

Brazilian real

   (636)    (721)    (842)    (891)

Canadian dollar

   (72)    (72)    (141)    (149)

Chinese yuan

   (93)    (93)    (63)    (63)

Dominican peso

   (11)    (11)    (87)    (87)

Euro

   (13)    (13)    (264)    (247)

Guatemalan quetzal

   (24)    (24)    (29)    (29)

Japanese yen

   -    -    (213)    (213)

Peruvian nuevo sol

   (71)    (71)    (122)    (112)

Russian ruble

   (135)    (135)    (163)    (163)

South Korean won

   (31)    (31)    (75)    (74)

Ukrainian hryvnia

   (79)    (79)    -    -

US dollar

   (8 456)    (9 171)    (2 451)    (2 408)

Venezuelan bolivar

   (82)    (82)    (66)    (66)

Other

   (57)    (58)    (60)    (60)
   (9 810)    (10 611)    (4 657)    (4 643)

The following summarizes the methods and assumptions used in estimating the fair value of financial instruments recognized at their fair value in the balance sheet and reflected in this note.

DERIVATIVE INSTRUMENTS

The fair value of exchange traded derivatives (e.g. exchange traded foreign currency futures) is determined by reference to the official prices published by the respective exchanges (e.g. the New York Board of Trade). The fair value of over-the-counter derivatives is determined by commonly used valuation techniques. These are based on market inputs from reliable financial information providers.

INVESTMENT DEBT SECURITIES

The fair value of investment debt securities at fair value through profit or loss is based on their quoted price as published by exchanges or provided by reliable financial information providers.

 

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NON-DERIVATIVE FINANCIAL LIABILITIES

The fair value of non-derivate financial liabilities is calculated based on commonly-used valuation techniques (i.e. net present value of future principal and interest cash flows discounted at market rate). These are based on market inputs from reliable financial information providers.

Fair values determined by reference to prices provided by reliable financial information providers are periodically checked for consistency against other pricing sources.

 

(J) SIGNIFICANCE OF FINANCIAL INSTRUMENTS FOR FINANCIAL PERFORMANCE

The note at hand discloses the different elements composing AB InBev’s position towards financial risk and instruments. The effect of AB InBev’s financial risk management on performance mainly materializes in the items of income, expense, gains or losses recognized in the income statement or in the gains and losses directly recognized in equity (see note 11 Finance costs and income ).

 

31. OPERATING LEASES

LEASES AS LESSEE

Non-cancelable operating leases are payable as follows:

 

Million US dollar      2008      2007      2006

Less than one year

     217      222      190

Between one and five years

     800      785      612

More than five years

     1 243      1 214      338
     2 260      2 221      1 140

At 31 December 2008, 233m US dollar was recognized as an expense in the income statement in respect of operating leases as lessee (2007: 181m US dollar; 2006: 178m US dollar).

The company leases a number of warehouses, factory facilities and other commercial buildings under operating leases. The leases typically run for an initial period of five to ten years, with an option to renew the lease after that date. Lease payments are increased annually to reflect market rentals. None of the leases include contingent rentals.

SUBLEASES

AB InBev has sublet some of the leased properties. Non-cancelable operating subleases are receivable as follows:

 

Million US dollar      2008      2007      2006

Less than one year

     118      121      92

Between one and five years

     369      470      302

More than five years

     198      233      119
     685      824      513

At 31 December 2008, 148m US dollar was recognized as income in the income statement in respect of subleases (2007: 105m US dollar; 2006: 113m US dollar).

LEASES AS LESSOR

The company leases out part of its property under operating leases. Non-cancelable operating leases are receivable as follows:

 

Million US dollar      2008      2007      2006

Less than one year

     11      21      50

Between one and five years

     36      69      188

More than five years

     15      32      90
     62      122      328

At 31 December 2008, 19m US dollar was recognized as income in the income statement in respect of operating leases as lessor (2007: 64m US dollar; 2006: 49m US dollar).

 

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32. COLLATERAL AND CONTRACTUAL COMMITMENTS FOR THE ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT, LOANS TO CUSTOMERS AND OTHER

 

Million US dollar      2008      2007      2006

Collateral given for own liabilities

     561      642      533
Collateral and financial guarantees received for own receivables and loans to customers      181      293      273

Contractual commitments to purchase property, plant and equipment

     196      349      303

Contractual commitments to acquire loans to customers

     230      268      246

Other commitments

     447      461      72

The collateral given for own liabilities of 561m US dollar at 31 December 2008 contains 241m US dollar cash guarantees. Such cash deposits are a customary feature associated with litigations in Brazil: in accordance with Brazilian laws and regulations a company may or must (depending on the circumstances) place a deposit with a bank designated by the court or provide other security such as collateral on property, plant and equipment. With regard to judicial cases, AB InBev has made the appropriate provisions in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets – see also note 28 Provisions . In the company’s balance sheet the cash guarantees are presented as part of other receivables – see note 20 Trade and other receivables . The remaining part of collateral given for own liabilities (320m US dollar) contains collateral on AB InBev’s property in favor of the excise tax authorities, the amount of which is determined by the level of the monthly excise taxes due, inventory levels and transportation risk, and collateral on its property, plant and equipment with regard to outstanding loans. To the extent that AB InBev would not respect its obligations under the related outstanding contracts or would loose the pending judicial cases the collateralized assets would be used to settle AB InBev’s obligations.

To keep AB InBev’s credit risk with regard to receivables and loans to customers as low as possible collateral and other credit enhancements were obtained for a total amount of 181m US dollar at 31 December 2008. Collateral is held on both real estate and debt securities while financial guarantees are obtained from banks and other third parties.

In a limited number of countries AB InBev has committed itself to acquire loans to customers from banks at their notional amount if the customers do not respect their reimbursement commitments towards the banks. The total outstanding amount of such loans is 230m US dollar.

Other commitments amount to 447m US dollar at 31 December 2008 and mainly cover guarantees given to pension funds, rental and other guarantees.

 

33. CONTINGENCIES

Certain subsidiaries of AmBev have received tax assessments totaling 4 804m real including accrued interest and penalties, related to corporate Brazilian taxation of income generated outside Brazil. In 2005 and 2008, AmBev was officially notified of administrative Lower Court decisions, recognizing that a substantial portion of the amount of the tax assessment mentioned above was incorrect. These decisions, of which some were appealed, reduced the amount of such tax assessments to 2 019m real (approximately 864m US dollar). AmBev disputes the validity of these tax assessments and intends to vigorously defend its case. No provision has been recorded related to these tax assessments.

Certain holders of warrants issued by AmBev in 1996 for exercise in 2003 proposed lawsuits to subscribe correspondent shares for an amount lower than AmBev considers as established upon the warrant issuance. In case AmBev loses the totality of these lawsuits, the issuance of 5 536 919 preferred shares and 1 376 344 common shares would be necessary. AmBev would receive in counterpart funds that are materially lower than the current market value. This could result in a dilution of about 1% to all AmBev shareholders. Furthermore, the holders of these warrants claim to receive the dividends relative to these shares since 2003 (approximately 95m real excluding legal fees). AmBev disputes these claims and intends to vigorously defend its case.

AmBev, together with other Brazilian brewers, is party to a lawsuit whereby the Federal Public Prosecutor’s office: (i) claims collective damages of approximately 2.8b real (out of which 2.1b real allocated to AmBev); and (ii) requests that the defendants are ordered to allocate to treatment of the harms caused by alcohol the same amounts invested in advertisement in the future. Plaintiff argues that advertising campaigns of defendants increase total consumption of alcohol and, as a result, public health and social security costs, traffic accidents, criminality and underage consumption. AmBev believes that the claim is without merit, will vigorously defend this litigation and has classified the chances of loss as being remote, in accordance with IFRS.

 

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Shortly after the above lawsuit was filed, a consumer-protection association applied to be admitted as a joint-plaintiff. The association has made further requests in addition to the ones made by Public Prosecutor. They include: (i) claim for “collective moral damages” in an amount to be ascertained by the court; however, it suggests that it should be equal to the initial request of 2.8b real (therefore, it doubles the initial amount involved); (ii) destination of the amounts to specific public accounts; (iii) obligation to defendants to give full publicity of the future court decision; (iv) as a subsidiary claim, direct indemnification to public entities in charge of public health system and social security; (v) interest and monetary adjustment on amounts due; (vi) defendants to pay court and attorney fees; (vii) burden of proof to lie on defendants; and (viii) exemption of court fees to the association. The court has admitted the association as joint—plaintiff and has agreed to hear the new claims. Process has not been served so far. AmBev intends to vigorously defend this litigation.

On 16 October 2008, Grupo Modelo S.A.B, de C.V., Diblo S.A. de C.V. and the Grupo Modelo Series A shareholders filed an arbitration against Anheuser-Busch, Anheuser-Busch International, Inc., and Anheuser-Busch International Holdings, Inc. pursuant to the dispute resolution procedure set forth in the 1993 investment agreement among Grupo Modelo, Diblo and certain shareholders thereof, and Anheuser-Busch, Anheuser-Busch International, Inc. and ABIH. The notice of arbitration claims the transaction between Anheuser-Busch and InBev violates provisions of the investment agreement. The post-closing relief sought by Grupo Modelo includes permanently barring Anheuser-Busch and its successors from exercising corporate governance rights under the investment agreement and from exercising any right of first refusal to purchase the stock of Grupo Modelo held by the Series A Shareholders. Grupo Modelo and Diblo allege that the transaction constituted a prohibited transfer of the Series B shares in Grupo Modelo and Diblo held by ABIH. The Series A Shareholders allege that the merger transaction constituted a transfer of the Series B shares of Grupo Modelo and Diblo in violation of their right of first refusal to purchase. The respondents believe that there is no change of control clause in the investment agreement and that since no direct transfer of the shares of Grupo Modelo and Diblo held by ABIH occurred, the claims of the claimants are without merit. However, the relief sought by Grupo Modelo, Diblo and its Series A Shareholders in the arbitral proceeding or any other equitable or other relief they may seek could have a material adverse effect on Anheuser-Busch or AB InBev, including by limiting the ability to exercise corporate governance rights under the investment agreement with Grupo Modelo after the closing of the merger.

As a result of the US antitrust review of the transaction AB InBev’s subsidiary InBev USA, LLC will cease to act as the exclusive importer of Labatt branded beer (which includes primarily Labatt Blue and Labatt Blue Light) in the US for Labatt Brewing Company Limited, a wholly owned subsidiary of AmBev. AB InBev has agreed to indemnify AmBev and its subsidiary Labatt Brewing Company Limited against certain losses, claims and damages that would result from the divestiture of the assets required to be disposed of based on a fair market valuation of such assets. The impact on earnings of the foregoing actions is not expected to be material to AB InBev.

On September 10, 2008, an action brought under Section 16 of the Clayton Antitrust Act styled Ginsburg et al. v. InBev NV/SA et al., C.A. No. 08-1375, was filed against Anheuser-Busch in the United States District Court for the Eastern District of Missouri. The plaintiffs in the Ginsburg action allege that the proposed merger between Anheuser-Busch and InBev will have certain anticompetitive effects and consequences on the beer industry and will create a monopoly in the production and sale of beer in the United States. The plaintiffs generally seek declaratory relief that the proposed merger violates Section 7 of the Clayton Antitrust Act, injunctive relief to prevent consummation of the merger and fees and expenses. Plaintiffs’ request for injunctive relief was denied, and they filed an appeal with the 8th Circuit Court of Appeals. AB InBev will continue to vigorously defend against these claims.

 

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34. RELATED PARTIES

TRANSACTIONS WITH DIRECTORS AND EXECUTIVE BOARD MANAGEMENT MEMBERS (KEY MANAGEMENT PERSONNEL)

In addition to short-term employee benefits (primarily salaries) AB InBev’s executive board management members are entitled to post-employment benefits. More particular, members of the executive board management participate in the pension plan of their respective country—see also note 26 Employee Benefits . Finally, key management personnel are eligible for the company’s share option and/or share swap program (refer note 27 Share-based Payments ). Total directors and executive board management compensation included in the income statement can be detailed as follows:

 

     2008    2007    2006
Million US dollar    Directors    Executive
board
management
   Directors    Executive
board
management
   Directors    Executive
board
management

Short-term employee benefits

   12    22    1    44    3    40

Post-employment benefits

      3       1       1

Termination benefits

            8       10

Share-based payments

   2    15    1    23    1    15
   14    40    2    76    4    66

Directors’ compensation consists mainly of directors’ fees (tantièmes). Key management personnel was not engaged in any transactions with AB InBev and did not have any significant outstanding balances with the company, with the exception of a consultancy agreement entered into between AB InBev and Mr. Busch IV in connection with the merger and which will continue until 31 December 2013. Under the terms of the consultancy agreement Mr. Busch IV received a lump sum cash payment of 10.3m US dollar. During the consultancy period Mr. Busch IV will be paid a fee of approximately 120 000 US dollar per month and Mr. Busch IV will be provided with an appropriate office in St Louis, Missouri, administrative support and certain employee benefits that are materially similar to those provided to full-time salaried employees of Anheuser-Busch.

JOINTLY CONTROLLED ENTITIES

AB InBev reports its interest in jointly controlled entities using the line-by-line reporting format for proportionate consolidation. Significant interests in joint ventures include two distribution entities in Canada and three entities in Brazil. None of these joint ventures are material to the company. Aggregate amounts of AB InBev’s interest are as follows:

 

Million US dollar    2008    2007

Non-current assets

   68    88

Current assets

   31    29

Non-current liabilities

   85    103

Current liabilities

   28    29

Result from operations

   12    5

Profit attributable to equity holders

   3   

TRANSACTIONS WITH ASSOCIATES

AB InBev’s transactions with associates were as follows:

 

Million US dollar    2008    2007    2006

Revenue

   12    12    13

Non-current assets

   31      

Current assets

   14    52    7

Current liabilities

   14    12    8

Revenue from associates primarily consists of sales to distributors in which AB InBev has a non-controlling interest.

 

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35. EVENTS AFTER THE BALANCE SHEET DATE

On 9 January 2009, AB InBev announced that it completed the pricing of 5b US dollar notes, consisting of 1.25b US dollar notes due 2014, 2.5b US dollar notes due 2019 and 1.25b US dollar notes due 2039. The notes bear interest at an annual rate of 7.20% for the 5 year notes, 7.75% for the 10 year notes and 8.20% for the 30 year notes, respectively. The notes were issued by AB InBev Worldwide Inc., a wholly owned subsidiary of AB InBev, and are unconditionally and irrevocably guaranteed by its parent company, AB InBev NV/SA, which is currently rated Baa2 (Moody’s) and BBB+ (Standard and Poor’s). Certain subsidiaries of AB InBev NV/SA also provide guarantees in respect of the notes. The notes were being offered and sold to institutional investors in the US pursuant to Rule 144A and outside the US pursuant to Regulation S under the US Securities Act 1933, as amended. The net proceeds from the sale of the notes were used to repay a portion of the outstanding indebtedness incurred for the purpose of financing the acquisition of Anheuser-Busch Companies Inc.

On 22 January 2009, AB InBev announced that it completed the pricing of 0.75b euro notes due 2013 (the “2013 Notes”), 0.6b euro notes due 2017 (the “2017 Notes”) and 0.55b pound sterling notes due 2024 (the “2024 Notes”). The notes bear interest at an annual rate of 7.375% for the 2013 notes, 8.625% for the 2017 notes and 9.75% for the 2024 notes. The notes are issued by AB InBev NV/SA, which is currently rated Baa2 (Moody’s) and BBB+ (Standard and Poor’s), under its Euro Medium Term Note program. Certain subsidiaries of AB InBev NV/SA provide guarantees in respect of the notes. The notes were offered and sold to non-US persons outside the US pursuant to Regulation S under the US Securities Act 1933, as amended. The net proceeds from the sale of the notes were used to repay short term debt and a portion of the outstanding indebtedness incurred for the purpose of financing the acquisition of Anheuser-Busch Companies Inc.

On 23 January 2009, AB InBev announced that it entered into an agreement with Asahi Breweries, Ltd., whereby Asahi acquired 19.9% of Tsingtao Brewery Co., Ltd. from AB InBev for 667m US dollar. The divestiture of this stake in Tsingtao is part of AB InBev’s ongoing deleveraging program and allows the company to unlock shareholder value, generating proceeds that were used to repay debt incurred as a result of the acquisition of Anheuser-Busch. Under the agreement, AB InBev sells 261 577 836 H-shares of Tsingtao to Asahi at a price of 19.78 HK dollar per share as of 22 January 2009 implying an EBITDA 08 estimate multiple of 14.2x. This price represents a premium of 38% against the closing price of H-shares as of 22 January 2009. As a result of the transaction, Asahi became Tsingtao’s second largest shareholder. Tsingtao Brewery Group remains the largest shareholder in Tsingtao, holding a 31% stake as of 23 January 2009. AB InBev retains a minority share in Tsingtao of approximately 7%. This transaction was completed on 30 April 2009. On 5 June 2009, AB InBev announced that it completed the sale of its remaining minority stake in Tsingtao Brewery Co., LTD to Mr. Chen Fashu. Mr. Chen acquired AB InBev’s remaining 7% stake in Tsingtao Brewery Co., Ltd. for 235 million US dollar. Mr. Chen is a Chinese national and a private investor. Under the agreement, AB InBev sold 91,641,342 H-shares of Tsingtao to Mr. Chen at a price of HKD 19.83 per share

On 19 February, AB InBev announced that it closed its retail public offering in Belgium, The Netherlands and Luxembourg early. It successfully placed an aggregate nominal amount of 750m euro of notes due 2014 (the “Notes”). The Notes, which were settled on 27 February 2009 and mature on 27 February 2014, bear interest at an annual rate of 6.57%. The Notes were issued by AB InBev SA/NV, which is currently rated Baa2 (Moody’s) and BBB+ (Standard and Poor’s), under its Euro Medium Term Note Program. Certain subsidiaries of AB InBev SA/NV provided guarantees in respect of the Notes. The net proceeds from the sale of the Notes were used to repay short term debt and a portion of the outstanding indebtedness incurred for the purpose of financing the acquisition of Anheuser-Busch Companies Inc. The Notes were listed on Euronext Amsterdam by NYSE Euronext, the regulated market of Euronext Amsterdam N.V., the regulated market of Euronext Brussels, and on the London Stock Exchange’s Regulated Market.

On 23 February 2009, AB InBev entered into an agreement with an affiliate of KPS Capital Partners, LP to sell InBev USA LLC (also doing business under the name Labatt USA), headquartered in Buffalo, New York, which has been the exclusive importer in the United States of Labatt branded beer brewed by Labatt Brewing Company Limited, an indirect subsidiary of AB InBev headquartered in Canada. KPS Capital Partners is a private equity firm with over 1.8b US dollar of committed capital. The terms of the transaction were not disclosed. In addition to the acquisition of Labatt USA, the transaction included the grant by Labatt Brewing Corporation Limited of an exclusive license to brew Labatt branded beer in the US or Canada solely for sale for consumption in the US, to distribute, market and sell Labatt branded beer for consumption in the US, and to use the relevant trademarks and intellectual property to do so. Labatt Brewing Corporation Limited is also entering into a transitional supply agreement to brew and supply Labatt branded beer to Labatt USA for up to three years after which the purchaser will be responsible for production. This transaction is being undertaken to satisfy requirements imposed by the United States Department of Justice in connection with its clearance of InBev’s acquisition of Anheuser-Busch Companies, Inc. in November 2008. This transaction does not affect Labatt branded beer in Canada or anywhere else outside the US and

 

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also does not impact Kokanee, Alexander Keith’s, Brahma or any other brands except for Labatt branded beer. On 13 March 2009, AB InBev announced that it had completed the sale of the assets of InBev USA to an affiliate of KPS Capital Partners, LP. AB InBev used the proceeds from this sale to pay down a portion of the Senior Facility.

On 7 May 2009 AB InBev and Kohlberg Kravis Roberts & Co. L.P. (“KKR”) announced that they entered into an agreement whereby AB InBev will sell Oriental Brewery (“OB”), South Korea’s second largest brewery, to an affiliate of KKR, for 1.8 billion US dollar (equivalent to approximately 2.3 trillion KRW converted at the spot rate of 1272.6). AB InBev will continue its relationship with OB through the exchange of best practices, granting KKR exclusive licenses to distribute certain brands in South Korea including Budweiser, Bud-Ice and Hoegaarden, and by having an ongoing interest in OB through an agreed earnout. In addition, AB InBev has the right but not the obligation to reacquire OB within five years after closing of the transaction at pre-determined financial terms. The divestiture of OB is part of AB InBev’s ongoing de-leveraging program and allows the company to unlock shareholder value, generating proceeds that will be used to repay debt incurred as a result of InBev’s acquisition of Anheuser-Busch in November 2008. The transaction is subject to customary approvals under Korean law and to other customary closing conditions. The parties expect to complete the acquisition in the third quarter of 2009. The parties have entered into binding commitments for the sale of OB, and KKR has obtained committed financing for the purchase. AB InBev expects the impact on results to be immaterial and expects an exceptional capital gain of approximately 500 million USD. The capital gain may be affected, amongst other things, by the foreign exchange rate at closing.

On 13 May 2009, AB InBev Worldwide Inc. announced that it had completed the pricing of 3b US dollar aggregate principal amount of notes, consisting of 1.55b US dollar aggregate principal amount of notes due 2014, 1b US dollar aggregate principal amount of notes due 2019 and USD 450m aggregate principal amount of notes due 2039. The notes bear interest at an annual rate of 5.375% for the 5 year notes, 6.875% for the 10 year notes and 8.000% for the 30 year notes and will mature on November 15, 2014, 2019 and 2039, respectively. The notes were issued by AB InBev Worldwide Inc. and are unconditionally and irrevocably guaranteed by its parent company, AB InBev NV/SA, which is currently rated Baa2 (Moody’s) and BBB+ (Standard and Poor’s). In addition, certain subsidiaries of AB InBev NV/SA have also provided guarantees in respect of the notes. The notes have been offered and sold to institutional investors in the US pursuant to Rule 144A and outside the US pursuant to Regulation S under the US Securities Act of 1933, as amended. The net proceeds from the sale of the notes have been used to repay short term debt and to repay a portion of the outstanding indebtedness incurred for the purpose of financing the acquisition of Anheuser-Busch Companies Inc.

On 23 June 2009, AB InBev issued a series of notes in an aggregate principal amount of EUR 250 million due June 2015, which bear interest at 5.75%. On 12 June 2009, AB InBev issued a series of notes in an aggregate principal amount of GBP 750 million due June 2017, which bear interest at 6.5%. The net proceeds from the June Notes offering were used to repay a portion of the outstanding indebtedness incurred for financing the acquisition of Anheuser-Busch Companies Inc.

 

36. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

On 13 October 2009, Anheuser-Busch InBev Worldwide Inc. issued (i) $1.50 billion principal amount of 3.000% unsecured notes due 2012, (ii) $1.25 billion principal amount of 4.125% unsecured notes due 2015, (iii) $2.25 billion principal amount of 5.375% unsecured notes due 2020 and (iv) $0.50 billion principal amounts of 6.375% unsecured notes due 2040 (collectively the “New Notes”). The New Notes are fully and unconditionally guaranteed by Anheuser-Busch InBev SA/NV (the “Parent Guarantor”). In addition, certain of the Parent Guarantor’s direct and indirect wholly-owned subsidiaries (the “Subsidiary Guarantors”), collectively the “Guarantors”, jointly and severally guarantee the Notes, subject to certain limitations.

The following condensed consolidating financial information presents the Condensed Consolidating Balance Sheets as of 31 December 2008 and 2007, the Condensed Consolidating Income Statement and Condensed Consolidating Statements of Cash Flows for the years ended 31 December 2008, 2007 and 2006 of (a) AB InBev SA/NV (the Parent Guarantor), (b) Anheuser-Busch Worldwide Inc. InBev (the Issuer), (c) the Subsidiary Guarantors, (d) the non-guarantor subsidiaries, (e) elimination entries necessary to consolidate the Parent with the issuer, the guarantor subsidiaries and the non-guarantor subsidiaries; and (e) the Company on a consolidated basis. Investments in consolidated subsidiaries are presented under the equity method of accounting. Separate financial statements and other disclosures with respect to the guarantor subsidiaries have not been provided as management believes the following information is sufficient, as the guarantor subsidiaries are 100% owned by the Parent and all guarantees are full and unconditional. Except as disclosed in Note 23 “Transfers from Subsidiaries,” there are no restrictions on the Company’s ability to obtain funds from any of its direct or indirect wholly-owned subsidiaries through dividends, loans or advances.

 

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Condensed Consolidating Income Statement

 

For the year ended 31 December 08

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

Revenue

   -    -    5 163    18 815    ( 471)    23 507

Cost of sales

   (3)    -    (2 876)    (7 928)    471    (10 336)

Gross profit

   (3)    -    2 287    10 887    -    13 171
   -    -    -    -    -    -

Distribution expenses

   -    -    (492)    (2 233)    -    (2 725)

Sales and marketing expenses

   (51)    -    (761)    (2 698)    -    (3 510)

Administrative expenses

   51    (97)    (338)    (1 093)    (1)    (1 478)
Other operating income/(expenses), net    131    -    (427)    177    1    (118)

Profit from operations

   128    (97)    269    5 040    -    5 340

Net finance cost

   (393)    (173)    (220)    (814)    -    (1 600)

Share of result of associates

   1    -    (1)    60    -    60

Profit before tax

   (264)    (270)    48    4 286    -    3 800

Income tax expense

   (36)    98    135    (871)    -    (674)

Profit after tax

   (300)    (172)    183    3 415    -    3 126

Income from subsidiaries

   2 227    58    2 242    (113)    (4 414)    -

Profit

   1 927    (114)    2 425    3 302    (4 414)    3 126

Attributable to:

                 

Equity holders of AB InBev

   1 927    (114)    2 425    2 103    (4 414)    1 927

Minority interests

   -    -    -    1 199    -    1 199

Condensed Consolidating Income Statement

 

For the year ended 31 December 07

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

Revenue

   -    -    3 608    16 427    ( 300)    19 735

Cost of sales

   (2)    -    (1 944)    (6 472)    300    (8 118)

Gross profit

   (2)    -    1 664    9 955    -    11 617
   -    -    -    -    -    -

Distribution expenses

   -    -    (390)    (1 953)    -    (2 343)

Sales and marketing expenses

   (50)    -    (574)    (2 295)    -    (2 919)

Administrative expenses

   (113)    -    (272)    (969)    -    (1 354)

Other operating income/(expenses), net

   130    -    490    251    -    871

Profit from operations

   (35)    -    918    4 989    -    5 872

Net finance cost

   (21)    -    (107)    (690)    -    (818)

Share of result of associates

   -    -    (1)    2    -    1

Profit before tax

   (56)    -    810    4 301    -    5 055

Income tax expense

   (33)    -    (89)    (766)    -    (888)

Profit after tax

   (89)    -    721    3 535    -    4 167

Income from subsidiaries

   3 094    -    2 303    -    (5 397)    -

Profit

   3 005    -    3 024    3 535    (5 397)    4 167

Attributable to:

                 

Equity holders of AB InBev

   3 005    -    3 024    2 373    (5 397)    3 005

Minority interests

   -    -    -    1 162    -    1 162

 

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Condensed Consolidating Income Statement

 

For the year ended 31 December 06

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

Revenue

   -    -    3 432    13 534    ( 274)    16 692

Cost of sales

   (2)    -    (1 766)    (5 376)    274    (6 870)

Gross profit

   (2)    -    1 666    8 158    -    9 822
   -    -    -    -    -    -

Distribution expenses

   -    -    (355)    (1 590)    -    (1 945)

Sales and marketing expenses

   (57)    -    (530)    (2 066)    -    (2 653)

Administrative expenses

   (108)    -    (280)    (960)    -    (1 348)

Other operating income/(expenses), net

   57    -    (79)    71    -    49

Profit from operations

   (110)    -    422    3 613    -    3 925

Net finance cost

   26    -    (73)    (546)    -    (593)

Share of result of associates

   -    -    -    1    -    1

Profit before tax

   (84)    -    349    3 068    -    3 333

Income tax expense

   (6)    -    (90)    (570)    -    (666)

Profit after tax

   (90)    -    259    2 498    -    2 667

Income from subsidiaries

   1 860    -    1 530    -    (3 390)    -

Profit

   1 770    -    1 789    2 498    (3 390)    2 667

Attributable to:

                 

Equity holders of AB InBev

   1 770    -    1 789    1 601    (3 390)    1 770

Minority interests

   -    -    -    897    -    897

 

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Condensed Consolidating Balance Sheet

 

As at 31 December 08

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

ASSETS

                 

Non-current assets

                 

Property, plant and equipment

   101    -    10 809    8 764    -    19 674

Goodwill

   -    -    33 008    16 548    -    49 556

Intangible assets

   124    -    22 039    1 510    -    23 673

Investments in subsidiaries

   48 173    52 577    23 343    26 407    (150 500)    -

Investments in associates

   1    -    138    6 729    -    6 868

Other non-current assets

   673    -    1 306    1 505    (1 455)    2 029
   49 072    52 577    90 643    61 463    (151 955)    101 800

Current assets

                 

Inventories

   -    -    1 154    1 749    -    2 903

Trade and other receivables

   1 166    -    3 246    2 858    (2 650)    4 620

Cash and cash equivalents

   1    398    923    1 614    -    2 936

Other current assets

   26    -    301    574    -    901
   1 192    398    5 624    6 795    (2 650)    11 360

Total assets

   50 265    52 975    96 267    68 258    (154 605)    113 160

EQUITY AND LIABILITIES

                 

Equity

                 
Equity attributable to equity holders of AB InBev    29 664    26 819    64 036    52 423    (150 500)    22 442

Minority interests

   -    -    5    1 984    -    1 989
   29 664    26 819    64 041    54 407    (150 500)    24 431

Non-current liabilities

                 

Interest-bearing loans and borrowings

   15 312    20 212    10 097    3 859    (1 455)    48 025

Employee benefits

   2    -    2 431    576    -    3 009

Deferred tax liabilities

   -    -    11 271    805    -    12 076

Other non-current liabilities

   86    -    276    833    -    1 195
   15 400    20 212    24 075    6 073    (1 455)    64 305

Current liabilities

                 

Interest-bearing loans and borrowings

   4 462    5 441    1 307    2 198    (2 107)    11 301

Trade and other payables

   667    601    5 829    4 941    (543)    11 495

Other current liabilities

   72    (98)    1 015    639    -    1 628
   5 201    5 944    8 151    7 778    (2 650)    24 424

Total equity and liabilities

   50 265    52 975    96 267    68 258    (154 605)    113 160

 

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Condensed Consolidating Balance Sheet

 

As at 31 December 07

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

ASSETS

                 

Non-current assets

                 

Property, plant and equipment

   118    -    1 386    8 255    -    9 759

Goodwill

   -    -    1 046    19 319    -    20 365

Intangible assets

   67    -    183    1 590    -    1 840

Investments in subsidiaries

   19 390    -    19 765    -    (39 155)    -

Investments in associates

   -    -    27    19    -    46

Other non-current assets

   1 076    -    1 016    1 829    (1 837)    2 084
   20 651    -    23 423    31 012    (40 992)    34 094

Current assets

                 

Inventories

   -    -    201    1 446    -    1 647

Trade and other receivables

   1 574    -    1 449    2 959    (2 199)    3 783

Cash and cash equivalents

   1    -    218    1 730    -    1 949

Other current assets

   30    -    51    693    -    774
   1 605    -    1 919    6 828    (2 199)    8 153

Total assets

   22 256    -    25 342    37 840    (43 191)    42 247

EQUITY AND LIABILITIES

                 

Equity

                 
Equity attributable to equity holders of AB InBev    20 395    -    18 166    20 652    (39 156)    20 057

Minority interests

   -    -    (5)    1 897    -    1 892
   20 395    -    18 161    22 549    (39 156)    21 949

Non-current liabilities

                 

Interest-bearing loans and borrowings

   843    -    3 367    5 259    (1 836)    7 633

Employee benefits

   3    -    166    750    -    919

Deferred tax liabilities

   -    -    16    673    -    689

Other non-current liabilities

   58    -    185    973    -    1 216
   904    -    3 734    7 655    (1 836)    10 457

Current liabilities

                 

Interest-bearing loans and borrowings

   261    -    1 724    1 989    (1 857)    2 117

Trade and other payables

   519    -    1 514    4 801    (342)    6 492

Other current liabilities

   177    -    209    846    -    1 232
   957    -    3 447    7 636    (2 199)    9 841

Total equity and liabilities

   22 256    -    25 342    37 840    (43 191)    42 247

 

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Condensed Consolidating Statement of Cash Flows

 

For the year ended 31 December 08

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

OPERATING ACTIVITIES

                 

Profit

   1 927    (114)    2 425    3 302    (4 414)    3 126
Depreciation, amortization and impairment    43    -    491    1 527    -    2 061
Additions/(reversals) in provisions and employee benefits    9    -    375    188    -    572

Net finance cost

   394    173    207    826    -    1 600

Income tax expense

   36    (98)    (135)    871    -    674

Investment in subsidiary income

   (2 227)    (58)    (2 242)    113    4 414    -

Other items

   18    -    (22)    (94)    -    (98)
Cash flow from operating activities before changes in working capital and use of provisions    200    (97)    1 099    6 733    -    7 935
Increase/(decrease) in trade and other payables    145    500    (12)    635    (279)    989

Other working capital and provisions

   (88)    -    (254)    (539)    204    (677)

Cash generated from operations

   257    403    833    6 829    (75)    8 247

Interest paid, net

   (36)    (5)    (243)    (565)    -    (849)

Dividends received

   1 835    -    2 131    1 762    (5 727)    1

Income tax paid

   (73)    -    (38)    (1 130)    -    (1 241)

Cash flow from operating activities

   1 983    398    2 683    6 896    (5 802)    6 158

INVESTING ACTIVITIES

                 
Acquisition of subsidiaries, net of cash acquired    (28 557)    (52 519)    128    (26 607)    55 304    (52 251)

Purchase of minority interests

   -    -    -    (853)    -    (853)
Acquisition of property, plant and equipment and of intangible assets    (97)    -    (956)    (1 961)    362    (2 652)
Net proceeds/(acquisition) of other assets    1 150    -    (4 169)    (338)    3 610    253

Cash Flow from Investing Activities

   (27 504)    (52 519)    (4 997)    (29 759)    59 276    (55 503)

FINANCING ACTIVITIES

                 
Net proceeds from the issue of share capital    9 733    26 519    2 038    26 774    (55 300)    9 764

Net purchase of treasury shares

   (152)    -    (636)    (9)    -    (797)

Proceeds from borrowings

   20 390    26 000    9 631    4 987    (4 587)    56 421

Payments on borrowings

   (2 184)    -    (5 812)    (4 634)    681    (11 949)
Cash net finance costs other than interests    (336)    -    72    (374)    -    (638)

Dividends paid

   (2 005)    -    (2 867)    (3 806)    5 756    (2 922)

Cash flow from financing activities

   25 446    52 519    2 426    22 938    (53 450)    49 879
Net increase/(decrease) in cash and cash equivalents    (75)    398    112    75    24    534
Cash and cash equivalents less bank overdrafts at beginning of year    1    -    183    1 647    -    1 831

Effect of exchange rate fluctuations

   74    -    (24)    (220)    (24)    (194)

Cash and cash equivalents less bank overdrafts at end of year

   -    398    271    1 502    -    2 171

 

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Condensed Consolidating Statement of Cash Flows

 

For the year ended 31 December 07

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

OPERATING ACTIVITIES

                 

Profit

   3 005    -    3 024    3 535    (5 397)    4 167

Depreciation, amortization and impairment

   29    -    281    1 165    -    1 475
Additions/(reversals) in provisions and employee benefits    17    -    62    107    -    186

Net finance cost

   21    -    107    690    -    818

Income tax expense

   32    -    89    767    -    888

Investment in subsidiary income

   (3 094)    -    (2 303)    -    5 397    -

Other items

   40    -    (514)    27    -    (447)
Cash flow from operating activities before changes in working capital and use of provisions    50    -    746    6 291    -    7 087
Increase/(decrease) in trade and other payables    (31)    -    73    463    (18)    487
Other working capital and provisions    (61)    -    (167)    (408)    23    (613)

Cash generated from operations

   (42)    -    652    6 346    5    6 961

Interest paid, net

   15    -    (109)    (700)    2    (792)

Dividends received

   3 053    -    1 719    804    (5 575)    1

Income tax paid

   (26)    -    (74)    (513)    -    (613)

Cash flow from operating activities

   3 000    -    2 188    5 937    (5 568)    5 557

INVESTING ACTIVITIES

                 
Acquisition of subsidiaries, net of cash acquired    (1 519)    -    (10)    (311)    1 580    (260)
Purchase of minority interests    -    -    -    (1 576)    -    (1 576)
Acquisition of property, plant and equipment and of intangible assets    (75)    -    (360)    (1 727)    -    (2 162)
Net proceeds/(acquisition) of other assets    (75)    -    2 352    430    (1 934)    773

Cash Flow from Investing Activities

   (1 669)    -    1 982    (3 184)    (354)    (3 225)

FINANCING ACTIVITIES

                 
Net proceeds from the issue of share capital    53    -    -    105    (43)    115
Net purchase of treasury shares    (820)    -    (2)    1    -    (821)
Proceeds from borrowings    3 023    -    2 867    5 395    (2 335)    8 950
Payments on borrowings    (3 001)    -    (2 945)    (5 232)    2 729    (8 449)
Cash net finance costs other than interests    (3)    -    (9)    (58)    -    (70)
Dividends paid    (595)    -    (3 976)    (2 071)    5 590    (1 052)

Cash flow from financing activities

   (1 343)    -    (4 065)    (1 860)    5 941    (1 327)
Net increase/(decrease) in cash and cash equivalents    (12)    -    105    893    19    1 005
Cash and cash equivalents less bank overdrafts at beginning of year    1    -    52    652    -    705

Effect of exchange rate fluctuations

   12    -    26    102    (19)    121
Cash and cash equivalents less bank overdrafts at end of year    1    -    183    1 647    -    1 831

 

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Table of Contents

Condensed Consolidating Statement of Cash Flows

 

For the year ended 31 December 06

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   Non-
Guarantors
   Eliminations    TOTAL

OPERATING ACTIVITIES

                 

Profit

   1 770    -    1 789    2 498    (3 390)    2 667
Depreciation, amortization and impairment    17    -    244    1 140    -    1 401
Additions/(reversals) in provisions and employee benefits    44    -    107    66    -    217
Net finance cost    (26)    -    76    543    -    593
Income tax expense    6    -    89    571    -    666
Investment in subsidiary income    (1 860)    -    (1 530)    -    3 390    -
Other items    27    -    (32)    (14)    -    (19)
Cash flow from operating activities before changes in working capital and use of provisions    (22)    -    743    4 804    -    5 525
Increase/(decrease) in trade and other payables    42    -    (27)    582    (49)    548
Other working capital and provisions    (70)    -    (95)    (841)    70    (936)
Cash generated from operations    (50)    -    621    4 545    21    5 137
Interest paid, net    19    -    (116)    (405)    4    (498)
Dividends received    698    -    947    821    (2 465)    1
Income tax paid    (2)    -    (70)    (446)    -    (518)
Cash flow from operating activities    665    -    1 382    4 515    (2 440)    4 122
INVESTING ACTIVITIES                  
Acquisition of subsidiaries, net of cash acquired    (11)    -    (2 105)    (1 045)    1 242    (1 919)
Purchase of minority interests    -    -    -    (928)    -    (928)
Acquisition of property, plant and equipment and of intangible assets    (76)    -    (328)    (1 327)    -    (1 731)
Net proceeds/(acquisition) of other assets    (170)    -    (503)    44    842    213
Cash Flow from Investing Activities    (257)    -    (2 936)    (3 256)    2 084    (4 365)
FINANCING ACTIVITIES                  
Net proceeds from the issue of share capital    102    -    1 150    120    (1 269)    103
Net purchase of treasury shares    (73)    -    -    (1)    -    (74)
Proceeds from borrowings    1 554    -    9 569    5 978    (9 037)    8 064
Payments on borrowings    (1 945)    -    (8 139)    (5 068)    8 192    (6 960)
Cash net finance costs other than interests    (2)    -    (2)    (94)    -    (98)
Dividends paid    (361)    -    (971)    (1 905)    2 463    (774)
Cash flow from financing activities    (725)    -    1 607    (970)    349    261
Net increase/(decrease) in cash and cash equivalents    (317)    -    53    289    (7)    18
Cash and cash equivalents less bank overdrafts at beginning of year    300    -    24    327    -    651
Effect of exchange rate fluctuations    18    -    (25)    36    7    36
Cash and cash equivalents less bank overdrafts at end of year    1    -    52    652    -    705

 

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Table of Contents
37. AB INBEV COMPANIES

Listed below are the most important AB InBev companies. A complete list of the company’s investments is available at AB InBev NV, Brouwerijplein 1, B-3000 Leuven, Belgium. The total number of companies consolidated (fully, proportional and equity method) is 397.

LIST OF MOST IMPORTANT FULLY CONSOLIDATED COMPANIES

 

NAME AND REGISTERED OFFICE OF FULLY CONSOLIDATED COMPANIES   

% OF ECONOMIC

INTEREST AS AT
31 DECEMBER 2008

ARGENTINA

    

CERVECERIA Y MALTERIA QUILMES SAICA y G - Charcas 5160 - Buenos Aires

   61.64

BELGIUM

    

INBEV NV – Grote Markt 1 - 1000 - Brussel

   Consolidating company

BRASSERIE DE L’ABBAYE DE LEFFE S.A. - Place de l’Abbaye 1 - 5500 - Dinant

   98.52

BROUWERIJ VAN HOEGAARDEN N.V. - Stoopkensstraat 46 - 3320 - Hoegaarden

   99.98

COBREW N.V. - Brouwerijplein 1 - 3000 - Leuven

   99.99

INBEV BELGIUM N.V. - Industrielaan 21 - 1070 - Brussel

   99.98

BOLIVIA

    

CERVECERIA BOLIVIANA NACIONAL S.A. - Av. Montes 400 and Chuquisaca Street - La Paz

   61.64

BRAZIL

    
CIA DE BEBIDAS DAS AMERICAS - AMBEV BRASIL - Rua Dr. Renato Paes de Barros, 1017, 4° Andar (parte), cj. 44 e 42 - Itaim Bibi, Sao Paulo    61.75

BULGARIA

    

KAMENITZA AD - Kapitan Raitcho Street 95 - Plovdiv

   85.12

CANADA

    

LABATT BREWING COMPANY LIMITED - 207 Queen’s Quay West, Suite 299 - M5J 1A7 - Toronto

   61.75

CHILE

    

CERVECERIA CHILE S.A. - Av. Presidente Eduado Frei Montalva 9600 - Quilicura

   61.64

CHINA

    
BUDWEISER WUHAN INTERNATIONAL BREWING COMPANY LIMITED - Qingduankou Shang Shou - Hanyang District - Wuhan City - Hubei 430051    97.06
HARBIN BREWING COMPANY LIMITED - 20 Youfang Street - Xiangfang District - Harbin, Heilongjiang Province    100.00

INBEV (ZHOUSHAN) BREWERY CO LTD - No.1 Zizhulin Road, Dinghai District - Zhou Shan

   99.98

INBEV BAISHA (HUNAN) BREWERY CO LTD - No. 304 Shao Shan Zhong Lu - Changsha

   99.98

INBEV DOUBLE DEER GROUP CO LTD - 234 Wu Tian Street - Wenzhou

   54.99

INBEV JINLONGQUAN (HUBEI) BREWERY CO LTD - 89 Chang Ning Street - Jingmen

   59.99

INBEV JINLONGQUAN (XIAOGAN) BREWERY CO LTD - No. 198 Chengzhan Street - Xiaogan

   59.99
INBEV KK (NINGBO) BREWERY CO LTD - 2 Ling Qiao Road. No.5 Building of Nanyuan Hotel - 315000 - Ningbo    99.98

INBEV SEDRIN BREWERY Co, Ltd - 660 Gong Ye Road, Putian Hanjiang District - Fujiang

   99.99

INBEV SHILIANG (ZHEJIANG) BREWERY CO LTD. - 159, Qi Xia Dong Road - Cheng Guan, Tiantai County

   99.98

INBEV ZHEDONG (ZHEHIANG) BREWERY CO. LTD - Yizhou Town, Yinzhou District – Ningbo

   99.98

NANJING INBEV JINLING BREWERY CO. LTD - 408 Long Pan Zhong Lu, - Nanjing

   99.98

CROATIA

    

ZAGREBACKA PIVOVARA D.D. - Ilica 224 - 10000 - Zagreb

   71.91

CZECH REPUBLIC

    

INBEV S.R.O. - Nadrazni 84 - CZ - 150 54 - Praha 4

   99.56

PIVOVARY STAROPRAMEN A.S. - Nadrazni 84 - CZ - 150 54 - Praha 4

   99.56

DOMINICAN REPUBLIC

    

EMBODOM - EMBOTELLADORA DOMENICANA CXA - Av. San Martin, 279 - Apartado Postal 723 - Santo Domingo

   40.63

ECUADOR

    

CERVESURSA CERVECERIA SURAMERICANA S.A. - Av. Amazonas E4-69 y Av. Patria - Quito

   61.75

FRANCE

    

INBEV FRANCE S.A. - Avenue Pierre Brossolette 14 BP 9 - 59280 - Armentières

   99.98

 

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Table of Contents
NAME AND REGISTERED OFFICE OF FULLY CONSOLIDATED COMPANIES   

% OF ECONOMIC

INTEREST AS AT
31 DECEMBER 2008

GERMANY

    

BRAUEREI BECK GmbH & CO. KG - Am Deich 18/19 - 28199 - Bremen

   99.98

BRAUEREI DIEBELS GmbH & CO.KG - Brauerei-Diebels-Strasse 1 - 47661 - Issum

   99.98

BRAUERGILDE HANNOVER AG - Hildesheimer Strasse 132 - 30173 - Hannover

   99.98

HAAKE-BECK BRAUEREI GmbH & Co. KG - Am Deich 18/19 - 28199 - Bremen

   99.92

HASSERÖDER BRAUEREI GmbH - Auerhahnring 1 - 38855 - Wernigerode

   99.98

INBEV GERMANY HOLDING GmbH - Am Deich 18/19 - 28199 - Bremen

   99.98

SPATEN - FRANZISKANER - BRÄU GmbH - Marsstrasse 46 + 48 - 80335 - München

   99.98

GRAND DUCHY OF LUXEMBURG

    

BRASSERIE DE LUXEMBOURG MOUSEL - DIEKIRCH - 1, Rue de la Brasserie - L-9214 - Diekirch

   95.54

GUATEMALA

    

INDUSTRIAS DEL ATLANTICO - 43 Calle 1-10 CLzd.Aguilar Batres Zona 12, Edificio Mariposa, nivel 4 - 01012 - Zacapa

   30.87

HUNGARY

    

BORSODI SORGYAR ZRt. - Rackoczi UT 81 - 3574 - Böcs

   98.62

MONTENEGRO

    

PIVARA “TREBJESA” A.D. – Njegoseva 18 – 81400 - Niksic

   72.69

PARAGUAY

    

CERVECERIA PARAGUAYA S.A. - Ruta Villeta KM 30 - Ypané

   61.64

PERU

    

COMPANIA CERVECERA AMBEV PERU SAC - Av. Los Laureles Mz. A Lt. 4 del Centro Poblado Menor Santa Maria de s/n Huachipa - Lurigancho, Chosica City Lima 15

   52.87

ROMANIA

    

INBEV ROMANIA SA - B-dul Dimitrie Pompei 9-9A - Cladirea 20 - etaj1, sector 2, cod 020335 - Sector 2 - Bucharest

   99.94

RUSSIA

    

OAO SUN INBEV - 28 Moscovskaya Street, Moscow region - 141600 - Klin

   99.77

SERBIA

    

AD APATINSKA PIVARA APATIN - Trg Oslobodjenja 5 - CS-25260 - Apatin

   98.99

SOUTH KOREA

    

ORIENTAL BREWERY CO. LTD - 52, Jungsam-ri, Hyeondo-myeon, Cheongwon-gun, Chungbuk - Korea

   99.98

THE NETHERLANDS

    

INBEV NEDERLAND N.V. - Ceresstraat 1 - 4811 CA - Breda

   99.99

INTERBREW INTERNATIONAL B.V. - Ceresstraat 1 - 4811 CA - Breda

   99.99

US

    

ANHEUSER-BUSCH COMPANIES, INC. - One Busch Place - St. Louis, MO 63118

   100.00

ANHEUSER-BUSCH INTERNATIONAL, INC. - One Busch Place - St. Louis, MO 63118

   100.00

ANHEUSER-BUSCH PACKAGING GROUP, INC. - 3636 S. Geyer Road - Sunset Hills, MO 63127

   100.00

BUSCH ENTERNTAINMENT CORPORATION - 9205 South Park Center Loop, Suite 400 - Orlando, FL 32819

   100.00

UKRAINE

    

SUN INBEV UKRAINE - Bozhenko 87 - 03150 - Kyiv

   99.77

UNITED KINGDOM

    

BASS BEERS WORLDWIDE LIMITED - Porter Tun House, 500 Capability Green - LU1 3LS - Luton

   99.98

INBEV UK LTD - Porter Tun House, 500 Capability Green - LU1 3LS - Luton

   99.98

STAG BREWING COMPANY LIMITED - The Stag Brewery - Lower Richmond Road - SW14 7ET -Mortlake, London

   100.00

URUGUAY

    

CERVECERIA Y MALTERIA PAYSSANDU S.A. - Rambla Baltasar Brum, 2933 - 11800 - Payssandu

   61.64

VENEZUELA

    

C. A. CERVECERIA NACIONAL - Av. Principal Boleita Norte, Edif. Draza, Piso 2 - Caracas

   31.47

 

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Table of Contents

LIST OF MOST IMPORTANT ASSOCIATED COMPANIES

 

NAME AND REGISTERED OFFICE OF ASSOCIATES    % OF ECONOMIC
INTEREST AS AT
31 DECEMBER 2008

CHINA

    
TSINGTAO BREWERY COMPANY LIMITED - Tsingtao Beer Tower - May Fourth Square - Hong Kong Road Central - Qingdao, Shandong - 26607    27.00

MEXICO

    
GRUPO MODELO S.A.B. de C.V. - Torre Acuario - Javier Barros Sierra No 555 - Piso 6 - Colonia Zedec Santa Fe - Delagacion Alvaro Obregon - 01210 México, D.F.    50.20

 

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Table of Contents
1. Unaudited condensed consolidated interim financial statements

 

1.1. Unaudited condensed consolidated interim income statement

 

For the six month period ended 30 June

Million US dollar, except earnings per share in US dollar

   Notes   2009   2008

Revenue

     17 698   10 563

Cost of sales

     (8 390)   (4 465)

Gross profit

     9 308   6 098

Distribution expenses

     (1 276)   (1 296)

Sales and marketing expenses

     (2 271)   (1 694)

Administrative expenses

     (1 090)   (730)

Other operating income/(expenses)

     350   184

Restructuring (including impairment losses)

   7   (140)   (48)

Business and asset disposal

   7   47   (6)

Profit from operations

     4 928   2 508

Finance cost

   8   (2 239)   (631)

Finance income

   8   246   118

Net finance cost

     (1 993)   (513)

Share of result of associates

     228   3

Profit before tax

     3 163   1 998

Income tax expense

   9   (820)   (232)

Profit

     2 343   1 766

Attributable to:

      

Equity holders of AB InBev

     1 787   1 207

Minority interests

     556   559

Basic earnings per share 1

     1.13   1.26

Diluted earnings per share 1

     1.12   1.25

 

1.2. Unaudited condensed consolidated interim statement of comprehensive income

 

For the six month period ended 30 June

Million US dollar

  2009   2008

Profit

  2 343   1 766

Other comprehensive income:

   

Exchange differences on translation of foreign operations (gains/(losses))

  1 465   891

Cash flow hedges

   

Recognized in equity

  616   210

Removed from equity and included in profit or loss

  74   (161)

Removed from equity and included in the initial cost of inventories

  (132)   (50)

Actuarial gains/(losses)

  (2)   -

Other comprehensive income, net of tax

  2 021   890

Total comprehensive income

  4 364   2 656

Attributable to:

   

Equity holders of AB InBev

  3 683   1 960

Minority interests

  681   696

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

1 2008 Basic and diluted earnings per share restated in accordance with IAS33 (refer to note 15 Changes in equity and earnings per share ).

 

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Table of Contents
1.3. Unaudited condensed consolidated interim statement of financial position

 

As at

Million US dollar

   Notes   30 June 2009   31 December 2008

ASSETS

      

Non-current assets

      

Property, plant and equipment

   10   18 937   19 674

Goodwill

   11   50 391   49 556

Intangible assets

   12   23 694   23 673

Investments in associates

     6 472   6 868

Investment securities

     273   239

Deferred tax assets

     1 059   932

Employee benefits

     11   8

Trade and other receivables

     1 432   1 228
     102 269   102 178

Current assets

      

Investment securities

     1   270

Inventories

     2 602   2 903

Income tax receivable

     344   580

Trade and other receivables

     4 333   4 242

Cash and cash equivalents

   13   6 339   2 936

Assets held for sale

   14   1 811   51
     15 430   10 982

Total assets

     117 699   113 160

EQUITY AND LIABILITIES

      

Equity

      

Issued capital

   15   1 731   1 730

Share premium

     17 492   17 477

Reserves

     (1 258)   (3 247)

Retained earnings

     7 621   6 482

Equity attributable to equity holders of AB InBev

     25 586   22 442

Minority interests

     2 413   1 989
     27 999   24 431

Non-current liabilities

      

Interest-bearing loans and borrowings

   16   55 663   48 025

Employee benefits

     2 841   3 009

Deferred tax liabilities

     11 908   12 076

Trade and other payables

     2 283   2 891

Provisions

     903   796
     73 598   66 797

Current liabilities

      

Bank overdrafts

   13   150   765

Interest-bearing loans and borrowings

   16   3 880   11 301

Income tax payable

     1 119   405

Trade and other payables

     10 317   9 003

Provisions

     390   458

Liabilities held for sale

   14   246   -
     16 102   21 932

Total equity and liabilities

     117 699   113 160

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

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Table of Contents
1.4. Unaudited condensed consolidated interim statement of changes in equity

 

    Attributable to equity holders of AB InBev        
Million US dollar   Issued
capital
  Share
premium
  Treasury
shares
 

Share-

based

payment
reserves

  Translation
reserves
  Hedging
reserves
 

Actuarial
gains/

losses

  Other
reserves
  Retained
earnings
  Total   Minority
interest
  Total
equity

As per 1 January 2008

  559   8 802   (703)   117   4 893   89   (292)   (25)   6 617   20 057   1 892   21 949

Profit

  -   -   -   -   -   -   -   -   1 207   1 207   559   1 766

Other comprehensive income

                       

Exchange differences on translation of foreign operations gains/(losses))

  -   -   -   -   742   -   -   -   -   742   149   891

Cash flow hedges

  -   -   -   -   -   14   -   -   -   14   (15)   (1)

Actuarial gains/losses

  -   -   -   -       (3)   -   -   (3)   3   -

Total comprehensive income

  -   -   -   -   742   14   (3)   -   1 207   1 960   696   2 656

Shares issued

  1   35   -   -   -   -   -   -   -   36   -   36

Dividends

  -   -   -   -   -   -   -   -   (2 001)   (2 001)   (254)   (2 255)

Share-based payments

  -   -   -   (6)   -   -   -   -   -   (6)   -   (6)

Treasury shares

  -   -   (1 043)   -   -   -   -   (6)   -   (1 049)   (3)   (1 052)

Other

  -   -   -   -   -   -   -   (2)   -   (2)   9   7

Scope changes

  -   -   -   -   -   -   -   -   22   22   (273)   (251)

As per 30 June 2008

  560   8 837   (1 746)   111   5 635   103   (295)   (33)   5 845   19 017   2 067   21 084

 

    Attributable to equity holders of AB InBev        
Million US dollar   Issued
capital
  Share
premium
  Treasury
shares
 

Share-

based

payment
reserves

  Translation
reserves
  Hedging
reserves
 

Actuarial
gains/

losses

  Other
reserves
  Retained
earnings
  Total   Minority
interest
  Total
equity

As per 1 January 2009

  1 730   17 477   (997)   123   1 027   (2 242)   (712)   (446)   6 482   22 442   1 989   24 431

Profit

  -   -   -   -   -   -   -   -   1 787   1 787   556   2 343

Other comprehensive income

                       

Exchange differences on translation of foreign operations (gains/(losses))

  -   -   -   -   1 320   -   -   -   -   1 320   145   1 465

Cash flow hedges

  -   -   -   -   -   578   -   -   -   578   (20)   558

Actuarial gains/losses

  -   -   -   -   -   -   (2)   -   -   (2)   -   (2)

Total comprehensive income

  -   -   -   -   1 320   578   (2)   -   1 787   3 683   681   4 364

Shares issued

  1   15   -   -   -   -   -   -   -   16   -   16

Dividends

  -   -   -   -   -   -   -   -   (678)   (678)   (267)   (945)

Share-based payments

  -   -   -   78   -   -   -   -   -   78   6   84

Treasury shares

  -   -   32   -   -   -   -   (17)   -   15   (2)   13

Other

  -   -   -   -   -   -   -   -   28   28   10   38

Scope changes

  -   -   -   -   -   -   -   -   2   2   (4)   (2)

As per 30 June 2009

  1 731   17 492   (965)   201   2 347   (1 664)   (714)   (463)   7 621   25 586   2 413   27 999

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

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Table of Contents
1.5. Unaudited condensed consolidated interim statement of cash flows

 

For the six month period ended 30 June

Million US dollar

  2009   2008

OPERATING ACTIVITIES

   

Profit

  2 343   1 766

Depreciation, amortization and impairment

  1 361   842

Impairment losses on receivables and inventories

  58   29

Additions/(reversals) in provisions and employee benefits

  21   109

Net financing cost

  1 993   513

Loss/(gain) on sale of property, plant and equipment and intangible assets

  (107)   (3)

Loss/(gain) on sale of subsidiaries and associates

  (1)   -

Loss/(gain) on assets held for sale

  -   (19)

Equity-settled share-based payment expense

  97   46

Income tax expense

  820   232

Other non-cash items included in the profit

  45   2

Share of result of associates

  (228)   (3)

Cash flow from operating activities before changes in working capital and use of provisions

  6 402   3 514

Decrease/(increase) in trade and other receivables

  (126)   (137)

Decrease/(increase) in inventories

  96   (259)

Increase/(decrease) in trade and other payables

  (15)   (102)

Use of provisions

  (279)   (206)

Cash generated from operations

  6 078   2 810

Interest paid

  (1 004)   (574)

Interest received

  45   59

Income tax paid

  (52)   (466)

CASH FLOW FROM OPERATING ACTIVITIES

  5 067   1 829

INVESTING ACTIVITIES

   

Proceeds from sale of property, plant and equipment and of intangible assets

  166   41

Proceeds from sale of associates

  901   10

Sale of subsidiaries, net of cash disposed of

  (4)   6

Acquisition of subsidiaries, net of cash acquired

  (529)   (76)

Purchase of minority interests

  -   (858)

Acquisition of property, plant and equipment and of intangible assets

  (674)   (1 115)

Net proceeds/(acquisition) of other assets

  291   (30)

Net repayments/(payments) of loans granted

  6   3

CASH FLOW FROM INVESTING ACTIVITIES

  157   (2 019)

FINANCING ACTIVITIES

   

Proceeds from the issue of share capital

  33   36

Purchase of treasury shares

  -   (1 080)

Proceeds from borrowings

  10 598   8 083

Payments on borrowings

  (11 540)   (4 902)

Cash net financing costs other than interests

  132   (251)

Payment of finance lease liabilities

  (2)   (4)

Dividends paid

  (673)   (2 212)

CASH FLOW FROM FINANCING ACTIVITIES

  (1 452)   (330)

Net increase/(decrease) in cash and cash equivalents

  3 772   (520)

Cash and cash equivalents less bank overdrafts at beginning of period

  2 171   1 831

Effect of exchange rate fluctuations

  246   (150)

Cash and cash equivalents less bank overdrafts at end of period

  6 189   1 161

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

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1.6. Notes to the unaudited condensed consolidated interim financial statements

 

1  

Corporate information

   F-89
2  

Statement of compliance

   F-89
3  

Summary of significant accounting policies

   F-89
4  

Use of estimates and judgments

   F-92
5  

Segment reporting

   F-94
6  

Acquisitions and disposals of subsidiaries

   F-96
7  

Exceptional items

   F-97
8  

Finance cost and income

   F-97
9  

Income taxes

   F-98
10  

Property, plant and equipment

   F-99
11  

Goodwill

   F-100
12  

Intangible assets

   F-101
13  

Cash and cash equivalents

   F-101
14  

Assets and liabilities held for sale

   F-102
15  

Changes in equity and earnings per share

   F-102
16  

Interest-bearing loans and borrowings

   F-103
17  

Share-based payments

   F-105
18  

Risks arising from financial instruments

   F-107
19  

Contingencies

   F-108
20  

Related parties

   F-109
21  

Events after the balance sheet date

   F-110
22  

Supplemental Unaudited Guarantor Interim Financial Information

   F-110

 

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1. CORPORATE INFORMATION

Anheuser-Busch InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium and has established an American depositary receipt facility in respect of its ordinary shares (OTC: AHBIY). It is the leading global brewer and one of the world’s top five consumer products companies. A true consumer-centric, sales driven company, Anheuser-Busch InBev manages a portfolio of nearly 300 brands that includes global flagship brands Budweiser, Stella Artois and Beck’s, fast growing multi-country brands like Leffe and Hoegaarden, and strong “local jewels” such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, and Jupiler, among others. In addition, the company owns a 50 percent equity interest in the operating subsidiary of Grupo Modelo, Mexico’s leading brewer and owner of the global Corona brand. Anheuser-Busch InBev’s dedication to heritage and quality is rooted in brewing traditions that originate from the Den Horen brewery in Leuven, Belgium, dating back to 1366 and the pioneering spirit of the Anheuser & Co brewery, established in 1860 in St. Louis, USA. Geographically diversified with a balanced exposure to developed and developing markets, Anheuser-Busch InBev leverages the collective strengths of its 120,000 employees based in operations in over 30 countries across the world. The company strives to be the Best Beer Company in a Better World. On a combined basis for 2008, the company would have generated revenues of 39 billion US dollar.

On 18 November 2008, InBev announced the completion of its acquisition of Anheuser-Busch Companies, Inc. (“Anheuser-Busch”), following approval from shareholders of both companies. Anheuser-Busch’s results are included in Anheuser-Busch InBev’s result as from this date. InBev changed its name to Anheuser-Busch InBev to reflect the heritage and traditions of Anheuser-Busch. Anheuser-Busch became a wholly owned subsidiary of Anheuser-Busch InBev and retained its headquarters in St. Louis, MO. St. Louis also became the North American headquarters for the combined operations in North America.

The unaudited condensed consolidated interim financial statements of the company for the period ended 30 June 2009 comprise the company and its subsidiaries (together referred to as “AB InBev” or the “company”) and the company’s interest in associates and jointly controlled entities. The unaudited condensed consolidated interim financial statements as of 30 June 2009 and for the six months ended 30 June 2009 and 30 June 2008 are unaudited, however in the opinion of the company, the interim data include all adjustments, consisting of only normally recurring adjustments, necessary for a fair statement of the results for the interim period.

The unaudited condensed consolidated interim financial statements were authorized for issue by the board of directors on 12 August 2009.

 

2. STATEMENT OF COMPLIANCE

The unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting as issued by the International Accounting Standard Board (IASB). They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the company as at and for the year ended 31 December 2008. AB InBev has not applied IFRS requirements that were not yet effective in 2009.

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied are consistent with those applied in the annual consolidated financial statements ended 31 December 2008, except as described below.

 

(A) FUNCTIONAL AND PRESENTATION CURRENCY

Effective 1 January 2009, the company changed the presentation currency of the consolidated financial statements from the euro to the US dollar, reflecting the post-Anheuser-Busch acquisition profile of the company’s revenue and cash flows, which are now primarily generated in US dollar and US dollar-linked currencies. AB InBev believes that this change provides greater alignment of the presentation currency with AB InBev’s most significant operating currency and underlying financial performance. For comparability purposes, the company has restated the historical financial statements as of and for the year ended 31 December 2008 and as of and for the six months ended 30 June 2008, from the euro to the US dollar. Unless otherwise specified, all financial information included in these financial statements have been stated in US dollar and has been rounded to the nearest million.

 

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(B) SUMMARY OF CHANGES IN ACCOUNTING POLICIES

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2009.

IAS 1 (revised) Presentation of financial statements

The revised standard prohibits the presentation of items of income and expenses (that is ‘non-owner changes in equity’) in the statement of changes in equity, requiring ‘non-owner changes in equity’ to be presented separately from owner changes in equity. All ‘non-owner changes in equity’ are required to be shown in a performance statement.

Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income).

AB InBev has elected to present two statements: an income statement and a statement of comprehensive income. The interim financial statements have been prepared under the revised disclosure requirements.

IFRS 8 Operating Segments

Effective from 1 January 2009 onwards, this standard replaces IAS 14 Segment Reporting . It requires AB InBev’s external segment reporting to be based on its internal reporting to its “chief operating decision maker”, which makes decisions on the allocation of resources and assesses the performance of the reportable segments. The application of this new standard did not have an effect on how AB InBev presents its segments.

For more details on the basis on which the segment information is prepared and reconciled to the amounts presented in the income statement and balance sheet, refer to Note 5 Segment reporting in the financial statements of this report.

IAS 23 Borrowing Costs – amended

In March 2007, the IASB issued amendments to IAS 23, Borrowing Costs . The main change from the previous version is the removal of the option of immediately recognizing as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. The cost of an asset will in future include all costs incurred in getting it ready for use or sale. The company prospectively adopted the amendment as of 1 January 2009 with no material effect on its financial result or financial position.

IFRS 2 Share-based Payment – amended

In January 2008, the IASB issued an amendment to IFRS 2, Share-based Payment . The amendment clarifies that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. The company adopted the amendment as of 1 January 2009 with no material effect on its financial result or financial position.

IFRIC 13 Customer Loyalty Programs

In June 2007, the IFRIC issued IFRIC 13, Customer Loyalty Programs . IFRIC 13 addresses how companies, that grant their customers loyalty award credits (often called “points”) when buying goods or services, should account for their obligation to provide free or discounted goods or services if and when the customers redeem the points. Customers are implicitly paying for the points they receive when they buy other goods or services. Some revenue should be allocated to the points. Therefore, IFRIC 13 requires companies to estimate the value of the points to the customer and defer this amount of revenue as a liability until they have fulfilled their obligations to supply awards. AB InBev adopted the interpretation as of 1 January 2009 with no material effect on its financial result or financial position.

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

In July 2008, the IFRIC issued IFRIC 16 Hedges of a Net Investment in a Foreign Operation . IFRIC 16 provides guidance on:

 

   

identifying the foreign currency risks that qualify as a hedged risk in the hedge of a net investment in a foreign operation;

 

   

where, within a group, hedging instruments that are hedges of a net investment in a foreign operation can be held to qualify for hedge accounting; and

 

   

how an entity should determine the amounts to be reclassified from equity to profit or loss for both the hedging instrument and the hedged item.

 

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IFRIC 16 concludes that the presentation currency does not create an exposure to which an entity may apply hedge accounting. Consequently, a parent entity may designate as a hedged risk only the foreign exchange differences arising from a difference between its own functional currency and that of its foreign operation. In addition, the hedging instrument(s) may be held by any entity or entities within the group. While IAS 39 must be applied to determine the amount that needs to be reclassified to profit or loss from the foreign currency translation reserve in respect of the hedging instrument, IAS 21 must be applied in respect of the hedged item. The interpretation is mandatory for annual periods beginning on or after October 1, 2008. It does not have a material effect on the company’s financial result or financial position.

 

(C) FOREIGN CURRENCIES

FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted for at exchange rates prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the balance sheet date rate. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to US dollar at foreign exchange rates ruling at the dates the fair value was determined.

EXCHANGE RATES

The following exchange rates have been used in preparing the financial statements.

 

     Closing rate
1 US dollar equals:    30 June 2009    31 December 2008    30 June 2008

Argentinean peso

   3.795208    3.449805    3.043399

Brazilian real

   1.951601    2.337001    1.591902

Canadian dollar

   1.151480    1.221383    1.011292

Chinese yuan

   6.830670    6.823021    6.854283

Euro

   0.707514    0.718546    0.634357

Mexican peso

   13.167216    13.818990    10.304527

Pound sterling

   0.602873    0.684415    0.502569

Russian ruble

   31.002761    29.776885    23.412327

South Korean won

   1 274.800000    1 320.856618    1 048.523967

Ukrainian hryvnia

   7.609805    7.800109    4.838763
     Average rate
1 US dollar equals:    30 June 2009    30 June 2008

Argentinean peso

   3.580611    3.132669

Brazilian real

   2.249458    1.708628

Canadian dollar

   1.204165    1.001182

Chinese yuan

   6.844261    7.083420

Euro

   0.749823    0.653998

Mexican peso

   14.063224    10.638611

Pound sterling

   0.676322    0.505791

Russian ruble

   33.031850    23.981445

South Korean won

   1 353.471119    977.575486

Ukrainian hryvnia

   7.704241    5.030870

 

(D) RECENTLY ISSUED IFRS

To the extent that new IFRS requirements are expected to be applicable in the future, they have been summarized hereafter. For the period ended 30 June 2009, they have not been applied in preparing these unaudited condensed consolidated financial statements.

Revised IFRS 3 Business Combinations (2008)

Revised IFRS 3 Business Combinations (2008)  incorporates the following changes that are likely to be relevant to AB InBev’s operations:

 

   

The definition of a business has been broadened, which is likely to result in more acquisitions being treated as business combinations.

 

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Contingent consideration will be measured at fair value, with subsequent changes therein recognized in profit or loss.

 

   

Transaction costs, other than share and debt issue costs, will be expensed as incurred.

 

   

Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognized in profit or loss.

 

   

Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis.

Revised IFRS 3, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, will be applied prospectively and therefore there will be no impact on prior periods in AB InBev’s 2010 consolidated financial statements.

Amended IAS 27 Consolidated and Separate Financial Statements (2008)

Amended IAS 27 Consolidated and Separate Financial Statements (2008)  requires accounting for changes in ownership interests by AB InBev in a subsidiary, while maintaining control, to be recognized as an equity transaction. When AB InBev loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognized in profit or loss. The amendments to IAS 27, which become mandatory for AB InBev’s 2010 consolidated financial statements, are not expected to have a material impact on the consolidated financial statements.

IFRIC 17 Distributions of Non-cash Assets to Owners

IFRIC 17 Distributions of Non-cash Assets to Owners addresses the treatment of distributions in kind to shareholders. Outside the scope of IFRIC 17 are distributions in which the assets being distributed are ultimately controlled by the same party or parties before and after the distribution (common control transactions). A liability has to be recognized when the dividend has been appropriately authorized and is no longer at the discretion of the entity, to be measured at the fair value of the non-cash assets to be distributed. IFRIC 17, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, with prospective application, is not expected to have a material impact on the consolidated financial statements.

IFRIC 18 Transfers of Assets from Customers

IFRIC 18 Transfers of Assets from Customers addresses the accounting by access providers for property, plant and equipment contributed to them by customers. Recognition of the assets depends on who controls it. When the asset is recognized by the access provider, it is measured at fair value upon initial recognition. The timing of the recognition of the corresponding revenue depends on the facts and circumstances. IFRIC 18, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, with prospective application, is not expected to have a material impact on the consolidated financial statements.

Amendment to IAS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items

Amendment to IAS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items provides additional guidance concerning specific positions that qualify for hedging (“eligible hedged items”). The amendment to IAS 39, which becomes mandatory for AB InBev’s 2010 consolidated financial statements, with retrospective application, is not expected to have a material impact the consolidated financial statements.

Improvements to IFRSs (2009)

Improvements to IFRSs (2009)  is a collection of minor improvements to existing standards. This collection, which has various adoption dates, is not expected to have a material impact on the consolidated financial statements.

 

4. USE OF ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

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Although each of its significant accounting policies reflects judgments, assessments or estimates, AB InBev believes that the following accounting policies reflect the most critical judgments, estimates and assumptions that are important to its business operations and the understanding of its results: business combinations, intangible assets, goodwill, impairment, provisions, share-based payments, employee benefits and accounting for current and deferred tax.

The fair values of acquired identifiable intangibles are based on an assessment of future cash flows. Impairment analyses of goodwill and indefinite-lived intangible assets are performed annually and whenever a triggering event has occurred, in order to determine whether the carrying value exceeds the recoverable amount. These calculations are based on estimates of future cash flows.

The company uses its judgment to select a variety of methods including the discounted cash flow method and option valuation models and make assumptions about the fair value of financial instruments that are mainly based on market conditions existing at each balance sheet date.

Actuarial assumptions are established to anticipate future events and are used in calculating pension and other postretirement benefit expense and liability. These factors include assumptions with respect to interest rates, expected investment returns on plan assets, rates of increase in health care costs, rates of future compensation increases, turnover rates, and life expectancy.

Judgments made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the relevant notes hereafter.

In preparing these unaudited condensed consolidated interim financial statements, the significant judgments made by management in applying the company’s accounting policies and the key sources of estimating uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2008 , except as for the recognition of a curtailment following the amendment of certain pensions and post-retirement healthcare benefits going forward as part of the Anheuser-Busch integration. The effect of these changes was estimated by actuaries and led to an increase of profit from operations and of profit by 240m US dollar and 147m US dollar, respectively, for the six months ended 30 June 2009.

 

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5. SEGMENT REPORTING

Segment information is presented by geographical segments, consistent with the information that is available and evaluated regularly by the chief operating decision maker. AB InBev operates its business through seven zones. Regional and operating company management is responsible for managing performance, underlying risks, and effectiveness of operations. Internally, AB InBev management uses performance indicators such as normalized profit from operations (normalized EBIT) and normalized EBITDA as measures of segment performance and to make decisions regarding allocation of resources. These measures are reconciled to segment profit in the tables presented.

 

For the six month
period ended
30 June (balance
sheet
comparatives at
31 December
2008)

Million US dollar,

except volume
(million hls)

  North America  

Latin America

North

  Latin America
South
  Western Europe   Central and Eastern
Europe
  Asia Pacific   Global export and
holding companies
  Consolidated
    2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008

Volume

  69   6   50   47   16   16   16   17   21   23   26   17   2   2   200   128

Revenue

  7 871   1 122   3 111   3 731   883   812   2 049   2 427   1 222   1 576   1 074   685   1 487   210   17 698   10 563

Cost of goods sold

  (3 785)   (363)   (986)   (1 301)   (351)   (344)   (922)   (1 141)   (584)   (799)   (571)   (361)   (1 191)   (156)   (8 390)   (4 465)

Distribution expenses

  (398)   (212)   (323)   (437)   (78)   (65)   (228)   (310)   (122)   (203)   (76)   (46)   (51)   (23)   (1 276)   (1 296)

Sales and marketing expenses

  (793)   (144)   (414)   (415)   (77)   (91)   (379)   (508)   (226)   (328)   (256)   (162)   (126)   (45)   (2 271)   (1 694)

Administrative expenses

  (297)   (59)   (232)   (223)   (34)   (28)   (182)   (186)   (88)   (79)   (77)   (46)   (180)   (109)   (1 090)   (730)

Other operating income/(expenses)

  73   (3)   90   101   (2)   5   (52)   (101)   (62)   (77)   7   (2)   297   261   350   184
Normalized profit from operations (normalized EBIT)   2 672   342   1 247   1 456   342   288   285   181   140   89   100   68   236   138   5 021   2 562

Exceptional items (refer note 7)

  45   (2)   98   (2)   (6)   (1)   (62)   (49)   (1)   -   (15)   (2)   (153)   2   (93)   (54)

Profit from operations (EBIT)

  2 717   340   1 345   1 454   335   287   223   132   139   89   86   66   83   140   4 928   2 508

Net finance cost

  (289)   (30)   (204)   (276)   (33)   (45)   (115)   (253)   (24)   (33)   (8)   (5)   (1 320)   129   (1 993)   (513)

Share of result of associates

  228   -   -   -   -   2   -   -   -   -   -   -   -   1   228   3

Profit before tax

  2 656   310   1 142   1 178   302   245   108   (121)   115   56   78   61   (1 237)   269   3 163   1 998

Income tax expense

  (982)   (100)   (153)   (124)   (82)   (74)   11   14   (21)   (24)   (40)   (29)   446   104   (820)   (232)

Profit

  1 674   210   989   1 054   220   171   119   (107)   94   33   38   32   (791)   373   2 343   1 766

Normalized EBITDA

  3 137   402   1 440   1 673   412   351   469   419   291   255   205   141   429   156   6 383   3 397

Exceptional items

  45   (2)   98   (2)   (6)   (1)   (62)   (49)   (1)   -   (15)   (2)   (153)   2   (93)   (54)
Depreciation, amortization, and impairment expense   (465)   (60)   (193)   (217)   (70)   (62)   (185)   (238)   (151)   (166)   (105)   (74)   (193)   (19)   (1 362)   (835)

Net finance costs

  (289)   (30)   (204)   (276)   (33)   (45)   (115)   (253)   (24)   (33)   (8)   (5)   (1 320)   129   (1 993)   (513)

Share of results of associates

  228   -   -   -   -   2   -   -   -   -   -   -   -   1   228   3

Income tax expense

  (982)   (100)   (153)   (124)   (82)   (74)   11   14   (21)   (24)   (40)   (29)   446   104   (820)   (232)

Profit

  1 674   210   989   1 054   220   171   119   (107)   94   33   38   32   (791)   373   2 343   1 766

 

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For the six month
period ended
30 June (balance
sheet
comparatives at
31 December
2008)

Million US dollar,

except volume
(million hls)

  North America  

Latin America

North

  Latin America
South
  Western Europe   Central and Eastern
Europe
  Asia Pacific   Global export and
holding companies
  Consolidated
    2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008

EBITDA margin (normalized) in %

  39.9%   35.8%   46.3%   44.8%   46.6%   43.2%   22.9%   17.3%   23.8%   16.2%   19.1%   20.6%   -   -   36.1%   32.2%

Segment assets

  71 815   69 633   14 240   12 052   3 754   3 841   6 301   6 169   3 736   3 804   4 501   5 344   7 181   8 210   111 528   109 053

Intersegment elimination

  -   -   -   -   -   -   -   -   -   -   -   -   -   -   (2 473)   (1 308)

Non-segmented assets

  -   -   -   -   -   -   -   -   -   -   -   -   -   -   8 644   5 415

Total assets

                              117 699   113 160

Segment liabilities

  6 331   6 075   2 663   2 470   942   763   2 756   2 577   937   722   1 357   1 108   2 060   1 389   17 046   15 104

Intersegment elimination

  -   -   -   -   -   -   -   -   -   -   -   -   -   -   (2 473)   (1 308)

Non-segmented liabilities

  -   -   -   -   -   -   -   -   -   -   -   -   -   -   103 126   99 364

Total liabilities

                              117 699   113 160

 

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6. ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES

The table below summarizes the impact of the acquisitions and disposals on the financial position of AB InBev:

 

For the six month period ended 30 June

Million US dollar

 

2009

Acquisitions

       

2009

Disposals

 

2008

Acquisitions

 

2008

Disposals

Non-current assets

         

Property, plant and equipment

  15     -   -   -

Intangible assets

  12     -   9   -

Deferred tax assets

  -     (1)   -   -

Current assets

         

Investment in associates

  (12)     -   -   -

Inventories

  4     (1)   -   -

Trade and other receivables

  4     -   -   -

Cash and cash equivalents

  6     (5)   -   -

Assets held for sale

  -     (42)   -   -

Non-current liabilities

         

Interest-bearing loans and borrowings

  (2)     -   -   -

Employee benefits

  (1)     -    

Trade and other payables

  -     -   -   -

Provisions

  (1)     -   -   -

Deferred tax liabilities

  (1)     -   -   -

Current liabilities

         

Interest-bearing loans and borrowings

  -     4   -   -

Income tax payable

  (2)     -   -   -

Trade and other payables

  (12)     3   -   -

Liabilities held for sale

  -     42   -   -
                   

Net identifiable assets and liabilities

  10     -   9   -

Loss/(gain) on disposal

  -     (1)   -   -

Goodwill on acquisition

  17     -   67   -

Net cash received from last years’ disposal

  -     -   -   (6)

Net cash paid from last years’ acquisition

  508     -   -   -
                   

Consideration paid/(received), satisfied in cash

  535     (1)   76   (6)

Cash (acquired)/disposed of

  (6)     5   -   -
                   

Net cash outflow/(inflow)

  529     4   76   (6)

The following main transactions took place in the first half of 2009:

 

 

In March 2009, the company acquired Corporacion Boliviano de Bebidas for a total cash consideration of 27m US dollar. The amounts recognized at the acquisition date for each class of the company’s assets and liabilities are included in the column ‘2009 Acquisitions’ of the above table. Costs directly attributable to the acquisition were less than 1m US dollar. Goodwill recognized on this transaction amounts to 9m US dollar.

 

 

The company also acquired local distributors. As these distributors are immediately integrated in the AB InBev operations, no separate reporting is maintained on their contributions to the AB InBev profit. Goodwill recognized on these transactions amounted to 8m US dollar.

 

 

Net cash paid from last year’s acquisition of 508m US dollar mainly reflects the settlement of the outstanding consideration payable to former Anheuser-Busch shareholders who had not yet claimed the proceeds as at 2008 year end, as well as the settlement of transaction costs related to the Anheuser-Busch acquisition. The company is still in the process of finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed in compliance with IFRS 3. The completion of this purchase price allocation will be finalized by November 2009 and may result in further adjustment to the carrying value of Anheuser-Busch’s recorded assets and liabilities and the determination of any residual amount that will be allocated to goodwill.

 

 

The sale of our integrated distribution network in France (CafeIn) was closed in the first half of 2009. The amounts derecognized at the selling date for each class of their assets and liabilities represent the main movements in the column ‘2009 Disposals’ of the above table.

 

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7. EXCEPTIONAL ITEMS

IAS 1 Presentation of financial statements requires material items of income and expense to be disclosed separately. Exceptional items are items, which in management’s judgment, need to be disclosed by virtue of their size or incidence in order for the user to obtain a proper understanding of the financial information. The company considers these items to be of significance in nature, and accordingly, management has excluded these from their segment measure of performance as noted in note 5 Segment Reporting .

The exceptional items included in the income statement are as follows:

 

For the six month period ended 30 June

Million US dollar

   2009    2008

Restructuring (including impairment losses)

   (140)    (48)

Business and asset disposal

   47    (6)

The exceptional restructuring charges for the six-months ended 30 June 2009 total 140m US dollar. The charges are primarily related to the Anheuser-Busch integration, organizational alignments and outsourcing activities in Western Europe and Asia Pacific. These changes aim to eliminate overlap or duplicated processes and activities across functions and zones. These one time expenses as a result of the series of decisions will provide us with a lower cost base besides a stronger focus on AB InBev’s core activities, quicker decision-making and improvements to efficiency, service and quality.

The 2009 business and asset disposals of 47m US dollar mainly represent the sale of assets of InBev USA LLC (also doing business under the name Labatt USA) to an affiliate of KPS Capital Partners, LP.

The 2008 exceptional restructuring charges of 48m US dollar are mainly the result of organizational alignments and outsourcing of activities in Western Europe.

All the above amounts are before income taxes. The 2009 exceptional items as at 30 June increased income taxes by 6m US dollar, whereas the 2008 exceptional items as at 30 June decreased income taxes by (13)m US dollar.

 

8. FINANCE COST AND INCOME

RECOGNIZED IN PROFIT OR LOSS

FINANCE COSTS

 

For the six month period ended 30 June

Million US dollar

   2009    2008

Interest expense

   (1 785)    (498)

Capitalization of borrowing cost

   1    -

Accretion expense

   (208)    (10)

Losses on hedging instruments that are not part of a hedge accounting relationship

   (113)    (21)

Losses from hedge ineffectiveness

   (67)    -

Taxes on financial transactions

   (11)    (18)

Net foreign exchange losses

   -    (58)

Other financial costs, including bank fees

   (56)    (26)
   (2 239)    (631)

The increase of the finance costs is mainly explained by the interest charges on the existing Anheuser-Busch debt, the interest charges on the senior facilities to fund the acquisition and the amortization of the arrangement fees paid on the senior facilities. The accretion expense is related to the amortization of the arrangement fees on the senior facility and the amortization of the purchase price allocation on the Anheuser-Busch debt at the acquisition date.

The losses on hedging instruments not part of a hedge accounting relationship are related to the fair value adjustments through profit and loss on the freestanding swaps linked with the US Private Placement and to the recognition of the interest differential in the profit and loss on foreign exchange forwards.

The losses from hedge ineffectiveness are related to commodity hedges in AmBev Brazil and Anheuser-Busch.

 

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FINANCE INCOME

 

For the six month period ended 30 June

Million US dollar

   2009    2008

Interest income

   53    58

Gains on hedging instruments that are not part of a hedge accounting relationship

   108    47

Gains on non-derivative financial instruments at fair value through profit or loss

   -    1

Net foreign exchange gains

   73    -

Other financial income

   12    12
   246    118

The increase of the net foreign exchange gains is mainly explained by the realized and unrealized foreign exchange gains on the US dollar assets in the parent companies, following the bond issues in euro, CHF and GBP which were immediately converted to US dollar. These US dollar assets are held temporarily on third party bank accounts and used for repayments on the senior facilities.

 

9. INCOME TAXES

Income taxes recognized in the income statement can be detailed as follows:

 

For the six month period ended 30 June

Million US dollar

   2009    2008

Current tax expense

   (1 004)    (353)

Deferred tax (expense)/income

   184    121

Total income tax expense in the income statement

   (820)    (232)

The reconciliation of the aggregated weighted nominal tax rate with the effective tax rate can be summarized as follows:

 

For the six month period ended 30 June

Million US dollar

   2009    2008

Profit before tax

   3 163    1 998

Deduct share of result of associates

   (228)    (3)

Profit before tax and before share of result of associates

   2 935    1 995

Adjustments on taxable basis

     

Non-deductible impairment of goodwill and intangible assets

   1    3

Expenses not deductible for tax purposes

   332    163

Taxable intercompany dividends

   9    -

Non-taxable financial and other income

   (186)    (64)
   3 091    2 097

Aggregated weighted nominal tax rate

   35.4%    32.1%

Tax at aggregated weighted nominal tax rate

   (1 094)    (673)

Adjustments on tax expense

     

Utilization of tax losses not previously recognized

   7    135

Write-down of deferred tax assets on tax losses and current year losses for which no deferred tax asset is recognized

   (124)    (26)

Over/(under) provided in prior years

   31    1

Tax savings from tax credits

   333    328

Tax savings from special tax status

   80    73

Change in tax rate

   (1)   

Withholding taxes

   (39)    (46)

Other tax adjustments

   (13)    (24)
   (820)    (232)

Effective tax rate

   27.9%    11.6%

The aggregated weighted nominal tax rate increased from 32.1% in the first half of 2008 to 35.4% in the first half of 2009 mainly due to the results of Anheuser-Busch which are taxed at a marginal tax rate of approximately 40%. Furthermore, the non deductible expenses increased from 163m US dollar in 2008 to 332m US dollar in 2009. The increase in expenses not deductible for tax purposes is mainly related to non deductible interest expenses and foreign exchange losses on intra-group borrowings.

The total income tax expense amounts to 820m US dollar in the first half of 2009 or 27.9% of the profit before taxes and share of result of associates, compared to 232m US dollar in 2008, or 11.6%. This increase is primarily linked to the results of

 

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Anheuser-Busch which are taxed at a marginal rate of 40% and higher realized profits in AmBev Brazil which are taxed at a marginal tax rate of 34%. Furthermore, the company continues to benefit at the AmBev level from the impact of interest on equity payments and tax deductible goodwill from the merger between InBev Holding Brazil and AmBev in July 2005 and the acquisition of Quinsa in August 2006.

Income taxes were directly recognized in equity as follows:

 

For the six month period ended 30 June    2009    2008
Million US dollar    Before tax   

Tax

(charge)
credit

   After tax    Before tax   

Tax

(charge)
credit

   After tax
Exchange differences on translation of foreign operations (gains/(losses))    1 465    -    1 465    891    -    891

Cash flow hedges

   701    (143)    558    (2)    1    (1)

Actuarial gains/(losses)

   (3)    1    (2)    -    -    -

Other comprehensive income

   2 163    (142)    2 021    889    1    890

 

10. PROPERTY, PLANT AND EQUIPMENT

 

As at    30 June 2009    31 December
2008
Million US dollar    Land and
buildings
   Plant and
equipment
   Fixtures
and fittings
   Under
construction
   Total    Total

Acquisition cost

                 

Balance at end of previous year

   9 025    17 122    3 547    1 201    30 895    21 830

Effect of movements in foreign exchange

   226    696    160    26    1 108    (3 521)

Acquisitions

   18    156    62    361    597    2 380
Acquisitions through business combinations    10    4    1    -    15    11 143

Disposals

   (19)    (179)    (152)    (1)    (351)    (656)

Disposals through the sale of subsidiaries

   -    -    (1)    -    (1)    (3)

Transfer to other asset categories

   (52)    102    (312)    (715)    (977)    (301)

Other movements

   -    3    1    10    14    23

Balance at end of period

   9 208    17 904    3 306    882    31 300    30 895

Depreciation and impairment losses

                 

Balance at end of previous year

   (1 852)    (7 254)    (2 115)    -    (11 221)    (12 071)

Effect of movements in foreign exchange

   (104)    (447)    (110)    -    (661)    1 896

Disposals

   10    147    136    -    293    529
Disposals through the sale of subsidiaries    -    -    1    -    1    -

Depreciation

   (212)    (823)    (174)    -    (1 209)    (1 677)

Impairment losses

   -    (29)    (2)    -    (31)    (76)

Transfer to other asset categories

   116    404    (56)    -    464    203

Other movements

   -    -    1    -    1    (25)

Balance at end of period

   (2 042)    (8 002)    (2 319)    -    (12 363)    (11 221)

Carrying amount at

31 December 2008

   7 173    9 868    1 432    1 201    19 674    19 674

at 30 June 2009

   7 166    9 902    987    882    18 937    -

The transfer to other asset categories mainly relates to the separate presentation in the statement of financial position of property, plant and equipment held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

 

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11. GOODWILL

 

As at

Million US dollar

   30 June 2009    31 December 2008

Acquisition cost

     

Balance at end of previous year

   49 563    20 365

Effect of movements in foreign exchange

   1 598    (3 823)

Acquisitions through business combinations

   17    32 320

Transfer to assets held for sale

   (780)    -

Purchases of minority interests

   -    708

Other movements

   -    (7)

Balance at end of period

   50 398    49 563

Impairment losses

     

Balance at end of previous year

   (7)    -

Impairment losses

   -    (7)

Balance at end of period

   (7)    (7)

Carrying amount

at 31 December 2008

   49 556    49 556

at 30 June 2009

   50 391    -

The business combinations that took place during the first 6 months of 2009 are the acquisition of several local businesses throughout the world – see note 6 Acquisitions and disposals of subsidiaries . These transactions resulted in recognition of goodwill of 17m US dollar.

With designation of certain businesses as assets held for sale, 780m US dollar in goodwill was transferred to the Assets held for sale caption of the statement of financial position.

The business combinations that took place during 2008 reflect primarily the Anheuser-Busch acquisition resulting in the recognition of goodwill of 32 235m US dollar. The other business combinations that took place during 2008 are the acquisitions of several local distributors throughout the world resulting in recognition of goodwill of 85m US dollar.

As a result of a share buy-back program of AmBev shares during 2008, AB InBev increased its interest percentage in AmBev from 61.01% to 61.75%. Other purchases of minority interests relate to the buy out of AB InBev Shiliang (Zhejiang) Brewery and to the closing of AmBev’s tender offer for Quinsa shares resulting in an increase of AmBev’s economic interest in Quinsa to 99.83%. The increase of goodwill by 708m US dollar stems from these transactions for which the total cash consideration amounted to 853m US dollar. As the related subsidiaries were already fully consolidated, the purchases did not impact AB InBev’s profit, but reduced the minority interests and thus impacted the profit attributable to equity holders of AB InBev. AmBev did not perform any share buy-backs during the first half of 2009.

AB InBev’s annual goodwill impairment testing is performed during the fourth quarter of the year.

 

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12. INTANGIBLE ASSETS

 

As at    30 June 2009    31 December
2008
Million US dollar    Brands    Supply and
distribution
rights
   Software    Other    Total    Total

Acquisition cost

                 

Balance at end of previous year

   22 267    1 226    720    153    24 366    2 485

Effect of movements in foreign exchange

   (31)    13    32    (1)    13    (184)

Acquisitions through business combinations

   12    -    -    -    12    21 875

Acquisitions and expenditures

   -    40    36    1    77    238

Disposals

   -    (5)    (1)    -    (6)    (68)

Transfer to other asset categories

   -    2    24    29    55    26

Other movements

   -    1    -    -    1    (6)

Balance at end of period

   22 248    1 277    811    182    24 518    24 366

Amortization and impairment losses

                 

Balance at end of previous year

   -    (360)    (301)    (32)    (693)    (645)

Effect of movements in foreign exchange

   -    (4)    (23)    -    (27)    66

Amortization

   -    (39)    (76)    (6)    (121)    (159)

Disposals

   -    4    -    -    4    22

Transfer to other asset categories

   -    13    (2)    2    13    14

Other movements

   -    -    -    -    -    9

Balance at end of period

   -    (386)    (402)    (36)    (824)    (693)

Carrying value

at 31 December 2008

   22 267    866    419    121    23 673    23 673

at 30 June 2009

   22 248    891    409    146    23 694    -

AB InBev is the owner of some of the world’s most valuable brands in the beer industry. As a result, certain brands and distribution rights are expected to generate positive cash flows for as long as the company owns the brands and distribution rights. Given AB InBev’s more than 600-year history, certain brands and their distribution rights have been assigned indefinite lives.

In April 2009, the company acquired the Budweiser distribution rights in Paraguay for an amount of 24m US dollar. These rights have been assigned an indefinite useful life.

Intangible assets with indefinite useful lives are comprised primarily of brands and certain distribution rights that AB InBev buys back for its own products, and are tested for impairment during the fourth quarter of the year. As of 30 June 2009, the carrying amount of the intangible assets amounted to 23 694m US dollar (31 December 2008: 23 673m US dollar) of which 22 806m US dollar was assigned an indefinite useful life (31 December 2008: 22 791m US dollar) and 888m US dollar a finite life (31 December 2008: 882m US dollar).

 

13. CASH AND CASH EQUIVALENTS

 

As at

Million US dollar

   30 June 2009    31 December 2008

Short term bank deposits

   4 453    1 010

Current bank accounts

   1 868    1 912

Cash

   18    14

Cash and cash equivalents

   6 339    2 936

Bank overdrafts

   (150)    (765)
   6 189    2 171

The cash outstanding per 30 June 2009 includes restricted cash for an amount of 96m US dollar. This restricted cash mainly reflects the outstanding consideration payable to former Anheuser-Busch shareholders who had not yet claimed the proceeds. The related payable is recognized as a deferred consideration on acquisitions.

 

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14. ASSETS AND LIABILITIES HELD FOR SALE

 

As at

Million US dollar

   30 June 2009    31 December 2008

Assets held for sale

   1 811    51

Liabilities held for sale

   246    -
   1 565    51

The increase of assets and liabilities held for sale as at 30 June 2009 mainly results from the reclassification of the identifiable assets and liabilities of our Korean affiliate and four metal beverage can and lid manufacturing plants from AB InBev’s US metal packaging subsidiary, in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations . The disposal of these assets is expected to occur in 2009. No gain and loss with respect to these assets is recognized in the first six months of 2009. The total amount of other comprehensive income accumulated in equity relating to these assets held for sale amounts to (97)m US dollar as at 30 June 2009.

Assets held for sale at 31 December 2008 include 51m US dollar land and buildings, mainly in Brazil and in the US.

 

15. CHANGES IN EQUITY AND EARNINGS PER SHARE

STATEMENT OF CAPITAL

The tables below summarize the changes in issued capital and treasury shares during the first six months of 2009:

 

ISSUED CAPITAL    Million US dollar    Million shares

At the end of the previous year

   1 730    1 602

Changes during the period

   1    1
    
   1 731    1 603

 

TREASURY SHARES    Million US dollar    Million shares

At the end of the previous year

   997    20.6

Changes during the period

   (32)    (0.7)
    
   965    19.9

DIVIDENDS

A dividend of 0.28 euro per share that relates to the period ended 31 December 2008 and that amounts to 659m US dollar was declared in April 2009 (2008: 2 012m US dollar).

EARNINGS PER SHARE

The calculation of basic earnings per share is based on the profit attributable to equity holders of AB InBev of 1 787m US dollar (1 207m US dollar for the first six months of 2008) and a weighted average number of ordinary shares outstanding for the first six months, calculated as follows:

 

Million shares    30 June 2009   

30 June 2008

restated 1

Issued ordinary shares at 1 January, net of treasury shares

   1 582    969

Effect of shares issued / share buy-back programs

   -    (9)

Weighted average number of ordinary shares at 30 June

   1 582    960

The calculation of diluted earnings per share is based on the profit attributable to equity holders of AB InBev of 1 787m US dollar (1 207m US dollar for the first six months of 2008) and a weighted average number of ordinary shares (diluted) outstanding for the first six months, calculated as follows:

 

Million shares    30 June 2009   

30 June 2008

restated 1

Weighted average number of ordinary shares at 30 June

   1 582    960

Effect of share options and warrants

   8    3

Weighted average number of ordinary shares (diluted) at 30 June

   1 590    963

 

 

1 In accordance with IAS33, historical data per share have been adjusted by an adjustment ratio of 0.6252 following the capital increase in December 2008.

 

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The calculation of earnings per share before exceptional items is based on the profit before exceptional items, attributable to equity holders of AB InBev, calculated as follows:

 

Million US dollar    30 June 2009    30 June 2008

Profit attributable to equity holders of AB InBev

   1 787    1 207

Exceptional items, after taxes, attributable to equity holders of AB InBev

   131    40

Profit before exceptional items, attributable to equity holders of AB InBev

   1 918    1 247

The table below sets out our EPS calculation:

 

As at

Million US dollar

   30 June 2009   

30 June 2008

restated 1

Profit attributable to equity holders of AB InBev

   1 787    1 207

Weighted average number of ordinary shares

   1 582    960

Basic EPS

   1.13    1.26

Profit before exceptional items, attributable to equity holders of AB InBev

   1 918    1 247

Weighted average number of ordinary shares

   1 582    960

EPS before exceptional items

   1.21    1.30

Profit attributable to equity holders of AB InBev

   1 787    1 207

Weighted average number of ordinary shares (diluted)

   1 590    963

Diluted EPS

   1.12    1.25

Profit before exceptional items, attributable to equity holders of AB InBev

   1 918    1 247

Weighted average number of ordinary shares (diluted)

   1 590    963

Diluted EPS before exceptional items

   1.21    1.29

The average market value of the company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period that the options were outstanding. 12m share options were anti-dilutive and not included in the calculation of the dilutive effect.

 

16. INTEREST-BEARING LOANS AND BORROWINGS

 

NON-CURRENT LIABILITIES

Million US dollar

   30 June 2009    31 December 2008

Secured bank loans

   100    57

Unsecured bank loans

   33 734    39 830

Unsecured bond issues

   21 573    7 912

Secured other loans

   6    7

Unsecured other loans

   204    170

Finance lease liabilities

   46    49
   55 663    48 025
     

CURRENT LIABILITIES

Million US dollar

   30 June 2009    31 December 2008

Secured bank loans

   218    50

Unsecured bank loans

   2 599    10 723

Unsecured bond issues

   1 054    520

Unsecured other loans

   4    4

Finance lease liabilities

   5    4
   3 880    11 301

The current and non-current interest-bearing loans and borrowings amount to 59 543m US dollar at June 2009, compared to 59 326m US dollar at year end 2008.

AB InBev’s net debt decreased to 53 136m US dollar as of June 2009, from 56 661m US dollar as of December 2008. Net debt is defined as non-current and current interest-bearing loans and borrowings and bank overdrafts minus debt securities and cash. Net debt is a financial performance indicator that is used by our management to highlight changes in the company’s overall liquidity position. The company believes that net debt is meaningful for investors as it is one of the primary measures management uses when evaluating progress towards deleveraging.

 

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The following table provides a reconciliation of our net debt as of the dates indicated:

 

As at

Million US dollar

   30 June 2009     31 December 2008

Non-current interest bearing loans and borrowings

   55 663      48 025

Current interest bearing loans and borrowings

   3 880      11 301
   59 543      59 326

Bank overdrafts

   150      765

Cash and cash equivalents

   (6 339   (2 936)

Interest bearing loans granted (included within Trade and other receivables)

   (91   (97)

Debt securities (included within Investment securities)

   (127   (397)

Net debt

   53 136      56 661

Apart from operating results net of capital expenditures, the net debt is impacted by dividend payments to shareholders of AB InBev (559m US dollar); dividend payments to minority shareholders of AmBev (94m US dollar); the payment to former shareholders of Anheuser-Busch and transaction costs (508m US dollar); the net proceeds from the sale of Tsingtao (901m US dollar) and the impact of changes in foreign exchange rates (640m US dollar).

To finance the acquisition of Anheuser-Busch, we entered into a 45 billion US dollar senior debt facilities agreement and a 9.8 billion US dollar bridge facility agreement, enabling us to consummate the acquisition, including the payment of 52.5 billion US dollar to shareholders of Anheuser-Busch, refinancing certain Anheuser-Busch indebtedness, payment of all transaction charges, fees and expenses and accrued but unpaid interest to be paid on Anheuser-Busch’s outstanding indebtedness, which together amounted to approximately 54.8 billion US dollar.

On 18 December 2008, we repaid the debt we had incurred under the bridge facility with the net proceeds of the rights offering and cash proceeds we received from pre-hedging the foreign exchange rate between the euro and the US dollar in connection with the rights offering.

As of 30 June 2009, the amounts outstanding under our 45 billion US dollar senior debt facilities (of which 44 billion US dollar was ultimately drawn) entered into in connection with the Anheuser-Busch acquisition had been reduced to 31.4 billion US dollar. AB InBev refinanced the debt incurred under the senior facility with cash generated from its operations, with the proceeds of disposals and with the proceeds of the following debt capital market offerings:

 

   

On 12 January 2009, we issued three series of notes in an aggregate principal amount of 5.0 billion US dollar, consisting of 1.25 billion US dollar aggregate principal amount of notes due 2014, 2.5 billion US dollar aggregate principal amount of notes due 2019 and 1.25 billion US dollar aggregate principal amount of notes due 2039 bearing interest at a rate of 7.20%, 7.75% and 8.20%, respectively. The net proceeds from the January Notes offering were used to repay 5.0 billion US dollar of the senior facility.

 

   

In the first half of 2009, we completed the issuance of eight series of notes, consisting of 750m euro aggregate principal amount of notes due 2013, 750m euro aggregate principal amount of notes due 2014, 600m euro aggregate principal amount of notes due 2017, 550m Pound sterling aggregate principal amount of notes due 2024, 600m Swiss franc aggregate principal amount notes due 2014, 250m euro aggregate principal amount of notes due June 2015 and 750m Pound sterling aggregate principal amount of notes due June 2017 bearing interest at a rate of 7.375%, 6.57%, 8.625%, 9.75%, 4.5%, 5.75% and 6.5%, respectively and a note consisting of 50m euro aggregate principal amount of notes due 2014 and bearing interest at a floating rate of 3 month EURIBOR plus 3.90%. The net proceeds from the notes were used to repay approximately 2.5 billion US dollar of the senior facility and approximately 1.1 billion US dollar of other short term indebtedness.

 

   

On 14 May 2009, we issued three series of notes in an aggregate principal amount of 3.0 billion US dollar , consisting of 1.55 billion US dollar aggregate principal amount of notes due 2014, 1.0 billion US dollar aggregate principal amount of notes due 2019 and 0.450 billion US dollar aggregate principal amount of notes due 2039 bearing interest at a rate of 5.375%, 6.875% and 8.0%, respectively. The net proceeds from the May Notes offering were used to repay approximately 3 billion of the senior facility.

 

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As of 30 June 2009, our outstanding debt had the following maturity dates:

 

TERMS AND DEBT REPAYMENT

SCHEDULE 30 JUNE 2009

Million US dollar

   Total    1 year or
less
   1-2 years    2-3 years    3-5 years    More than 5
years

Secured bank loans

   318    218    61    20    12    7

Unsecured bank loans

   36 333    2 599    5 814    13 573    14 172    175

Unsecured bond issues

   22 627    1 054    474    989    5 709    14 401

Secured other loans

   6    -    -    -    6    -

Unsecured other loans

   208    4    26    91    22    65

Finance lease liabilities

   51    5    5    4    2    35
    
   59 543    3 880    6 380    14 677    19 923    14 683

 

17. SHARE-BASED PAYMENTS

Different share option programs allow company senior management and members of the board of directors to acquire shares of AB InBev or AmBev. The fair value of these share-based payment compensations is estimated at grant date, using the binomial Hull model, modified to reflect the IFRS 2 Share-based Payments requirement that assumptions about forfeiture before the end of the vesting period cannot impact the fair value of the option.

The fair value of options granted is expensed over the vesting period. The options granted under the bonus plan and issued during the second quarter of 2009 cliff vest after 5 years. AB InBev issued a total of 0.4m of such options representing a fair value of approximately 5.9m US dollar. In addition 1.1m options were granted to members of the board of directors. These options gradually vest over a period of 3 years (one third on 1 January of 2011, one third on 1 January 2012 and one third on 1 January 2013) and represent a fair value of approximately 16.3m US dollar.

The company offered additional stock options to a small group of senior executives on 25 November 2008. AB InBev believes that the selected executives will help implement a successful integration of Anheuser-Busch Companies, Inc. and AB InBev, which will underpin AB InBev’s ability to quickly deleverage. The final number of options offered was 28.4m, with an estimated fair value of 233m US dollar.

The company also offered 5.9m options with a fair value of 53m US dollar following the approval of the AB InBev shareholders meeting and 5.0m options with a fair value of 47m US dollar to approximately 50 executives.

The weighted average fair value of the options and assumptions used in applying the AB InBev option pricing model for the 2009 grants are as follows:

 

     Six months
ended
  

Year ended 31 December

Amounts in US dollar unless otherwise indicated 1    30 June 2009    2008    2007

Fair value of options and warrants granted

   13.33    38.17    31.15

Share price

   25.36    90.58    77.59

Exercise price

   18.25    86.62    72.53

Expected volatility

   34%    24%    20%

Expected dividends

   0.76%    0.16%    0.16%

Risk-free interest rate

   3.49%    4.47%    4.47%

Since the acceptance period of the options is 2 months, the fair value was determined as the average of the fair values calculated on a weekly basis during the two months offer period.

Expected volatility is based on historical volatility calculated using 1 410 days of historical data. The binomial Hull model assumes that all employees would immediately exercise their options if the AB InBev share price is 2.5 times above the exercise price. As a result, no single expected option life applies.

The total number of outstanding options developed as follows:

 

     Six months
ended
   Year ended 31 December
Million options and warrants    30 June 2009    2008    2007

Options and warrants outstanding at 1 January

   8.8    6.3    7.6

Options and warrants issued during the period

   35.9    1.1    1.0

Options and warrants exercised during the period

   (0.8)    (1.2)    (1.6)

Options and warrants forfeited during the period

   (0.3)    (0.4)    (0.7)
Additional options and warrants granted as a result of the December 2008 rights issue    -    3.0    -

Options outstanding at end of period

   43.6    8.8    6.3

 

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As a consequence of the rights issue that took place in November 2008, the exercise price and the number of options were adjusted according to the ratio method proposed by Euronext-Liffe in order to compensate for the dilutive effect of the rights issue. The adjustment ratio is 0.6252. The adjusted exercise price of the subscription rights equals the original exercise price multiplied by the adjustment ratio. The adjusted number of subscription rights equals the original number of subscription rights divided by the adjustment ratio. As a result during the fourth quarter of 2008, 3.0m additional options were granted to employees in order to compensate for the dilutive effect of the rights issue.

The range of exercise prices of the outstanding options is between 10.29 US dollar and 82.42 US dollar while the weighted average remaining contractual life is 9.6 years.

Of the 43.6m outstanding options 3.9m options are vested at 30 June 2009.

The weighted average exercise price of the options is as follows:

 

     Six months
ended
   Year ended 31 December
Amounts in US dollar 1    30 June 2009    2008    2007

Options and warrants outstanding at 1 January

   34.42    46.50    35.48

Granted during the period (pre rights issue)

   18.16    76.92    79.38

Granted during the period (adjustment factor)

   -    32.87    -

Forfeited during the period

   37.30    56.63    45.00

Exercised during the period

   20.72    32.76    35.52

Outstanding at the end of the period

   21.46    34.42    46.50

Exercisable at the end of the period

   23.90    23.66    36.39

For share options exercised during 2009 the weighted average share price at the date of exercise was 30.72 US dollar.

Under an equivalent 5 year cliff vesting plan, AmBev has issued during the second quarter of 2009 0.5m options for which the fair value amounts to approximately 27m US dollar. The fair value of the options and assumptions used in applying a binomial option pricing model for the 2009 AmBev grant are as follows:

 

     Six months
ended
   Year ended 31 December
Amounts in US dollar unless otherwise indicated 1    30 June 2009    2008    2007

Fair value of options granted

   33.94    44.51    25.03

Share price

   50.18    71.48    61.83

Exercise price

   49.95    71.48    61.83

Expected volatility

   48%    33%    26%

Risk-free interest rate

   11.8%    12.50%    10.60%

As the AmBev options are dividend protected, the dividend yield used for the fair value calculation was 0%.

 

1

Amounts have been converted to US dollar at the closing rate of the respective period.

During the second half of 2007, AmBev performed a reverse stock split in the ratio of 100:1. Consequently the 2007 figures have been restated to consider the impact of this adjustment.

The total number of outstanding AmBev options developed as follows:

 

     Six months
ended
   Year ended 31 December
Million options    30 June 2009    2008    2007

Options outstanding at 1 January

   2.8    2.2    2.4

Options issued during the period

   0.5    0.8    0.8

Options exercised during the period

   -    (0.1)    (0.6)

Options forfeited during the period

   (0.2)    (0.1)    (0.4)

Options outstanding at end of period

   3.1    2.8    2.2

The range of exercise prices of the outstanding options is between 27.43 US dollar and 66.70 US dollar while the weighted average remaining contractual life is 3.1 years.

Of the 3.1m outstanding options 0.5m options are vested at 30 June 2009.

 

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The weighted average exercise price of the options is as follows:

 

     Six months
ended
   Year ended 31 December
Amounts in US dollar    June 2009    2008    2007

Options outstanding at 1 January

   50.02    49.21    30.54

Granted during the period

   50.18    57.42    61.45

Forfeited during the period

   50.20    33.69    32.22

Exercised during the period

   29.58    40.62    35.95

Outstanding at the end of the period

   50.34    42.07    49.21

Exercisable at the end of the period

   29.62    23.62    28.60

During the fourth quarter of 2008, a limited number of AmBev shareholders who are part of the senior management of AB InBev were given the opportunity to exchange AmBev shares against a total of 0.9m AB InBev shares (2007: 1.8m – 2006: 1.5m) at a discount of 16.7% provided that they stay in service for another five years. The fair value of this transaction amounts to approximately 11m US dollar (2007: 25m US dollar – 2006: 13m US dollar) and is expensed over the five years service period. The fair values of the AmBev and AB InBev shares were determined based on the market price. 19m US dollar of cost was reported in the first half of 2009 related to the acceleration of the vesting of the AmBev share swap for selected employees.

Since 2005, variable compensation granted to company employees and management is partially settled in shares.

The above described share-based payment transactions resulted in a total expense of 97m US dollar for the first six months 2009, 62m US dollar for the year 2008 and 72m US dollar for the year 2007.

 

18. RISKS ARISING FROM FINANCIAL INSTRUMENTS

Changes in market conditions that give rise to market risk include changes in interest rates, commodity prices and foreign exchange rates. At 30 June 2009, no material changes are warranted to our disclosures made in note 30 Risks arising from financial instruments of our 31 December 2008 annual financial statements, except for the foreign exchange swaps which AB InBev entered into with the objective to hedge the conversion of the bonds proceeds, as detailed in note 16 Interest-bearing loans and borrowings, to US dollar.

LIQUIDITY RISK

The following are the contractual maturities of non-derivative financial liabilities including interest payments and derivative financial assets and liabilities:

 

     30 June 2009
Million US dollar    Carrying
amount
   Contrac-
tual cash
flows
   Less than
1 year
   1-2 years    2-3 years    3-5 years    More than
5 years

Non-derivative financial liabilities

                    

Secured bank loans

   318    (357)    (236)    (68)    (25)    (19)    (9)

Unsecured bank loans

   36 333    (40 805)    (3 768)    (7 023)    (14 431)    (15 376)    (207)

Unsecured bond issues

   22 627    (42 229)    (2 704)    (2 099)    (2 470)    (8 385)    (26 571)

Secured other loans

   6    (9)    (1)    (1)    (1)    (6)    -

Unsecured other loans

   208    (220)    (7)    (33)    (94)    (24)    (62)

Finance lease liabilities

   51    (128)    (6)    (12)    (7)    (6)    (97)

Bank overdraft

   150    (150)    (150)    -    -    -    -

Trade & other payables

   9 126    (9 147)    (8 649)    (376)    (24)    (7)    (91)
   68 819    (93 045)    (15 521)    (9 612)    (17 052)    (23 823)    (27 037)

Derivative financial liabilities

                    

Interest rate derivatives

   2 127    (2 242)    (857)    (829)    (652)    102    (6)

Foreign exchange derivatives

   (230)    217    (14)    164    67    -    -
Interest rate and foreign exchange derivatives    266    (576)    (14)    (60)    (181)    (218)    (103)

Commodity derivatives

   71    (73)    (99)    26    -    -    -

Other derivatives

   (1)    -    -    -    -    -    -
   2 233    (2 674)    (984)    (699)    (766)    (116)    (109)
Of which: directly related to cash flow hedges    1 456    (1 475)    (703)    (461)    (412)    101    -

 

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19. CONTINGENCIES

Certain subsidiaries of AmBev have received tax assessments totaling 4 804m Brazilian real including accrued interest and penalties, related to corporate Brazilian taxation of income generated outside Brazil. In 2005 and 2008, AmBev was officially notified of administrative Lower Court decisions, recognizing that a substantial portion of the amount of the tax assessment mentioned above was incorrect. These decisions, of which some were appealed, reduced the amount of such tax assessments to 2 098m Brazilian real (including interest and penalties). AmBev disputes the validity of these tax assessments and intends to vigorously defend its case. No provision has been recorded related to these tax assessments.

Certain holders of warrants issued by AmBev in 1996 for exercise in 2003 proposed lawsuits to subscribe correspondent shares for an amount lower than AmBev considers as established upon the warrant issuance. In case AmBev loses the totality of these lawsuits, the issuance of 5 536 919 preferred shares and 1 376 344 common shares would be necessary. AmBev would receive in counterpart funds that are materially lower than the current market value. This could result in a dilution of about 1% to all AmBev shareholders. Furthermore, the holders of these warrants claim to receive the dividends relative to these shares since 2003 (approximately 130m real excluding legal fees). AmBev disputes these claims and intends to vigorously defend its case.

AmBev, together with other Brazilian brewers, is party to a lawsuit whereby the Federal Public Prosecutor’s office: (i) claims collective damages of approximately 2.8b Brazilian real (out of which 2.1b Brazilian real allocated to AmBev); and (ii) requests that the defendants are ordered to allocate to treatment of the harms caused by alcohol the same amounts invested in advertisement in the future. Plaintiff argues that advertising campaigns of defendants increase total consumption of alcohol and, as a result, public health and social security costs, traffic accidents, criminality and underage consumption. AmBev believes that the claim is without merit, will vigorously defend this litigation and has classified the chances of loss as being remote, in accordance with IFRS.

Shortly after the above lawsuit was filed, a consumer-protection association applied to be admitted as a joint-plaintiff. The association has made further requests in addition to the ones made by Public Prosecutor. They include: (i) claim for “collective moral damages” in an amount to be ascertained by the court; however, it suggests that it should be equal to the initial request of 2.8b Brazilian real (therefore, it doubles the initial amount involved); (ii) destination of the amounts to specific public accounts; (iii) obligation to defendants to give full publicity of the future court decision; (iv) as a subsidiary claim, direct indemnification to public entities in charge of public health system and social security; (v) interest and monetary adjustment on amounts due; (vi) defendants to pay court and attorney fees; (vii) burden of proof to lie on defendants; and (viii) exemption of court fees to the association. The court has admitted the association as joint—plaintiff and has agreed to hear the new claims. Process has not been served so far. AmBev intends to vigorously defend this litigation.

On 16 October 2008, Grupo Modelo, Diblo S.A. de C.V. and the Grupo Modelo series A shareholders filed a notice of arbitration, under the arbitration rules of the United Nations Commission on International Trade Law, against Anheuser-Busch, Anheuser-Busch International Inc. and Anheuser-Busch International Holdings Inc (‘ABIH’). The notice of arbitration claimed the transaction between Anheuser-Busch and InBev violated provisions of the 1993 investment agreement, governed by the law of the United Mexican States, between the Anheuser-Busch entities, Grupo Modelo, Diblo and the series A shareholders. The arbitration will take place in New York City in the State of New York in the United States. It seeks post-closing relief, including (i) a declaration that Anheuser-Busch breached the 1993 investment agreement, (ii) rescission of certain continuing rights and obligations under the 1993 investment agreement, (iii) a permanent injunction against Anheuser-Busch or its successors from exercising governance rights under the 1993 investment agreement, (iv) suspension of Anheuser-Busch’s right to exercise a right of first refusal to purchase the stock of Grupo Modelo held by the series A shareholders, (v) “rectification” of the 1993 investment agreement to add additional restrictions on the Anheuser-Busch entities and (vi) money damages of up to 2.5b US dollar. The respondents believe that the claims are without merit because, among other things, there is no change of control clause in the investment agreement and no sale or transfer of the shares of Grupo Modelo and Diblo held by ABIH occurred. However, the relief sought by Grupo Modelo, Diblo and its series A shareholders in the arbitral proceeding or any other equitable or other relief they may seek may have an adverse effect on Anheuser-Busch or AB InBev. The final arbitration proceeding is scheduled for August 2009.

On 10 September 2008, an action brought under Section 7 of the Clayton Antitrust Act styled Ginsburg et al. v. InBev NV/SA et al., C.A. No. 08-1375, was filed against InBev NV/SA, Anheuser-Busch Companies, Inc. and Anheuser-Busch, Inc. in the United States District Court for the Eastern District of Missouri. The plaintiffs in the Ginsburg action allege that the merger between Anheuser-Busch and InBev will have certain anticompetitive effects and consequences on the beer industry and will create a monopoly in the production and sale of beer in the United States. The plaintiffs sought declaratory relief that the merger violates Section 7 of the Clayton Antitrust Act, injunctive relief to prevent consummation of the merger and fees and

 

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expenses. On 18 November 2008 plaintiffs’ request for injunctive relief was denied. On 3 August 2009 the Court granted defendants Motion to Dismiss plaintiffs claims with prejudice. On 4 August 2009 the Court entered judgment in favor of the defendants. Plaintiffs have 30 days from the entry of judgment to file an appeal. AB InBev will continue to vigorously defend against these claims.

On 22 July 2009, CADE, the Brazilian antitrust authority issued its ruling in Administrative Proceeding No. 08012.003805/2004-1. This proceeding was initiated in 2004 as a result of a complaint filed by Schincariol (a South American brewery and beverage maker based in Brazil) and has, as its main purpose, the investigation of our conduct in the market, in particular our customer loyalty program known as “Tô Contigo” and which is similar to airline frequent flyer and other mileage programs. During its investigation, the Secretariat of Economic Law of the Ministry of Justice (“SDE”) concluded that the program should be considered anticompetitive unless certain adjustments were made. These adjustments have already been substantially incorporated into the current version of the Program. The SDE opinion did not threaten any fines and recommended that the other accusations be dismissed. After the SDE opinion, the proceeding was sent to CADE, which issued a ruling that, among other things, imposed a fine in the amount of 352m Brazilian real. Based on the judgment transcription, we believe that the decision is not proper - including with regard to the amount of the penalty – and we intend to appeal in the administrative and judicial courts. According to our advisors’ analysis, a loss is possible (but not probable), and therefore we have not established a provision in our interim financial statements. We are also involved in other administrative proceedings before CADE and SDE, relating to the investigation of certain conduct, none of which we believe contravenes applicable competition rules and regulations.

 

20. RELATED PARTIES

TRANSACTIONS WITH DIRECTORS AND EXECUTIVE BOARD MANAGEMENT MEMBERS (KEY MANAGEMENT PERSONNEL)

In addition to short-term employee benefits (primarily salaries), AB InBev’s executive board management members are entitled to post-employment benefits. More particular, members of the executive board management participate in the pension plan of their respective country. Finally, key management personnel is eligible for the company’s share option and/or share swap program. Total directors and executive board management compensation included in the income statement can be detailed as follows:

 

     2009    2008

For the six month period ended 30 June

Million US dollar

   Directors    Executive board
management
   Directors    Executive board
management

Short-term employee benefits

   2    42    2    23

Post-employment benefits

   -    1    -    2

Termination benefits

   -    -    -    -

Share-based payments

   1    30    1    13
   3    73    3    38

Directors’ compensation consists mainly of directors’ fees (tantièmes). Key management personnel was not engaged in any transaction with AB InBev and did not have any significant outstanding balances with the company, with the exception of a consultancy agreement entered into between AB InBev and Mr. Busch IV in connection with the merger and which will continue until 31 December 2013. Under the terms of the consultancy agreement Mr. Busch IV received a lump sum cash payment of 10.3m US dollar. During the consultancy period Mr. Busch IV will be paid a fee of approximately 120 000 US dollar per month and Mr. Busch IV will be provided with an appropriate office in St Louis, Missouri, administrative support and certain employee benefits that are materially similar to those provided to full-time salaried employees of Anheuser-Busch.

JOINTLY CONTROLLED ENTITIES

AB InBev reports its interest in jointly controlled entities using the line-by-line reporting format for proportionate consolidation. Significant interests in joint ventures include two distribution entities in Canada and three entities in Brazil. None of these joint ventures are material to the company. Aggregate amounts of AB InBev’s interest are as follows (for the six month period ended 30 June, except for balance sheet comparatives at 31 December):

 

Million US dollar    2009    2008

Non-current assets

   72    68

Current assets

   32    31

Non-current liabilities

   91    85

Current liabilities

   26    28

Result from operations

   5    6

Profit attributable to equity holders

   1    2

 

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TRANSACTIONS WITH ASSOCIATES

AB InBev’s transactions with associates were as follows (for the six month period ended 30 June, except for balance sheet comparatives at 31 December):

 

Million US dollar    2009    2008

Revenue

   28    8

Non-current assets

   16    31

Current assets

   13    14

Current liabilities

   17    14

Revenue from associates primarily consists of sales to Grupo Modelo as well as other distributors in which AB InBev has a non-controlling interest.

 

21. EVENTS AFTER THE BALANCE SHEET DATE

On 1 July 2009 AB InBev announced that it had entered into a definitive agreement with Ball Corporation, one of the world’s leading suppliers of metal and plastic packaging to the beverage and food industries, whereby Ball will acquire four metal beverage can and lid manufacturing plants from AB InBev’s US metal packaging subsidiary, Metal Container Corporation (MCC), for an aggregate purchase price of 577m US dollar in cash, approximately 7.5x 2008 EBITDA. As part of the transaction, Ball Corporation will enter into a long-term supply agreement to continue to supply AB InBev with metal beverage cans and lids from the divested plants. Ball has committed, as part of the acquisition agreement, to offer employment to each active employee of the plants.

On 1 July 2009, AB InBev announced that it has established a Level 1 American Depository Receipt (ADR) program in the US. Each ADR represents one ordinary share of AB InBev common stock and trades over-the-counter under the ticker symbol “AHBIY”. AB InBev ordinary shares continue to trade on Euronext Brussels under the symbol “ABI”.

On 22 July 2009, the Brazilian antitrust authority CADE issued its ruling in a 2004 complaint filed by Schincariol, imposing a 352m Brazilian real (180m US dollar) fine. The ruling was based on an investigation conducted by the Secretariat of Economic Law of the Ministry of Justice (“SDE”). SDE concluded that AmBev’s customer loyalty program should be considered anticompetitive unless certain adjustments were made, which have already been substantially incorporated into the program’s current version. The SDE opinion did not suggest any fines and recommended that accusations be dismissed. AmBev intends to appeal in the administrative and judicial courts.

On 24 July 2009 AB InBev announced that it completed the previously announced sale of its Korean subsidiary Oriental Brewery (“OB”) to an affiliate of Kohlberg Kravis Roberts & Co. L.P. (“KKR”) for 1.8b US dollar. Under the terms of the agreement, AB InBev will continue its relationship with OB through granting OB exclusive licenses to distribute certain brands in South Korea including Budweiser, Bud Ice and Hoegaarden and by having an ongoing interest in OB through an agreed earnout. In addition, AB InBev has the right but not the obligation to reacquire OB after five years at predetermined financial terms.

 

22. SUPPLEMENTAL UNAUDITED GUARANTOR INTERIM FINANCIAL INFORMATION

On 13 October 2009, Anheuser-Busch InBev Worldwide Inc. issued (i) $1.50 billion principal amount of 3.000% unsecured notes due 2012, (ii) $1.25 billion principal amount of 4.125% unsecured notes due 2015, (iii) $2.25 billion principal amount of 5.375% unsecured notes due 2020 and (iv) $0.50 billion principal amounts of 6.375% unsecured notes due 2040 (collectively the “New Notes”). The New Notes are fully and unconditionally guaranteed by Anheuser-Busch InBev SA/NV (the “Parent Guarantor”). In addition, certain of the Parent Guarantor’s direct and indirect wholly-owned subsidiaries (the “Subsidiary Guarantors”), collectively the “Guarantors”, jointly and severally guarantee the Notes, subject to certain limitations.

The following condensed consolidating financial information presents the Unaudited Condensed Consolidating Interim Statement of Financial Position as of 30 June 2009, the Condensed Unaudited Consolidating Interim Income Statement and the Unaudited Condensed Consolidating Interim Statement of Cash Flows as for the six-month period ended 30 June 2009 and

 

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2008 of (a) AB InBev SA/NV (the Parent Guarantor), (b) Anheuser-Busch Worldwide Inc. InBev (the Issuer), (c) the Subsidiary Guarantors, (d) the non-guarantor subsidiaries, (e) elimination entries necessary to consolidate the Parent with the issuer, the guarantor subsidiaries and the non-guarantor; and (e) the Company on a consolidated basis. Investments in consolidated subsidiaries are presented under the equity method of accounting. Separate financial statements and other disclosures with respect to the guarantor subsidiaries have not been provided as management believes the following information is sufficient, as the guarantor subsidiaries are 100% owned by the Parent and all guarantees are full and unconditional. Except as disclosed in Note 23 to our 31 December 2008 annual financial statements, there are no restrictions on the Company’s ability to obtain funds from any of its direct or indirect wholly owned subsidiaries through dividends, loans or advances as a result of the issuance of the New Notes.

 

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Unaudited Condensed Consolidating Interim Income Statement

 

For the six month period ended
30 June 09 Million US dollar
  

AB InBev

SA/NV

   AB InBev
Worldwide
Inc
   Subsidiary
Guarantors
  

Non-

Guarantors

   Eliminations    TOTAL

Revenue

   -    -    9 051    9 346    (699)    17 698

Cost of sales

   (1)    -    (4 729)    (4 359)    699    (8 390)

Gross profit

   (1)    -    4 322    4 987    -    9 308
   -    -    -    -    -    -

Distribution expenses

   -    -    (375)    (901)    -    (1 276)

Sales and marketing expenses

   (30)    -    (1 012)    (1 229)    -    (2 271)

Administrative expenses

   427    (475)    (434)    (608)    -    (1 090)
Other operating income/(expenses), net    (121)    -    191    187    -    257

Profit from operations

   275    (475)    2 692    2 436    -    4 928

Net finance cost

   (631)    (589)    (466)    (307)    -    (1 993)

Share of result of associates

   -    -    (1)    229    -    228

Profit before tax

   (356)    (1 064)    2 225    2 358    -    3 163

Income tax expense

   50    386    (806)    (450)    -    (820)

Profit after tax

   (306)    (678)    1 419    1 908    -    2 343

Income from subsidiaries

   2 093    1 634    1 347    957    (6 031)    -

Profit

   1 787    956    2 766    2 865    (6 031)    2 343

Attributable to:

                 

Equity holders of AB InBev

   1 787    956    2 766    2 309    (6 031)    1 787

Minority interests

   -    -    -    556    -    556

Unaudited Condensed Consolidating Interim Income Statement

 

For the six month period ended
30 June 08 Million US dollar
   AB InBev
SA
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

  

Non-

Guarantors

   Eliminations    TOTAL

Revenue

   -    -    1 807    8 925    (169)    10 563

Cost of sales

   (1)    -    (970)    (3 663)    169    (4 465)

Gross profit

   (1)    -    837    5 262    -    6 098
   -    -    -    -    -    -

Distribution expenses

   -    -    (212)    (1 084)    -    (1 296)

Sales and marketing expenses

   (30)    -    (307)    (1 357)    -    (1 694)

Administrative expenses

   (10)    -    (168)    (552)    -    (730)
Other operating income/(expenses), net    72    -    (47)    106    -    131

Profit from operations

   31    -    103    2 375    -    2 509

Net finance cost

   (26)    -    (76)    (411)    -    (513)

Share of result of associates

   1    -    -    2    -    3

Profit before tax

   6    -    27    1 966    -    1 999

Income tax expense

   130    -    26    (388)    -    (232)

Profit after tax

   136    -    53    1 578    -    1 767

Income from subsidiaries

   1 072    -    1 015    -    (2 087)    -

Profit

   1 208    -    1 068    1 578    (2 087)    1 767

Attributable to:

                 

Equity holders of AB InBev

   1 208    -    1 068    1 019    (2 087)    1 208

Minority interests

   -    -    -    559    -    559

 

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Unaudited Condensed Consolidating Interim Statement of Financial Position

 

As at 30 June 09 Million US dollar    AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

  

Non-

Guarantors

   Eliminations    TOTAL

ASSETS

                 

Non-current assets

                 

Property, plant and equipment

   87    -    10 443    8 407    -    18 937

Goodwill

   -    -    33 441    16 950    -    50 391

Intangible assets

   131    -    22 008    1 555    -    23 694

Investments in subsidiaries

   50 267    54 211    24 667    27 364    (156 509)    -

Investments in associates

   1    -    123    6 348    -    6 472

Other non-current assets

   1 984    1    3 612    1 807    (4 629)    2 775
   52 470    54 212    94 294    62 431    (161 138)    102 269

Current assets

                 

Inventories

   -    -    1 111    1 491    -    2 602

Trade and other receivables

   3 330    -    3 107    2 992    (5 096)    4 333

Cash and cash equivalents

   115    96    6 248    (120)    -    6 339

Other current assets

   -    -    79    2 077    -    2 156
   3 444    96    10 545    6 440    (5 096)    15 430

Total assets

   55 915    54 308    104 839    68 871    (166 234)    117 699

EQUITY AND LIABILITIES

                 

Equity

                 
Equity attributable to equity holders of AB InBev    30 666    27 776    68 847    54 806    (156 509)    25 586

Minority interests

   -    -    5    2 408    -    2 413
   30 666    27 776    68 852    57 214    (156 509)    27 999

Non-current liabilities

                 
Interest-bearing loans and borrowings    20 197    25 244    10 355    4 496    (4 629)    55 663

Employee benefits

   2    -    2 250    589    -    2 841

Deferred tax liabilities

   -    -    11 150    758    -    11 908

Other non-current liabilities

   214    -    1 764    1 208    -    3 186
   20 413    25 244    25 519    7 051    (4 629)    73 598

Current liabilities

                 
Interest-bearing loans and borrowings    2 381    -    3 790    1 487    (3 778)    3 880

Trade and other payables

   651    870    4 981    5 133    (1 318)    10 317

Other current liabilities

   1 804    418    1 697    (2 014)    -    1 905
   4 836    1 288    10 468    4 606    (5 096)    16 102

Total equity and liabilities

   55 915    54 308    104 839    68 871    (166 234)    117 699

 

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Unaudited Condensed Consolidating Interim Statement of Cash Flows

 

For the six month period ended
30 June 09

Million US dollar

   AB InBev
SA/NV
   AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

  

Non-

Guarantors

   Eliminations    TOTAL

OPERATING ACTIVITIES

                 

Profit

   1 787    956    2 766    2 865    (6 031)    2 343
Depreciation, amortization and impairment    28    -    643    748    -    1 419
Additions/(reversals) in provisions and employee benefits    31    -    (71)    61    -    21

Net finance cost

   632    589    426    346    -    1 993

Income tax expense

   (50)    (386)    806    450    -    820

Investment in subsidiary income

   (2 093)    (1 634)    (1 347)    (957)    6 031    -

Other items

   57    -    4    (255)    -    (194)
Cash flow from operating activities before changes in working capital and use of provisions    392    (475)    3 227    3 258    -    6 402
Increase/(decrease) in trade and other payables    142    475    262    187    (1 081)    (15)

Other working capital and provisions

   (527)    -    (413)    (485)    1 116    (309)

Cash generated from operations

   7    -    3 076    2 960    35    6 078

Interest paid, net

   (200)    (306)    (174)    (279)    -    (959)

Dividends received

   154    -    580    796    (1 530)    -

Income tax paid

   25    -    77    (154)    -    (52)
Cash flow from operating activities    (14)    (306)    3 559    3 323    (1 495)    5 067

INVESTING ACTIVITIES

                 
Acquisition of subsidiaries, net of cash acquired    (105)    (404)    (792)    (28)    800    (529)

Purchase of minority interests

   -    -    -    -    -    -
Acquisition of property, plant and equipment and of intangible assets    (18)    -    (204)    (452)    -    (674)
Net proceeds/(acquisition) of other assets    (2 777)    -    (571)    (6)    4 714    1 360
Cash Flow from Investing Activities    (2 900)    (404)    (1 567)    (486)    5 514    157

FINANCING ACTIVITIES

                 
Net proceeds from the issue of share capital    1    -    433    (162)    (239)    33

Net purchase of treasury shares

   18    -    -    (18)    -    -

Proceeds from borrowings

   9 192    -    5 545    1 653    (5 792)    10 598

Payments on borrowings

   (7 002)    (495)    (2 588)    (1 945)    490    (11 540)
Cash net finance costs other than interests    (330)    -    420    40    -    130

Dividends paid

   (621)    -    (326)    (1 230)    1 504    (673)
Cash flow from financing activities    1 258    (495)    3 484    (1 662)    (4 037)    (1 452)
Net increase/(decrease) in cash and cash equivalents    (1 656)    (1 205)    5 476    1 175    (18)    3 772
Cash and cash equivalents less bank overdrafts at beginning of year    -    398    271    1 502    -    2 171

Effect of exchange rate fluctuations

   57    -    (39)    210    18    246

Cash and cash equivalents less bank overdrafts at end of year

   (1 599)    (807)    5 708    2 887    -    6 189

 

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Unaudited Condensed Consolidating Interim Statement of Cash Flows

 

For the six month period ended
30 June 08

Million US dollar

   AB InBev
SA/NV
    AB InBev
Worldwide
Inc
  

Subsidiary

Guarantors

   

Non-

Guarantors

    Eliminations     TOTAL  

OPERATING ACTIVITIES

             

Profit

   1 208      -    1 068      1 578      (2 087   1 767   
Depreciation, amortization and impairment    15      -    154      702      -      871   
Additions/(reversals) in provisions and employee benefits    2      -    43      64      -      109   

Net finance cost

   25      -    71      417      -      513   

Income tax expense

   (130   -    (26   388      -      232   

Investment in subsidiary income

   (1 072   -    (1 015   -      2 087      -   

Other items

   24      -    (18   17      -      23   
Cash flow from operating activities before changes in working capital and use of provisions    72      -    277      3 166      -      3 515   
Increase/(decrease) in trade and other payables    (92   -    109      74      (193   (102

Other working capital and provisions

   (139   -    (199   (463   199      (602
Cash generated from operations    (159   -    187      2 777      6      2 811   

Interest paid, net

   4      -    (93   (427   1      (515

Dividends received

   782      -    712      575      (2 069   -   

Income tax paid

   2      -    (2   (466   -      (466
Cash flow from operating activities    629      -    804      2 459      (2 062   1 830   

INVESTING ACTIVITIES

             
Acquisition of subsidiaries, net of cash acquired    -      -    (14   (182   120      (76

Purchase of minority interests

   -      -    -      (858   -      (858
Acquisition of property, plant and equipment and of intangible assets    (37   -    (198   (880   -      (1 115

Net proceeds/(acquisition) of other assets

   1 572      -    (2 362   (594   1 414      30   
Cash Flow from Investing Activities    1 535      -    (2 574   (2 514   1 534      (2 019

FINANCING ACTIVITIES

             
Net proceeds from the issue of share capital    36      -    -      117      (117   36   

Net purchase of treasury shares

   (300   -    (766   (14   -      (1 080

Proceeds from borrowings

   986      -    4 614      3 790      (1 306   8 084   

Payments on borrowings

   (734   -    (1 307   (2 738   (124   (4 903
Cash net finance costs other than interests    (3   -    (4   (248   -      (255

Dividends paid

   (1 970   -    (997   (1 321   2 076      (2 212
Cash flow from financing activities    (1 985   -    1 540      (414   529      (330
Net increase/(decrease) in cash and cash equivalents    179      -    (230   (469   1      (519
Cash and cash equivalents less bank overdrafts at beginning of year    1      -    183      1 647      -      1 831   

Effect of exchange rate fluctuations

   (162   -    (50   61      1      (150
Cash and cash equivalents less bank overdrafts at end of year    18      -    (97   1 239      2      1 162   

 

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INDEX TO THE AB INBEV GROUP 2008 FULL YEAR PRO-FORMA FINANCIAL INFORMATION

 

Unaudited pro-forma condensed consolidated financial information for the year ended 31 December 2008

Unaudited Pro-Forma Condensed Consolidated Income Statement

   PF-3

Notes to the Unaudited Pro-Forma Condensed Consolidated Income Statement

   PF-4

 

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UNAUDITED PRO-FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro-forma financial information presents the condensed consolidated income statement of Anheuser-Busch InBev SA/NV (“ AB InBev ”) as if (i) the Anheuser-Busch acquisition described under “Business Description—Material Contracts—The Merger Agreement” in this Form F-4 had occurred on 1 January 2008, and (ii) the related initial financing of the Anheuser-Busch acquisition and (iii) the subsequent refinancing of indebtedness under the equity bridge facility through a rights offering, as described under “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”, had also occurred on 1 January 2008.

The unaudited pro-forma financial information is based in part on the historical financial statements and notes thereto of AB InBev as of 31 December 2008 and 2007 and for the three years ended 31 December 2008, which are included in this Form F-4 (the “AB InBev Financial Statements”). It should be read in conjunction with those historical financial statements and the notes thereto.

Anheuser-Busch’s pre-acquisition income statement for the period from 1 January 2008 to 18 November 2008 used in the preparation of the unaudited pro-forma financial information differs from the Anheuser-Busch historical financial statements included on the AF pages of this Form F-4 because the pre-acquisition income statement has been prepared on a basis consistent in all material respects with the accounting policies of AB InBev in accordance with IFRS. The Anheuser-Busch historical financial statements included on the AF pages of this Form F-4 have been prepared in accordance with accounting principles generally accepted in the United States (“ U.S. GAAP ”).

The preparation of the unaudited pro forma financial information includes the impact of certain purchase accounting adjustments, such as estimated changes in depreciation and amortization expense on acquired tangible and intangible assets, that are expected to have a recurring impact to AB InBev, as well as elimination of intercompany balances between Anheuser-Busch and AB InBev. However, those adjustments do not include any anticipated cost savings or other effects of the planned integration of Anheuser-Busch, nor do they include the non-recurring impact of directly attributable acquisition and integration costs, such as advisory and legal fees, incurred for the pre- and post-acquisition periods. Accordingly, the amounts shown in the AB InBev unaudited pro forma condensed consolidated income statement are not necessarily indicative of the results that would have resulted if the combination had occurred on 1 January 2008 or that may result in the future.

The unaudited pro-forma financial information is for information purposes only. Because of its nature, it addresses a hypothetical situation and it is not intended to represent or to be indicative of the combined results of operations that we would have reported had the acquisition of Anheuser-Busch been completed as of the dates described. It should not be relied upon as representative of the historical consolidated results of operations that would have been achieved, or the future consolidated results of operations that can be expected. The unaudited pro-forma adjustments, described in the accompanying notes, are based on available information and certain assumptions that management believes are reasonable for purposes of this Form F-4.

 

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Unaudited Pro-forma Condensed Consolidated Income Statement

For the Year Ended 31 December 2008

 

    AB InBev
Historical
Consolidated
Income
Statement
  Anheuser-
Busch
1 January to
18 November
2008 (*)(1)
  Purchase
Accounting
Adjustments (2)
  Intercompany
Eliminations (3)
  Sale of
InBev
USA
LLC (4)
  Finance Cost
Adjustments (5)
  Pro-forma
Combined
    (in USD million, unless otherwise indicated)

Revenue

  23,507   15,811     (161)   (155)     39,002

Cost of sales

  (10,336)   (9,208)   (141)   242   86     (19,357)
                           

Gross profit

  13,171   6,603   (141)   81   (69)     19,645

Distribution expenses

  (2,725)   (729)           (3,454)

Sales and marketing expenses

  (3,510)   (2,636)   (23)     37     (6,132)

Administrative expenses

  (1,478)   58   (3)     7     (1,416)

Other operating income/(expenses)

  440   81     (81)       440

Restructuring (including impairment losses)

  (457)   (204)           (661)

Fair value adjustments

  (43)             (43)

Business and asset disposal

  (38)             (38)

Disputes

  (20)             (20)
                           

Profit from operations

  5,340   3,173   (167)     (25)     8,321

Finance cost

  (1,888)   (518)   (53)       (1,761)   (4,220)

Finance income

  288             288
                           

Net finance cost

  (1,600)   (518)   (53)       (1,761)   (3,932)

Share of result of associates

  60   532           592
                           

Profit before tax

  3,800   3,187   (220)     (25)   (1,761)   4,981

Income tax expense

  (674)   (988)   86     10   485   (1,081)
                           

Profit

  3,126   2,199   (134)     (15)   (1,276)   3,900

Minority interests

  1,199   4           1,203
                           

Profit attributable to our equity holders

  1,927   2,195   (134)     (15)   (1,276)   2,697
                           

Basic earnings per share (USD)

  1.93             1.70

Diluted earnings per share (USD)

  1.93             1.70

Weighted average number of ordinary shares (basic) (millions) (**)

  999             1,584

Weighted average number of ordinary shares (diluted) (millions) (**)

  1,000             1,585

 

Note:

(*)

Includes the impact of adjustments to Anheuser-Busch to conform to AB InBev’s IFRS accounting policies.

(**)

Pro-forma weighted average number of ordinary shares assumes that the December 2008 issuance of 623 million incremental shares associated with the December 2008 rights offering occurred on 1 January 2008 (see notes 23 and 24 to the AB InBev Financial Statements).

See Notes to the Unaudited Pro-forma Condensed Consolidated Income Statement

 

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Notes to the Unaudited Pro-forma Condensed Consolidated Income Statement

 

1.

Presentation of Anheuser-Busch income statement information

For pro-forma purposes, IFRS adjustments were made to the historical financial information of Anheuser-Busch prepared under U.S. GAAP to align with the IFRS accounting policies of AB InBev. Such adjustments relate to employee benefits, inventory and borrowing costs. The following table illustrates the impact of these adjustments in arriving at the Anheuser-Busch income statement information from 1 January to 18 November 2008, as presented in the Unaudited Pro-forma Condensed Consolidated Income Statement:

 

     AB Historical
U.S.GAAP

1 January to
18 November
2008
   IFRS
Adjustments
   1 January to
18 November
2008
     (USD million)

Revenue

   15,811       15,811

Cost of sales

   (9,364)    156    (9,208)
              

Gross profit

   6,447    156    6,603

Distribution expenses

   (729)       (729)

Sales and marketing expenses

   (2,636)       (2,636)

Administrative expenses

   74    (16)    58

Other operating income/(expenses)

   81       81

Restructuring (including impairment losses)

   (204)       (204)

Fair value adjustments

        

Business and asset disposal

        

Disputes

        
              

Profit from operations

   3,033    140    3,173

Finance cost

   (518)       (518)

Finance income

   (15)    15   
              

Net finance cost

   (533)    15    (518)

Share of result of associates

   532       532
              

Profit before tax

   3,032    155    3,187

Income tax expense

   (926)    (62)    (988)
              

Profit

   2,106    93    2,199

Minority interests

   4       4
              

Profit attributable to equity holders of AB InBev

   2,102    93    2,195
              

 

2.

Purchase accounting adjustments

AB InBev is in the process of finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed in compliance with IFRS 3. The impact of the provisional purchase price allocation primarily relates to the additional depreciation and amortisation of fair value adjustments to tangible and intangible assets acquired, and also the accretion of the fair value adjustments recorded in respect of the acquired Anheuser-Busch debt (see note 6 to the AB InBev Financial Statements and note 6 to the AB InBev condensed interim financial statements). The provisional allocation of the purchase price is based on the current best estimates of AB InBev’s management with input from independent third parties. The completion of the purchase price allocation may result in further adjustment to the carrying value of Anheuser-Busch’s recorded assets and liabilities and the determination of any residual amount that will be allocated to goodwill, which could have a corresponding impact to depreciation and amortisation.

 

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3.

Intercompany eliminations

For pro-forma purposes, intercompany eliminations between AB InBev and Anheuser-Busch have been recorded in relation to import and distribution arrangements in the United States between AB InBev and Anheuser-Busch, as well as other import or license agreements between AB InBev and Anheuser-Busch in the Dominican Republic, South Korea and Canada.

 

4.

Sale of InBev USA LLC

On 13 March 2009, AB InBev announced that it had completed the sale of the assets of InBev USA LLC to an affiliate of KPS Capital Partners, LP. The transaction was undertaken to satisfy requirements imposed by the United States Department of Justice in connection with its clearance of the Anheuser-Busch acquisition. AB InBev used the proceeds from this sale to pay down a portion of the debt incurred to finance the Anheuser-Busch acquisition under the senior facilities agreement. Such use of proceeds has not been reflected in the pro forma adjustments. This sale would have reduced pro-forma profit attributable to equity holders of AB InBev in 2008 by USD 15 million, or less than 1%.

 

5.

Finance cost adjustments

On 18 November 2008, AB InBev borrowed USD 44 billion under a senior facilities agreement to fund the Anheuser-Busch acquisition (see “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition—Senior Facilities Agreement”). Pro forma adjustments to finance cost reflect the additional interest charges under the senior facilities agreement, which bears interest equal to LIBOR plus margins ranging from 1.0% to 1.75%, as if the borrowing of USD 44 billion had occurred on 1 January 2008.

For purposes of this pro-forma financial information, AB InBev has assumed hedged rates of 4.038% per annum (plus applicable margin) for USD 25 billion relating to Facility C and Facility D of the senior facilities agreement, and 3.577% per annum (plus applicable fixed spreads) for USD 4.5 billion of Facility A of the senior facilities agreement. For remaining amounts borrowed under the senior facilities agreement, a three-month LIBOR rate of 0.65% (plus applicable margin) has been assumed. A 1/8% change in the interest rate on variable rate indebtedness under the amounts of the senior facilities agreement that assume a three-month LIBOR would impact AB InBev’s annual interest expense by USD 18.0 million before tax (USD 13.0 million after tax).

In addition to incremental interest charges, AB InBev has recorded a pro-forma adjustment in relation to arrangement fees, assuming the borrowing on the senior facilities occurred on 1 January 2008, which would be deferred and amortised over the duration of the borrowings in accordance with IFRS.

USD 9.8 billion borrowed under the equity bridge facility in November 2008 was repaid in full using funds raised in connection with the rights offering and cash proceeds received by AB InBev from hedging the foreign exchange rate between the euro and the U.S. dollar in connection with the rights offering (see “Business Description—Material Contracts—Financing the Anheuser-Busch Acquisition”). AB InBev incurred costs relating to commitment fees and underwriting and arrangement fees for the equity bridge facility (see note 11 to the AB InBev Financial Statements). There have been no impacts of the repayment of the equity bridge facility reflected in the pro forma finance cost adjustments.

As of the date of this Form F-4, AB InBev has refinanced over USD 20 billion of borrowings under the senior facilities agreement and other debt through various debt capital markets transactions (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Net Debt and Equity”). These refinancings have resulted in issuance of notes with maturities ranging from 5 to 30 years, and interest rates ranging from 4.5% to 9.7%. These transactions have not been reflected in the unaudited pro-forma condensed consolidated income statement.

 

PF-5


Table of Contents

AB InBev has also repaid or expects to repay portions of the senior facilities agreement with cash flow from operations or proceeds from asset disposals. For purposes of this pro-forma information, no consideration has been given to such repayments.

AB InBev may continue to seek alternatives to refinance a portion of the senior facilities agreement in order to continue diversification of its funding sources and to extend the maturity of a portion of the debt, through further debt capital markets issuances or in part through disposals of assets or businesses. For purposes of this pro-forma financial information, AB InBev has assumed that no such financings, refinancings or repayments have occurred.

 

6.

Income tax expense

The pro-forma adjustment to income tax expense relates to the tax effect applied to each of the pro-forma adjustments described above, at the relevant statutory rates, which has resulted in an average rate on tax deductible pro-forma finance cost adjustments of 28% and an average rate on tax deductible purchase accounting adjustments of 39%. A statutory rate of 40% has been applied to pro-forma adjustments for the sale of InBev USA LLC.

 

7.

Divestitures

As at 31 December 2008, AB InBev had USD 51 million of land and buildings, primarily in Brazil and the U.S., classified as assets held for sale. No gain or loss was recorded with respect to these assets during 2008 (see note 22 to the AB InBev Financial Statements).

On 23 January 2009, AB InBev announced its agreement to sell to Asahi Breweries, Ltd a 19.9% interest in Tsingtao Brewery Co., Ltd. for USD 667 million. AB InBev acquired the equity investment in Tsingtao Brewery Co., Ltd. upon the purchase of Anheuser-Busch, initially retaining a 7% minority share. The transaction closed on 30 April 2009. On 8 May 2009, AB InBev sold the remaining 7%. AB InBev will use the proceeds from this sale to pay down a portion of the senior facilities agreement. No consideration has been given to these disposals or any related repayments in preparing this pro-forma financial information. The impact of this sale would have reduced pro-forma Profit attributable to equity holders of AB InBev in 2008 by USD 22 million, or less than 1%.

On 24 July 2009, AB InBev announced that it completed the sale of Oriental Brewery to Kohlberg Kravis Roberts & Co. L.P for USD 1.8 billion of which USD 1.5 billion was cash. No consideration has been given to this disposal or any related repayment in preparing this pro-forma financial information. The impact of this sale would have reduced pro-forma Profit attributable to equity holders of AB InBev in 2008 by USD 135 million, or approximately 5%.

On 29 September 2009, we completed the previously announced sale of our Tennent’s Lager brand and associated trading assets in Scotland, Northern Ireland and the Republic of Ireland (part of InBev UK Limited) to C&C Group plc for a total enterprise value of GBP 180 million. No consideration has been given to those disposals or any related payments in preparing this pro-forma financial information. The impact of this sale would have reduced pro-forma Profit attributable to equity holders of AB InBev in 2008 by approximately USD 9 million, or less than 1%.

On 1 October 2009, we completed the sale of four metal beverage can and lid manufacturing plants from our US metal packaging subsidiary, Metal Container Corporation, to Ball Corporation for approximately USD 577 million. No consideration has been given to those disposals or any related payments in preparing this pro-forma financial information. The impact of this sale would have reduced pro-forma Profit attributable to equity holders of AB InBev in 2008 by approximately USD 5 million, or less than 1%.

 

PF-6


Table of Contents

On 1 December 2009, we completed the sale of our indirect wholly owned subsidiary Busch Entertainment Corporation, to an entity established by Blackstone Capital Partners V L.P., for up to USD 2.7 billion. The purchase price was comprised of a cash payment of USD 2.3 billion and a right to participate in Blackstone Capital Partners’ return on its initial investment, which is capped at USD 400 million. No consideration has been given to those disposals or any related payments in preparing this pro-forma financial information. The impact of this sale would have reduced pro-forma Profit attributable to equity holders of AB InBev in 2008 by USD 148 million, or approximately 5%.

On 2 December 2009, we completed the sale of our Central European operations to CVC Capital Partners for an enterprise value of USD 2,231 million and additional rights to a future payment estimated up to USD 800 million contingent on CVC’s return on its initial investments. No consideration has been given to those disposals or any related payments in preparing this pro-forma financial information. The impact of this sale would have reduced pro-forma Profit attributable to equity holders of AB InBev in 2008 by USD 115 million, or approximately 4%.

AB InBev, from time to time, will evaluate prospects for the sale of certain assets. However, no consideration has been given to any such asset or business disposals, including those described above, or the use of the proceeds therefrom, in preparing AB InBev’s pro-forma financial information. For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Results of Operations—Acquisitions, Divestitures and Other Structural Changes”. For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook and Trend Information”.

 

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ANHEUSER-BUSCH COMPANIES, INC. HISTORICAL FINANCIAL INFORMATION

Report on the Consolidated Balance Sheet of Anheuser-Busch Companies, Inc. at 31 December 2008

 

Report of Independent Registered Public Accounting Firm

   AF-3

Financial Statements and Schedules of Anheuser-Busch Companies, Inc., as extracted from the Anheuser-Busch annual report on Form 10-K for the year ended December 31, 2007 filed with the SEC on 29 February 2008

Report of Independent Registered Public Accounting Firm

   AF-4

Consolidated Balance Sheet at December 31, 2007 and 2006

   AF-5

Consolidated Statement of Income for the three years ended December 31, 2007

   AF-6

Consolidated Statement of Changes in Shareholders’ Equity for the three years ended December  31, 2007

   AF-7

Consolidated Statement of Cash Flows for the three years ended December 31, 2007

   AF-8

Notes to the Consolidated Financial Statements

   AF-9

Financial Statements of Anheuser-Busch Companies, Inc., as extracted from the Anheuser-Busch quarterly report on Form 10-Q for the period ended September 30, 2008 filed with the SEC on 6 November 2008

Anheuser-Busch Companies, Inc. and Subsidiaries Consolidated Balance Sheet (Unaudited)

   AF-36

Anheuser-Busch Companies, Inc. and Subsidiaries Consolidated Statement of Income (Unaudited)

   AF-37

Anheuser-Busch Companies, Inc. and Subsidiaries Consolidated Statement of Cash Flows (Unaudited)

   AF-38

Anheuser-Busch Companies,  Inc. and Subsidiaries Notes to the Unaudited Consolidated Financial Statements

   AF-39

The financial statements and schedules extracted from Form 10-K and Form 10-Q have been reproduced as filed by Anheuser-Busch with the SEC. The terms “Company” or “company” in such extracted financial statements and schedules refer to Anheuser-Busch Companies, Inc.

 

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NOTICE

The historical financial information regarding Anheuser-Busch as of, and for the years ended, 31 December 2007, 2006 and 2005 and for the nine-month periods ended 30 September 2008 and 2007, contained in these AF pages, consists, save as otherwise noted below, of extracts from the Anheuser-Busch annual report on Form 10-K for the year ended 31 December 2007 filed with the SEC on 29 February 2008 (the “ Form 10-K ”) and the Anheuser-Busch quarterly report on Form 10-Q for the period ended 30 September 2008 filed with the SEC on 6 November 2008 (the “ Form 10-Q ”). All such information extracted from the Form 10-K and Form 10-Q has been filed with or furnished to the SEC and is available on the SEC website at www.sec.gov. Information set forth on the SEC website is not considered to be part of this Form F-4 and is not incorporated by reference herein. The full Form 10-K and Form 10-Q are not to be considered part of this Form F-4 and are not incorporated by reference herein.

Prior to the closing of the Anheuser-Busch acquisition, Anheuser-Busch prepared its consolidated financial statements in accordance with generally accepted accounting principles in the United States, which differ in certain respects from International Financial Reporting Standards. Accordingly, the financial information of Anheuser-Busch presented in these AF pages is not directly comparable to the financial information of InBev, prior to the closing of the Anheuser-Busch acquisition, or Anheuser-Busch InBev SA/NV, following the closing of the Anheuser-Busch acquisition, presented elsewhere in this Form F-4, since, among other things, InBev and Anheuser-Busch InBev SA/NV prepares its financial information in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and in conformity with International Financial Reporting Standards as adopted by the European Union. As Anheuser-Busch used the U.S. dollar as its reporting currency, amounts given as Anheuser-Busch financial information are set forth in U.S. dollars unless otherwise indicated.

The Anheuser-Busch financial information in these AF pages has been extracted without material adjustment from the financial statements of Anheuser-Busch in Form 10-K and Form 10-Q filed with the SEC, except that (i) certain defined terms have been modified to maintain consistency with this Form F-4, and (ii) cross references, including to information contained in the consolidated financial statements of Anheuser-Busch, have been modified to reflect the manner in which the information is set forth in this Form F-4. The historical volume information of Anheuser-Busch presented in these AF pages is presented in barrels. For informational purposes, we estimate that 1 barrel = 1.1734776 hectolitres.

Anheuser-Busch’s audited consolidated financial statements included herein were audited by PricewaterhouseCoopers LLP.

The Anheuser-Busch information herein is as of such earlier date as specified in such information and speaks only as of such date.

Some figures in these AF pages may not sum due to rounding. Some percentages in these AF pages have been calculated using unrounded figures.

For purposes of the remainder of these AF pages only, the terms “the company”, “we”, “us”, and “our” refer to Anheuser-Busch and its consolidated subsidiaries.

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Anheuser-Busch InBev SA/NV:

We have audited the accompanying consolidated balance sheet of Anheuser-Busch Companies, Inc. and its subsidiaries as of December 31, 2008. This financial statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of Anheuser-Busch Companies, Inc. and its subsidiaries at December 31, 2008 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

St. Louis, MO

June 26, 2009

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Anheuser-Busch Companies, Inc.

We have audited the accompanying consolidated balance sheets of Anheuser-Busch Companies, Inc. and its subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of income, changes in shareholders equity and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Anheuser-Busch Companies, Inc. and its subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 5 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standard No. 158, “ Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans ,” as of December 31, 2006.

 

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

St. Louis, MO

February 27, 2008

 

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CONSOLIDATED BALANCE SHEET

 

Year Ended December 31

   2007    2006
     (in millions, except per share)

Assets

     

Current Assets

     

Cash

   $283.2    $219.2

Accounts receivable

   805.2    720.2

Inventories

   723.5    694.9

Other current assets

   212.6    195.2
         

Total current assets

   2,024.5    1,829.5

Investments in affiliated companies

   4,019.5    3,680.3

Plant and equipment, net

   8,833.5    8,916.1

Intangible assets, including goodwill of $1,134.6 and $1,077.8, respectively

   1,547.9    1,367.2

Other assets

   729.6    584.1
         

Total Assets

   $17,155.0    $16,377.2
         

Liabilities and Shareholders Equity

     

Current Liabilities

     

Accounts payable

   $1,464.5    $1,426.3

Accrued salaries, wages and benefits

   374.3    342.8

Accrued taxes

   106.2    133.9

Accrued interest

   136.4    124.2

Other current liabilities

   222.4    218.9
         

Total current liabilities

   2,303.8    2,246.1
         

Retirement benefits

   1,002.5    1,191.5
         

Debt

   9,140.3    7,653.5
         

Deferred income taxes

   1,314.6    1,194.5
         

Other long-term liabilities

   242.2    152.9
         

Shareholders Equity

     

Common stock, $1.00 par value, authorized 1.6 billion shares

   1,482.5    1,473.7

Capital in excess of par value

   3,382.1    2,962.5

Retained earnings

   17,923.9    16,741.0

Treasury stock, at cost

   (18,714.7)    (16,007.7)

Accumulated nonowner changes in shareholders equity

   (922.2)    (1,230.8)
         

Total Shareholders Equity

   3,151.6    3,938.7
         

Commitments and contingencies

     
         

Total Liabilities and Shareholders Equity

   $17,155.0    $16,377.2
         

The footnotes on pages AF-9 through AF-32 of this report are an integral component of the company’s consolidated financial statements.

 

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CONSOLIDATED STATEMENT OF INCOME

 

Year Ended December 31

   2007    2006    2005
     (in millions, except per share)

Gross sales

   $18,988.7    $17,957.8    $17,253.5

Excise taxes

   (2,303.0)    (2,240.7)    (2,217.8)
              

Net sales

   16,685.7    15,717.1    15,035.7

Cost of sales

   (10,836.1)    (10,165.0)    (9,606.3)
              

Gross profit

   5,849.6    5,552.1    5,429.4

Marketing, distribution and administrative expenses

   (2,982.1)    (2,832.5)    (2,837.5)

Gain on sale of distribution rights

   26.5      

Litigation settlement

         (105.0)
              

Operating income

   2,894.0    2,719.6    2,486.9

Interest expense

   (484.4)    (451.3)    (454.5)

Interest capitalized

   17.4    17.6    19.9

Interest income

   3.9    1.8    2.4

Other income/(expense), net

   (8.2)    (10.8)    2.7
              

Income before income taxes

   2,422.7    2,276.9    2,057.4

Provision for income taxes

   (969.8)    (900.5)    (811.1)

Equity income, net of tax

   662.4    588.8    498.1
              

Net income

   $2,115.3    $1,965.2    $1,744.4
              

Basic earnings per share

   $2.83    $2.55    $2.24

Diluted earnings per share

   $2.79    $2.53    $2.23

The footnotes on pages AF-9 through AF-32 of this report are an integral component of the company’s consolidated financial statements.

 

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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

 

Year Ended December 31

   2007    2006    2005
     (in millions, except per share)

Common Stock, $1.00 Par Value

        

Balance, beginning of period

   $1,473.7    $1,468.6    $1,463.0

Shares issued under stock plans

   8.8    5.1    5.6
              

Balance, end of period

   $1,482.5    $1,473.7    $1,468.6
              

Capital in Excess of Par Value

        

Balance, beginning of period

   $2,962.5    $2,685.9    $2,387.9

Stock compensation related

   135.7    138.2    134.1

Shares issued under stock plans

   283.5    138.4    163.9

Restricted stock cancellations

   0.4      
              

Balance, end of period

   $3,382.1    $2,962.5    $2,685.9
              

Retained Earnings

        

Balance, beginning of period

   $16,741.0    $15,698.0    $14,754.4

Net income

   2,115.3    1,965.2    1,744.4

Common dividends paid (per share: 2007, $1.25; 2006, $1.13; 2005, $1.03)

   (932.4)    (871.6)    (800.8)

Deferred income tax adjustment

      (50.6)   
              

Balance, end of period

   $17,923.9    $16,741.0    $15,698.0
              

Treasury Stock

        

Balance, beginning of period

   $(16,007.7)    $(15,258.9)    $(14,638.5)

Treasury stock acquired

   (2,707.1)    (745.9)    (620.4)

Stock compensation related

   0.2      

Restricted stock cancellations

   (0.1)    (2.9)   
              

Balance, end of period

   $(18,714.7)    $(16,007.7)    $(15,258.9)
              

Accumulated Nonowner Changes in Shareholders Equity

        

Balance, beginning of period

   $(1,230.8)    $(913.8)    $(988.9)

Foreign currency translation gains/(losses)

   105.2    (70.2)    184.5

Deferred hedging gains/(losses)

   (2.0)    4.5    (1.1)

Deferred securities valuation gains/(losses)

   (0.3)    1.0    (95.6)

Deferred retirement benefits costs

   205.7    159.7    (12.7)
              

Nonowner changes in shareholders equity, net of deferred income taxes

   308.6    95.0    75.1

Adoption impact of FAS 158

      (412.0)   
              

Balance, end of period

   $(922.2)    $(1,230.8)    $(913.8)
              

Total Shareholders Equity

   $3,151.6    $3,938.7    $3,679.8
              

Net Income and Nonowner Changes in Shareholders Equity

        

Net income

   $2,115.3    $1,965.2    $1,744.4

Nonowner changes in shareholders equity, net of deferred income taxes

   308.6    95.0    75.1
              

Combined Net Income and Nonowner Changes in Shareholders Equity

   $2,423.9    $2,060.2    $1,819.5
              

The footnotes on pages AF-9 through AF-32 of this report are an integral component of the company’s consolidated financial statements.

 

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CONSOLIDATED STATEMENT OF CASH FLOWS

 

Year Ended December 31

   2007    2006    2005
     (in millions)

Cash Flow from Operating Activities

        

Net Income

   $2,115.3    $1,965.2    $1,744.4

Adjustments to reconcile net income to cash provided by operating activities:

        

Depreciation and amortization

   996.2    988.7    979.0

Stock compensation expense

   135.9    122.9    134.1

Decrease in deferred income taxes

   (65.9)    (45.8)    (39.1)

Gain on sale of business

   (42.5)       (15.4)

Undistributed earnings of affiliated companies

   (249.1)    (341.8)    (288.0)

Other, net

   73.2    (168.6)    136.6
              

Operating cash flow before the change in working capital

   2,963.1    2,520.6    2,651.6

(Increase)/Decrease in working capital

   (23.5)    188.8    50.3
              

Cash provided by operating activities

   2,939.6    2,709.4    2,701.9
              

Cash Flow from Investing Activities

        

Capital expenditures

   (870.0)    (812.5)    (1,136.7)

New business acquisitions

   (155.7)    (101.0)   

Proceeds from sale of business

   41.6       48.3
              

Cash used for investing activities

   (984.1)    (913.5)    (1,088.4)
              

Cash Flow from Financing Activities

        

Increase in debt

   1,708.2    334.8    100.0

Decrease in debt

   (265.0)    (663.3)    (456.0)

Dividends paid to shareholders

   (932.4)    (871.6)    (800.8)

Acquisition of treasury stock

   (2,707.1)    (745.9)    (620.4)

Shares issued under stock plans

   304.8    143.5    161.4
              

Cash used for financing activities

   (1,891.5)    (1,802.5)    (1,615.8)
              

Net increase/(decrease) in cash during the year

   64.0    (6.6)    (2.3)

Cash, beginning of year

   219.2    225.8    228.1
              

Cash, end of year

   $283.2    $219.2    $225.8
              

The footnotes on pages AF-9 through AF-32 of this report are an integral component of the company’s consolidated financial statements.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.

Summary of Significant Accounting Policies

ACCOUNTING PRINCIPLES AND POLICIES

This summary of the significant accounting principles and policies of Anheuser-Busch Companies, Inc., and its subsidiaries is provided to assist in evaluating the company’s consolidated financial statements. These principles and policies conform to U.S. generally accepted accounting principles. The company is required to make certain estimates in preparing the financial statements that impact the reported amounts of certain assets, liabilities, revenues and expenses. All estimates are based on the company’s best information at the time and are in conformity with U.S. generally accepted accounting principles. Actual results could differ from the estimates, and any such differences are recognized when incurred.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the company and all its subsidiaries. The company consolidates all majority-owned and controlled subsidiaries, uses the equity method of accounting for investments in which the company is able to exercise significant influence, and uses the cost method for all other equity investments. All significant intercompany transactions are eliminated. Minority interests in the company’s consolidated China subsidiaries are not material.

REVENUE RECOGNITION

The company’s revenue recognition practices comply with Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.” The company recognizes revenue only when legal title transfers or services have been rendered to unaffiliated customers. For malt beverages shipped domestically to independent wholesalers, title transfers on shipment of product from the company’s breweries. For company-owned beer wholesalers, title transfers when products are delivered to retail customers. The company does not recognize any revenue when independent wholesalers sell the company’s products to retail customers. For international beer and packaging operations, title transfers on customer receipt. Entertainment operations recognize revenue when customers actually visit a park location, rather than when advance or season tickets are sold.

TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are reported at net realizable value. This value includes an allowance for estimated uncollectible receivables, which is charged to the provision for doubtful accounts. Estimated uncollectible receivables are based on the amount and status of past-due accounts, contractual terms of the receivables and the company’s history of uncollectible accounts.

FOREIGN CURRENCY

Financial statements of foreign subsidiaries where the local currency is the functional currency are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates during the period for revenues and expenses. Cumulative translation adjustments associated with net assets are reported in nonowner changes in equity and are not recognized in the income statement until the investment is sold.

Exchange rate gains or losses related to foreign currency transactions are recognized in the income statement as incurred, in the same financial statement caption as the underlying transaction, and are not material for any year shown.

TAXES COLLECTED FROM CUSTOMERS

Taxes collected from customers and remitted to tax authorities are state and federal excise taxes on beer shipments and local and state sales taxes on attendance, food service and merchandise transactions at the

 

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company’s theme parks. Excise taxes on beer shipments are shown in a separate line item in the consolidated income statement as reduction of gross sales. Sales taxes collected from customers are recognized as a liability, with the liability subsequently reduced when the taxes are remitted to the tax authority. Entertainment operations collected from customers and remitted to tax authorities total sales taxes of $67.4 million, $62.0 million and $56.4 million, respectively, in 2007, 2006 and 2005.

DELIVERY COSTS

In accordance with EITF 00-10, “Accounting for Shipping and Handling Fees and Costs,” the company reports pass-through freight costs on beer shipped to independent beer wholesalers in cost of sales. Reimbursements of these costs by wholesalers are reported in sales.

Costs incurred by company-owned beer wholesalers to deliver beer to retail customers are included in marketing, distribution and administrative expenses. These costs are considered marketing related because in addition to product delivery, drivers provide substantial marketing and other customer service functions to retailers including product display, shelf space management, distribution of promotional materials, draught line cleaning and product rotation. Delivery costs associated with company-owned beer wholesalers totaled $304.5 million, $274.1 million and $277.5 million, respectively, in 2007, 2006 and 2005.

ADVERTISING AND PROMOTIONAL COSTS

Advertising production costs are deferred and expensed the first time the advertisement is shown. Advertising media costs are expensed as incurred. Advertising costs are recognized in marketing, distribution and administrative expenses and totaled $782.7 million in 2007, $771.2 million in 2006 and $849.8 million in 2005.

Sales promotion costs are recognized as a reduction of sales when incurred, and totaled $688.6 million in 2007, $675.3 million in 2006 and $716.7 million in 2005.

FINANCIAL DERIVATIVES

Anheuser-Busch uses financial derivatives to mitigate the company’s exposure to volatility in commodity prices, interest rates and foreign currency exchange rates. The company hedges only exposures in the ordinary course of business and company policy prohibits holding or trading derivatives for profit.

The company accounts for its derivatives in accordance with FAS No. 133, “Accounting for Derivative Instruments and Hedging Activity,” which requires all derivatives to be carried on the balance sheet at fair value and meet certain documentary and analytical requirements to qualify for hedge accounting treatment. Hedge accounting creates the potential for an income statement match between the changes in fair values of derivatives and the changes in cost or values of the associated underlying transactions, generally in cost of sales, but also in marketing, distribution and administrative expense. By policy, derivatives held by the company must be designated as hedges of specific exposures at inception, with an expectation that changes in the fair value will essentially offset the change in cost or value for the underlying exposure. Liquidation of derivative positions is required whenever it is subsequently determined that an underlying transaction is not going to occur, with any gains or losses recognized in the income statement on liquidation. Fair values of derivatives are determined from market observation or dealer quotation. Commodities derivatives outstanding at December 31, 2007 all have initial terms of three years or less and the associated underlying transactions are expected to occur within that time frame.

Option premiums paid to counterparties are initially recorded as assets and subsequently adjusted to fair value each period, with the effective portion of the change in fair value reported in nonowner changes in equity until the underlying transaction occurs. Amounts due from counterparties (unrealized hedge gains) or owed to counterparties (unrealized hedge losses) are included in current assets and current liabilities, respectively.

 

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See Note 3 for additional information on underlying hedge categories, notional and fair values of derivatives, types and classifications of derivatives used, and gains and losses from hedging activity.

INCOME TAXES

The provision for income taxes is based on the income and expense amounts reported in the consolidated statement of income. Deferred income taxes are recognized for the effect of temporary differences between financial reporting and tax filing in accordance with the requirements of FAS No. 109, “Accounting for Income Taxes.” See Note 7 for additional information on the company’s provision for income taxes, deferred income tax assets and liabilities and effective tax rate.

In the first quarter of 2007, the company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” Under the Interpretation, realization of an uncertain income tax position must be estimated as “more likely than not” (i.e., greater than 50% likelihood of receiving a benefit) before it can be recognized in the financial statements. Further, the recognition of tax benefits recorded in the financial statements must be based on the amount most likely to be realized assuming a review by tax authorities having all relevant information. The Interpretation also clarified the financial statement classification of tax-related penalties and interest and set forth new disclosures regarding unrecognized tax benefits.

RESEARCH AND DEVELOPMENT COSTS AND START-UP COSTS

Research and development costs and plant start-up costs are expensed as incurred, and are not material for any year presented.

CASH

Cash includes cash in banks, demand deposits and investments in short-term marketable securities with original maturities of 90 days or less.

INVENTORIES

Inventories are valued at the lower of cost or market. The company uses the last-in, first-out method (LIFO) valuation approach to determine cost primarily for domestic production inventories, and uses average cost valuation primarily for international production and retail merchandise inventories. LIFO was used for 63% and 68% of total inventories at December 31, 2007 and 2006, respectively. Had the average cost method been used for all inventories as of December 31, 2007 and 2006, the value of total inventories would have been $183.6 million and $137.9 million higher, respectively. Following are the components of the company’s inventories as of December 31 (in millions).

 

     2007    2006

Raw materials and supplies

   $365.4    $385.6

Work in process

   109.9    110.8

Finished goods

   248.2    198.5
         

Total inventories

   $723.5    $694.9
         

INTANGIBLE ASSETS

Anheuser-Busch’s intangible assets consist of trademarks, beer distribution rights and goodwill. Trademarks and beer distribution rights meeting criteria for separate recognition as specified by FAS 142, “Goodwill and Other Intangible Assets,” are recognized in distinct asset categories. Trademarks include purchased trademarks, brand names, logos, slogans or other recognizable symbols associated with the company’s products. Trademarks are not amortized due to having indefinite lives. Domestic beer distribution rights are associated with company-owned beer wholesale operations and represent the exclusive legal right to sell the

 

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company’s products in defined geographic areas. The carrying values of these rights have indefinite lives and are not amortized, primarily due to the company’s intent to operate its wholesalerships in perpetuity and the lives not being contractually or statutorily limited. International distribution rights relate to operations in the United Kingdom and China and are being amortized over their respective useful lives. The company’s distribution rights in the United Kingdom are contractually limited and expire in 2029. Distribution rights in China are being amortized over seven years, through 2011, based on independent valuation appraisal and normal practice in China. The company analyzes its trademarks and product distribution rights for potential impairment annually, based on projected future cash flows and observation of independent beer wholesaler exchange transactions.

The company recognizes the excess of the cost of acquired businesses over the fair value of the net assets purchased as goodwill. Goodwill related to consolidated businesses is included in intangible assets on the balance sheet while goodwill associated with the company’s equity investments (primarily Grupo Modelo) is included in investments in affiliated companies. Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually, with ongoing recoverability based on applicable operating unit performance, consideration of significant events or changes in the overall business environment and comparable market transactions. The impairment analysis for consolidated goodwill is performed at the reporting unit level using a two-step process. The first step is a comparison of the fair value of the business, determined using future cash flow analysis and/or comparable market transactions, to its recorded amount on the balance sheet. If the recorded amount exceeds the fair value, the second step quantifies any impairment write-down by comparing the current implied value of goodwill to the recorded goodwill balance. A review of goodwill completed in the fourth quarter of 2007 found no impairment. Goodwill related to equity investments is tested for impairment if events or circumstances indicate the entire investment could be impaired. Recoverability testing for equity investment goodwill is based on a combination of future cash flow analysis and consideration of pertinent business and economic factors. See Note 4 for additional information on changes in the balances of intangible assets.

COMPUTER SYSTEMS DEVELOPMENT COSTS

The company capitalizes computer systems development costs that meet established criteria, and amortizes those costs to expense on a straight-line basis over five years. Computer systems development costs not meeting the proper criteria for Capitalisation, including systems re-engineering costs, are expensed as incurred.

PLANT AND EQUIPMENT

Fixed assets are carried at original cost less accumulated depreciation, and include expenditures for new facilities and expenditures that increase the useful lives of existing facilities. The cost of routine maintenance, repairs and minor renewals is expensed as incurred. Depreciation expense is recognized using the straight-line method based on the following weighted-average useful lives: buildings, 25 years; production machinery and equipment, 15 years; furniture and fixtures, 10 years; and computer equipment, three years. When fixed assets are retired or sold, the net book value is eliminated and any gain or loss on disposition is recognized in cost of sales for operating assets and administrative expenses for corporate assets. The components of plant and equipment as of December 31 are summarized below (in millions).

 

     2007    2006

Land

   $301.5    $297.7

Buildings

   5,275.2    5,123.6

Machinery and equipment

   13,188.7    12,919.8

Construction in progress

   462.1    369.5
         

Plant and equipment, at cost

   19,227.5    18,710.6

Accumulated depreciation

   (10,394.0)    (9,794.5)
         

Plant and equipment, net

   $8,833.5    $8,916.1
         

 

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VALUATION OF SECURITIES

For investments accounted for under the cost basis, Anheuser-Busch applies FAS 115, “Accounting for Certain Investments in Debt and Equity Securities.” Under FAS 115, the company classifies its investments as “available for sale” and adjusts the carrying values of those securities to fair market value each period. Market valuation gains or losses are deferred in nonowner changes in shareholders equity and are not recognized in the income statement until the investment is sold. The only investment currently accounted for under FAS 115 is an immaterial investment in the common stock of Kirin Brewing Company, Ltd. of Japan. In 2005, deferred market valuations also included noncash changes in the value of convertible debt issued to the company by its strategic partner in China, Tsingtao Brewery. See Note 2 for additional discussion of the company’s investment in Tsingtao.

ISSUANCE OF STOCK BY EQUITY INVESTEES

The company has elected to treat issuances of common stock by equity investees as equity transactions per SEC Staff Accounting Bulletin No. 52, and therefore recognizes no gain or loss when shares are issued.

 

2.

International Equity Investments

GRUPO MODELO

Anheuser-Busch owns a 35.12% direct interest in Grupo Modelo, S.A.B. de C.V. (Modelo), Mexico’s largest brewer and producer of the Corona brand, and a 23.25% direct interest in Modelo’s operating subsidiary Diblo, S.A. de C.V. (Diblo). The company’s direct investments in Modelo and Diblo give Anheuser-Busch an effective (direct and indirect) 50.2% equity interest in Diblo. Anheuser-Busch holds nine of 19 positions on Modelo’s board of directors (with the Controlling Shareholders Trust holding the other 10 positions) and also has membership on the audit committee. Anheuser-Busch does not have voting or other effective control of either Diblo or Modelo and consequently accounts for its investments using the equity method. The total cost of the company’s investments was $1.6 billion. The carrying values of the Modelo investment were $3.6 billion and $3.4 billion, respectively, at December 31, 2007 and 2006. Included in the carrying amounts of the Modelo investment is goodwill of $540.1 million and $536.6 million, respectively. Changes in goodwill during 2007 and 2006 are primarily due to changes in exchange rates between the U.S. dollar and Mexican peso.

Dividends received from Grupo Modelo in 2007 totaled $403.1 million, compared to $240.0 million and $203.6 million in 2006 and 2005, respectively. Dividends are paid based on a free-cash-flow distribution formula in accordance with the Investment Agreement between the companies and are recorded as a reduction in the carrying value of the company’s investment. Cumulative unremitted earnings of Grupo Modelo totaled $2.1 billion at December 31, 2007.

Summary financial information for Grupo Modelo as of and for the three years ended December 31 is presented in the following table (in millions). The amounts represent 100% of Grupo Modelo’s consolidated operating results and financial position based on U.S. generally accepted accounting principles on a one-month lag basis, and include the impact of Anheuser-Busch’s purchase accounting adjustments.

 

     2007    2006    2005

Cash and marketable securities

   $1,932.2    $2,094.0    $1,640.5

Other current assets

   $1,181.2    $1,017.6    $933.3

Noncurrent assets

   $5,143.4    $4,538.5    $4,592.8

Current liabilities

   $678.9    $524.7    $407.1

Noncurrent liabilities

   $317.7    $345.9    $411.3

Net sales

   $5,321.3    $5,072.1    $4,399.0

Gross profit

   $2,683.0    $2,643.9    $2,315.1

Minority interest

   $3.5    $1.5    $1.3

Net income

   $1,276.7    $1,141.1    $966.8

 

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TSINGTAO

Since 2003, Anheuser-Busch has participated in a strategic alliance with Tsingtao Brewery Company, Ltd., one of the largest brewers in China and producer of the Tsingtao brand. Through March 2005, the company had invested $211 million in Tsingtao, in the form of a 9.9% equity stake in Tsingtao common shares and two convertible bonds. The 9.9% equity interest was accounted for under the cost method through April 2005, at which time the company converted its bonds into Tsingtao Series H common shares. The bond conversion increased Anheuser-Busch’s economic ownership in Tsingtao from 9.9% to 27%, and its voting stake from 9.9% to 20%. Local government authorities hold the proxy voting rights for the 7% difference between the company’s voting and economic stakes. The increased economic stake allowed Anheuser-Busch to nominate an additional director, giving the company two of 11 board seats and representation on related committees. Because of the increased share and voting ownership and board representation, Anheuser-Busch believes it has the ability to exercise significant influence and therefore began applying the equity method of accounting for Tsingtao in May 2005, on a one-month lag basis. The carrying values of the company’s Tsingtao investment were $276.8 million and $241.9 million, respectively, at December 31, 2007 and 2006. Dividends received from Tsingtao totaled $10.2 million in 2007 and $7.0 million in 2006.

In 2003, the company loaned Tsingtao $15 million for a term of five years at an annual interest rate of 1%. The loan provided Tsingtao with funding to reacquire minority interests in three of its brewery subsidiaries.

 

3.

Derivatives and Other Financial Instruments

DERIVATIVES

Under FAS 133, derivatives qualifying for deferral accounting are classified as fair value, cash flow or foreign currency denominated net investment hedges, depending on the nature of the underlying exposure. The company’s interest rate and foreign currency denominated hedges are either fair value or cash flow hedges, while commodity cost hedges are cash flow hedges. Commodity exposures are short, meaning the company must acquire additional quantities to meet its operating needs, and include aluminum, rice, corn and natural gas. The company’s primary foreign currency exposures result from transactions and investments denominated in Mexican pesos, Chinese yuan, Canadian dollars, British pounds sterling and euros. With the exception of foreign currency denominated capital expenditures, these exposures are long, meaning the company has or generates surplus quantities of these currencies.

Fair value hedges are accounted for by recognizing the changes in fair values for both the derivative and the underlying hedged exposure in earnings each period. For cash flow hedges, the portion of the derivative gain or loss that is effective in offsetting the change in cost or value of the underlying exposure is deferred in nonowner changes in shareholders equity, and later reclassified into earnings to match the impact of the underlying transaction when it occurs. Net investment hedges are accounted for in the foreign currency translation account in nonowner changes in shareholders equity. Regardless of classification, a hedge that is 100% effective will result in zero net earnings impact while the derivative is outstanding. To the extent that any hedge is not effective at offsetting cost or value changes in the underlying exposure, there could be a net earnings impact. Gains and losses from the ineffective portion of any hedge are recognized in the income statement immediately.

 

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Below are the notional transaction amounts and fair values for the company’s outstanding derivatives at December 31 (in millions, with brackets indicating a deferred loss position). Because the company hedges only with derivatives that have high correlation with the underlying transaction cost or value, changes in derivatives fair values and the underlying cost are expected to largely offset.

 

     2007    2006
     Notional
Amount
   Fair Value    Notional
Amount
   Fair Value

Foreign currency

           

Forwards

   $91.8    $1.0    $115.3    $2.7

Options

   282.2    3.7    306.5    4.4
                   

Total foreign currency

   374.0    4.7    421.8    7.1
                   

Interest rate

           

Swaps

   100.0    0.1    100.0    (1.3)
                   

Commodity price

           

Options

   1.5    0.1      

Swaps

   31.9    (4.7)    22.2    (4.1)

Futures and forwards

   68.9    11.1    111.9    8.4

Total commodity price

   102.3    6.5    134.1    4.3
                   

Total outstanding derivatives

   $576.3    $11.3    $655.9    $10.1
                   

The following table shows derivatives gains and losses deferred in nonowner changes in shareholders equity as of December 31 (in millions). The amounts shown for 2006 and 2005 were subsequently recognized in earnings as the hedged transactions took place, mostly in the next year. The gains and losses deferred as of December 31, 2007 are generally expected to be recognized in 2008 as the underlying transactions occur. However, the amounts ultimately recognized may differ, favorably or unfavorably, from those shown because some of the company’s derivative positions are not yet settled and therefore remain subject to ongoing market price fluctuations.

 

     2007    2006    2005

Deferred gains

   $5.6    $9.2    $2.6

Deferred losses

   (5.4)    (5.9)    (6.4)
              

Net deferred gains/(losses)

   $0.2    $3.3    $(3.8)
              

Following are derivative gains and losses recognized in earnings during the years shown (in millions). As noted, effective gains and losses had been deferred over the life of the transaction and recognized simultaneously with the impact of price or value changes in the underlying transactions. Ineffective gains and losses were recognized throughout the year when it was evident they did not precisely offset corresponding price or value changes.

 

     2007    2006    2005

Effective gains

        

Cash flow hedges

   $5.7    $1.5    $20.1

Fair value hedges

   7.6    5.6    0.5

Total effective gains

   13.3    7.1    20.6

Effective losses

        

Cash flow hedges

   (18.6)    (34.0)    (8.1)

Fair value hedges

   (6.1)    (24.8)    (6.0)

Total effective losses

   (24.7)    (58.8)    (14.1)

Net effective gains/(losses)

   $(11.4)    $(51.7)    $6.5
              

Net ineffective gains

   $9.2    $2.2    $0.2
              

 

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CONCENTRATION OF CREDIT RISK

The company does not have a material concentration of credit risk.

NONDERIVATIVE FINANCIAL INSTRUMENTS

Nonderivative financial instruments included in the balance sheet are cash, accounts receivable, accounts payable and long-term debt. Accounts receivable include allowances for doubtful accounts of $16.1 million, $17.6 million and $15.3 million at December 31, 2007, 2006 and 2005, respectively. The fair value of long-term debt, estimated based on future cash flows discounted at interest rates currently available to the company for debt with similar maturities and characteristics, was $9.3 billion and $7.7 billion at December 31, 2007 and 2006, respectively.

 

4.

Intangible Assets

The following table shows the activity in goodwill, beer distribution rights and trademarks during the three years ended December 31 (in millions). International beer distribution rights have a combined gross cost of $57.1 million and a remaining unamortized balance of $35.5 million at December 31, 2007. The company expects amortization expense of approximately $6.0 million per year related to international distribution rights over the next five years.

 

     Trademarks    Beer
Distribution
Rights
   Goodwill

Balance at Dec. 31, 2004

   $44.4    $206.9    $1,509.2

Domestic beer wholesaler disposition

      (5.6)   

Disposition of domestic beer wholesaler equity investment

      (20.9)   

Tsingtao investment

   97.9    11.6   

Harbin purchase accounting adjustments

         34.3

Amortization of international distribution rights

      (4.7)   

Foreign currency translation

   3.5    (1.7)    49.0
              

Balance at Dec. 31, 2005

   145.8    185.6    1,592.5

Harbin minority interest buyout

         20.5

Acquisition of Rolling Rock brands

   79.3    3.0   

Acquisition of Grolsch and Tiger import rights

      9.2   

Domestic beer wholesaler equity investment

      27.8   

Disposition of domestic beer wholesaler equity investment

      (14.8)   

Amortization of international distribution rights

      (5.6)   

Foreign currency translation

   4.6    3.3    1.4
              

Balance at Dec. 31, 2006

   229.7    208.5    1,614.4

Harbin minority interest buyout

         7.3

Acquisition of InBev brands import rights

      65.9   

Acquisition of Monster brands distribution rights

      5.3   

Acquisition of U.S. beer distribution rights

      59.8   

Amortization of international beer distribution rights

      (5.9)   

Foreign currency translation

   10.1    1.4    53.0
              

Balance at Dec. 31, 2007

   $239.8    $335.0    $1,674.7
              

 

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5.

Retirement Benefits

ADOPTION OF FAS 158

Effective with its December 31, 2006 financial statements, Anheuser-Busch adopted FAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.” FAS 158 focuses primarily on balance sheet reporting for the funded status of benefit plans and requires recognition of benefit liabilities for underfunded plans and benefit assets for overfunded plans, with offsetting impacts to nonowner changes in shareholders equity. Anheuser-Busch was in a net underfunded position for its pension and retiree health care plans and therefore recognized incremental retirement benefit liabilities on adoption. Additionally, the company reclassified its pension liability from other long-term liabilities to retirement benefits on the consolidated balance sheet.

FAS 158 also requires companies to measure benefit plan assets and liabilities as of the balance sheet date for financial reporting purposes, eliminating the current approach of using a measurement date up to 90 days prior to the balance sheet date. The effective date for this change is delayed until year-end 2008. The company currently uses an October 1 measurement date and will adopt a December 31 measurement date in 2008 as required. Adopting the new measurement date will require a one-time adjustment to retained earnings under the transition guidance in FAS 158. None of the changes prescribed by FAS 158 will impact the company’s results of operations or cash flows.

PENSION BENEFITS

The company sponsors pension plans for its employees. Net annual pension expense for single-employer defined benefit plans and total pension expense for the three years ended December 31 are presented in the following table (in millions). Contributions to multiemployer plans in which the company and its subsidiaries participate are determined in accordance with the provisions of negotiated labor contracts, based on employee hours or weeks worked. Pension expense recognized for these plans and for defined contribution plans equals cash contributions made by Anheuser-Busch. Effective November 30, 2006, the chairman of the board, the president and chief executive officer and certain other senior executives retired as executive officers of the company and received lump sum pension payments from the supplemental executive retirement plan. The total of the lump sum payouts represented a portion of the supplemental plan’s projected benefit obligation sufficient enough to constitute a plan settlement per FAS 88, “Employer’s Accounting for Settlements and Curtailments of Defined Benefit Pension Plans.” Because the retirements occurred after the company’s pension measurement date of October 1, and in accordance with FAS 88 settlement accounting, liabilities related to the supplemental plan were remeasured as of December 15, 2006 with the related deferred actuarial losses recognized in the first quarter 2007.

 

     2007    2006    2005

Service cost (benefits earned during the year)

   $97.8    $102.7    $94.2

Interest cost on projected benefit obligation

   178.4    170.0    168.3

Assumed return on plan assets

   (208.3)    (198.6)    (194.9)

Amortization of prior service cost

   20.1    21.9    22.0

Amortization of net actuarial losses

   65.2    90.9    66.8

FAS 88 settlement

   19.0      

Single-employer defined benefit plans

   172.2    186.9    156.4

Multiemployer plans

   16.7    16.2    16.2

Defined contribution plans

   21.0    20.1    19.1

Total pension expense

   $209.9    $223.2    $191.7

 

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The measurement date for the company’s pension accounting is October 1. The key actuarial assumptions used in determining the annual pension expense and funded status for single-employer defined benefit plans for the three years ended December 31 follow.

 

Annual expense

   2007    2006    2005

Discount rate

   6.0%    5.5%    6.0%

Long-term return on plan assets

   8.5%    8.5%    8.5%

Rate of compensation growth

   4.0%    4.0%    4.25%
              

Funded status

        

Discount rate

   6.4%    6.0%    5.5%
              

Rate of compensation growth

   4.0%    4.0%    4.0%
              

For informational purposes, following is a summary of the potential impact on 2007 annual pension expense of a hypothetical 1% change in actuarial assumptions (in millions). Brackets indicate annual pension expense would be reduced. Modification of these assumptions does not impact the company’s pension funding requirements.

 

Assumption

   2007 Rate    Impact of 1%
Increase
   Impact of 1%
Decrease

Long-term return on assets

   8.5%    $(26.3)    $26.3

Discount rate

   6.4%    $(47.1)    $54.5

Compensation growth rate

   4.0%    $20.9    $(18.5)

Pension assets or liabilities are recognized for the funded status of single-employer pension plans, based on a comparison of the projected benefit obligation (PBO) to plan assets for each plan. The following tables present changes in the PBO, changes in the fair value of plan assets and the combined funded status for all single-employer defined benefit plans for the two years ended December 31 (in millions).

 

     2007    2006

Beginning projected benefit obligation (PBO)

   $3,125.1    $3,189.9

Service cost

   97.8    102.7

Interest cost

   178.4    170.0

Plan amendments

   2.1    3.3

Actuarial gain

   (79.2)    (135.0)

Employee contributions

   0.4    0.4

Foreign currency translation

   1.2    8.5

Benefits paid

   (266.2)    (214.7)
         

Projected benefit obligation (PBO) at Oct. 1

   $3,059.6    $3,125.1
         

 

     2007    2006

Fair value of plan assets, beginning of year

   $2,659.3    $2,314.7

Actual return on plan assets

   373.6    238.2

Employer contributions

   99.6    235.9

Employee contributions

   0.4    0.4

Foreign currency translation

   0.8    5.5

Benefits paid

   (266.2)    (214.7)
         

Fair value of plan assets at Oct. 1

   2,867.5    2,580.0

Fourth quarter contributions

   7.8    79.3
         

Fair value of plan assets, end of year

   $2,875.3    $2,659.3
         

Funded status—PBO in excess of plan assets

   $184.3    $465.8
         

 

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The following shows pension assets and liabilities reported on the balance sheet at December 31, 2007 and 2006. The PBO is the actuarial net present value of all benefits related to employee service rendered to date, including assumptions of future annual compensation increases to the extent appropriate. The pension asset is classified as noncurrent on the balance sheet. Of the $253.5 million and $466.8 million total pension liabilities shown for 2007 and 2006, respectively, $9.7 million and $2.8 million are classified as current, with the remainder classified as noncurrent.

 

Plans with assets in excess of PBO (pension asset)

   2007    2006

Plan assets

   $785.5    $117.6

PBO

   (716.3)    (116.6)
         

Pension asset recognized

   $69.2    $1.0
         

 

Plans with PBO in excess of assets (pension liability)

   2007    2006

PBO

   $(2,343.3)    $(3,008.5)

Plan assets

   2,089.8    2,541.7
         

Pension liability recognized

   $(253.5)    $(466.8)
         

Following is information for the two years ended December 31 for certain plans where the accumulated benefit obligation (ABO) for single-employer plans exceeds plan assets (in millions). The ABO is the actuarial present value of benefits for services rendered to date, with no consideration of future compensation increases. The ABO for all plans totaled $2,809.0 million at December 31, 2007 and $2,865.5 million at December 31, 2006.

 

Plans with ABO in excess of assets

   2007    2006

ABO

   $(632.4)    $(2,748.9)

Plan assets at Oct. 1

   527.9    2,541.7
         

ABO in excess of plan assets

   $(104.5)    $(207.2)
         

Below are the components of deferred pension costs for the two years ended December 31 (in millions). Deferred pension costs are not recognized in periodic pension expense when incurred, but instead are accrued in nonowner changes in shareholders equity to be amortized into expense in subsequent periods. Unrecognized actuarial losses represent differences in actual versus assumed changes in the PBO and fair value of plan assets over time, primarily due to changes in assumed discount rates. Unrecognized prior service cost is the impact of changes in plan benefits applied retrospectively for employee service previously rendered. Deferring these costs has no impact on annual pension funding requirements. Deferred pension costs are amortized into annual pension expense over the average remaining assumed service period for active employees, which was approximately 10 years at the end of 2007. Actuarial losses and prior service costs expected to be amortized into net periodic pension expense in 2008 are $44 million and $17 million, respectively.

 

     2007    2006

Prior service cost

   $(95.2)    $(112.5)

Unrecognized actuarial losses

   (543.7)    (872.8)
         

Pretax deferred pension costs

   (638.9)    (985.3)

Deferred income taxes

   253.7    391.2
         

Deferred pension costs—domestic plans

   (385.2)    (594.1)

Deferred pension costs—equity investments

   (10.8)    (15.7)
         

Net pension costs deferred in nonowner changes in shareholders equity

   $(396.0)    $(609.8)
         

 

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Following are the changes in the components of pretax pension costs deferred in nonowner changes in shareholders equity during 2007 (in millions).

 

     2007

Deferred actuarial (gain) arising during the year

   $(244.5)

Amortization of previously deferred actuarial losses into net periodic benefits expense

   (65.2)

FAS 88 settlement

   (19.0)
    

Net (decrease) in deferred actuarial losses

   (328.7)
    

Deferred prior service cost arising during the year

   2.1

Amortization of previously deferred prior service (cost) into net periodic benefits expense

   (20.1)
    

Net (decrease) in deferred prior service cost

   (18.0)
    

Foreign currency translation

   0.3
    

Pretax (decrease) in nonowner changes in shareholders equity related to deferred pension costs

   $(346.4)
    

Prior to the adoption of FAS 158, recognition of an additional minimum pension liability (offset in nonowner changes in shareholders equity) was necessary whenever the ABO exceeded plan assets. Shown in the following table are the components of the company’s minimum pension liability at December 31, 2006, prior to adoption of FAS 158 (in millions).

 

     2006

Minimum pension liability—domestic plans

   $(695.9)

Minimum pension liability—equity investments

   (15.7)

Intangible asset—unrecognized prior service costs

   108.3

Deferred income taxes

   233.3
    

Deferred pension costs, pre-FAS 158

   $(370.0)
    

The following illustrates the impact on nonowner changes in shareholders equity of the first-time accrual for all deferred pension costs at December 31, 2006 in accordance with FAS 158 (in millions).

 

     2006

Reported in assets and liabilities

   Before
FAS 158
Adjustments
   FAS 158
Adjustments
   Ending
Balance

Pension asset

   $519.6    $(518.6)    $1.0

Pension liability

   $(695.9)    $229.1    $(466.8)

Reported in nonowner changes in shareholders equity

        

Deferred pension costs (domestic and equity)

   $(711.6)    $(289.4)    $(1,001.0)

Intangible asset—unrecognized prior service cost

   108.3    (108.3)   

Deferred income taxes

   233.3    157.9    391.2
              

Net deferred pension costs

   $(370.0)    $(239.8)    $(609.8)
              

PENSION PLAN ASSETS

Required funding for the company’s single-employer defined benefit pension plans is determined in accordance with federal guidelines set forth in the Employee Retirement Income Security Act (ERISA) and the Pension Protection Act (PPA). Funding for the company’s multiemployer and defined contribution plans is based on specific contractual requirements for each plan. The company plans to make required pension contributions for all plans totaling $70 million in 2008. Additional contributions to enhance the funded status of pension plans can be made at the company’s discretion, and discretionary pension funding was provided totaling $85 million in 2007 and $214 million in 2006. Projections indicated that Anheuser-Busch would have been required to

 

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contribute these amounts in future years, but the company chose to make the contributions early in order to enhance the funded status of the plans. Following is information regarding the allocation of the company’s pension plan assets as of December 31, 2007 and 2006 and target allocation for 2008.

 

Asset Category

   Percentage
of
Plan Assets
at

Dec. 31,
2006
   Percentage
of
Plan Assets
at

Dec. 31,
2007
   Target
Asset
Allocation
for 2008

Equity securities

   70%    68%    69%

Debt securities

   26%    27%    26%

Real estate

   4%    5%    5%
              

Total

   100%    100%    100%
              

Asset allocations are intended to achieve a total asset return target over the long term, with an acceptable level of risk in the shorter term. Risk is measured in terms of likely volatility of annual investment returns, pension expense and funding requirements. Expected returns, risk and correlation among asset classes are based on historical data and investment adviser input. The assumed rate of return on pension plan assets is consistent with Anheuser-Busch’s long-term investment return objective, which enables the company to provide competitive and secure employee retirement pension benefits. The company strives to balance expected long-term returns and short-term volatility of pension plan assets. Favorable or unfavorable differences between the assumed and actual returns on plan assets are generally recognized in periodic pension expense over the subsequent five years. The actual annual rate of return on plan assets net of investment manager fees was 14.8%, 10.5% and 13.7% for plan years ended September 30, 2007, 2006 and 2005, respectively.

The company assumes prudent levels of risk to meet overall pension investment goals. Risk levels are managed through formal and written investment guidelines. Portfolio risk is managed by having well-defined, long-term strategic asset allocation targets. The company avoids tactical asset allocation and market timing and has established disciplined rebalancing policies to ensure asset allocations remain close to targets. The company’s asset allocations are designed to provide broad market diversification, which reduces exposure to individual companies, industries and sectors of the market. Pension assets do not include any direct investment in Anheuser-Busch debt or equity securities. The use of derivatives is permitted where appropriate to achieve overall investment policy objectives, such as to hedge exposure to foreign currency denominated stocks or securitize cash in investment portfolios.

RETIREMENT HEALTH CARE AND INSURANCE BENEFITS

The company provides certain health care and life insurance benefits to eligible retired employees. Effective January 1, 2006, employee participants must have at least 10 years of continuous service after reaching age 48 to become eligible for benefits. Employees become eligible for full retiree health care benefits after achieving specific age and total years of service requirements, based on hire date.

Net periodic retirement benefits expense for company retiree health care and life insurance plans was comprised of the following for the three years ended December 31 (in millions).

 

     2007    2006    2005

Service cost

   $26.8    $24.3    $25.6

Interest cost on benefit obligation

   45.3    36.9    39.3

Amortization of prior service benefit

   (9.8)    (16.4)    (11.4)

Amortization of net actuarial loss

   26.1    20.2    14.1
              

Net periodic retirement health care and life insurance benefits expense

   $88.4    $65.0    $67.6
              

 

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The following table details the components of the company’s obligation for its single-employer defined benefit retirement health care and life insurance plans as of December 31 (in millions). As of December 31, 2007 and 2006, respectively, $69.6 million and $64.3 million of the company’s obligation was classified as current. Retirement health care and insurance benefits obligations are unfunded; therefore no assets are associated with the plans.

 

     2007    2006

Benefit obligation, beginning of year

   $791.8    $654.3

Service cost

   26.8    24.3

Interest cost

   45.3    36.9

Actuarial loss

   29.5    140.2

Plan amendments

   0.3   

Benefits paid

   (71.7)    (68.7)

Plan participants’ contributions

   2.6    2.4

Medicare Part D subsidy

   2.6    2.4
         

Benefit obligation, end of year

   $827.2    $791.8
         

Actuarial gains and losses (primarily due to changes in assumed discount rates and differences in assumed versus actual health care costs) and prior service costs or benefits are deferred on the balance sheet when incurred, for subsequent amortization into annual benefits expense over the remaining service life of participating employees, which was approximately 10 years at December 31, 2007. Shown below are the components of deferred retirement health care and life insurance costs for the two years ended December 31 (in millions). Deferred actuarial losses of $24.0 million and unrecognized prior service benefits of $9.8 million are expected to be amortized into net retirement benefits expense in 2008.

 

     2007    2006

Deferred actuarial losses

   $(377.4)    $(374.0)

Deferred prior service benefits

   78.5    88.6
         

Net deferred actuarial items

   (298.9)    (285.4)

Deferred income taxes

   118.6    113.2
         

Net health care and insurance costs deferred in nonowner changes in shareholders equity

   $(180.3)    $(172.2)
         

Following are the changes in the components of pretax retirement health care and insurance costs deferred in nonowner changes in shareholders equity during 2007 (in millions).

 

     2007

Deferred actuarial loss arising during the year

   $29.5

Amortization of previously deferred actuarial losses into net periodic benefits expense

   (26.1)
    

Net increase in deferred actuarial losses

   3.4
    

Deferred prior service cost arising during the year

   0.3

Amortization of previously deferred prior service credit into net periodic benefits expense

   9.8
    

Net increase in deferred prior service cost

   10.1
    

Pretax increase in nonowner changes in shareholders equity related to deferred health care and insurance costs

   $13.5
    

 

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The key actuarial assumptions used to determine net retirement benefits expense and the benefits obligation for the three years ended December 31 are provided in the following table. For actuarial purposes, the initial health care inflation rate is assumed to decline ratably to the future rate in 2014 and then remain constant thereafter. The measurement date for the company’s retiree health care accounting is December 31.

 

     2007    2006    2005

Discount rate

   6.3%    5.75%    5.5%

Initial health care inflation rate

   9.0%    8.1%    8.9%

Future health care inflation rate

   5.0%    5.0%    5.0%

For informational purposes, following is a summary of the potential impact on net periodic retirement benefits expense and the end of year benefits obligation of a hypothetical 1% change in the assumed health care inflation rate (in millions). Brackets indicate a reduction in expense or liability.

 

     1% Increase    1% Decrease

Net periodic retirement benefits expense

   $4.5    $(4.4)

Retirement benefits liability

   $50.5    $(48.0)

RETIREMENT BENEFITS PAYMENTS

Following are retirement benefits expected to be paid in future years, based on employee data and plan assumptions, as of December 31, 2007 (in millions).

 

     Pensions    Health
Care
and
Insurance

2008

   $172.9    $69.6

2009

   $188.6    $72.2

2010

   $203.3    $73.9

2011

   $220.0    $75.6

2012

   $242.0    $76.0

2014-2017

   $1,397.1    $402.1

EMPLOYEE STOCK PURCHASE AND SAVINGS PLANS

The company sponsors employee stock purchase and savings plans (401(k) plans), which are voluntary defined contribution plans in which most regular employees are eligible for participation. Under the 401(k) plans, the company makes matching cash contributions for up to 6% of employee pretax savings. The company’s matching contribution percentage is established annually based on a formula that considers both consolidated net income and total employee costs. Total 401(k) expense was $58.2 million, $60.7 million and $63.6 million for 2007, 2006 and 2005, respectively.

 

6.

Stock-Based Compensation

STOCK OPTIONS

Under the terms of the company’s stock option plans, officers, certain other employees and nonemployee directors may be granted options to purchase the company’s common stock at a price equal to the closing market price per the New York Stock Exchange Composite Tape on the date the options are granted. The company issues either new shares or treasury shares when options are exercised under employee stock compensation plans. Under the plans for the board of directors, shares are issued exclusively from treasury stock. The company’s stock option plans provide for accelerated exercisability on the occurrence of certain events relating to a change in control, merger, sale of substantially all company assets or complete liquidation of the company. At December 31, 2007, 2006 and 2005, a total of 137 million, 115 million and 121 million shares of common stock were designated for future issuance under existing stock option plans, respectively.

 

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The company’s stock options ratably vest over a three-year service period commencing immediately following grant of the award, and have a maximum life of 10 years. There are no performance-based vesting requirements associated with stock options. The company’s stock option plans provide for immediate vesting of all unvested options whenever an employee voluntarily leaves the company and has either completed at least 20 years of service or is at least age 60. For employees meeting these criteria, the accelerated vesting policy renders the requisite three-year service condition “nonsubstantive” under FAS No. 123R, “Shared-Based Payment,” and the company therefore fully expenses all options granted to individuals meeting either criterion as of the grant date. The company also identifies stock options granted to employees who do not yet, but will meet the separation-based vesting criteria prior to the end of the three-year vesting cycle, and recognizes expense over the substantive vesting period for that group of options. Stock options granted to employees not meeting the separation-based vesting criteria are expensed ratably over the three-year option vesting period. Due to the requirement to expense nonforfeitable options as of the grant date, the company recognized expense equal to 67%, 60% and 60% of the value related to its 2007, 2006 and 2005 awards, respectively, in the fourth quarter when the options were granted. For financial reporting purposes, stock compensation expense is included in cost of sales and marketing, distribution and administrative expenses, depending on where the recipient’s cash compensation is reported, and is classified as a corporate item for business segments reporting.

Nonemployee directors may elect to receive their annual retainer in shares of Anheuser-Busch common stock instead of cash. If all nonemployee directors eligible to own the company’s common stock elected to receive their 2008 annual retainer in shares, the total number of shares issued would be 21,494, based on the closing price for the company’s common stock at December 31, 2007.

Following is a summary of stock option activity and pricing for the years shown (options in millions).

 

     Options
Outstanding
   Wtd. Avg.
Exercise
Price
   Options
Exercisable
   Wtd. Avg.
Exercise
Price

Balance, Dec. 31, 2004

   91.8    $43.93    64.1    $40.92

Granted

   11.4    $43.83      

Exercised

   (5.9)    $25.48      

Canceled

   (0.8)    $49.38      
             

Balance, Dec. 31, 2005

   96.5    $45.01    71.5    $44.06

Granted

   9.5    $46.34      

Exercised

   (4.9)    $27.43      

Canceled

   (1.1)    $48.64      
             

Balance, Dec. 31, 2006

   100.0    $45.97    80.3    $45.89

Granted

   10.1    $51.86      

Exercised

   (9.3)    $35.71      

Canceled

   (0.3)    $48.52      
             

Balance, Dec. 31, 2007

   100.5    $47.49    81.1    $47.18
             

The fair values of options granted during the last three years follow (in millions, except per option).

 

     2007    2006    2005

Fair value of each option granted

   $10.73    $9.73    $8.81

Total number of options granted

   10.1    9.5    11.4
              

Total fair value of options granted

   $108.4    $92.4    $100.4
              

The fair value of stock options granted is estimated on the date of grant using a binomial (lattice method) option-pricing model. The binomial model is used for valuation because it accommodates several inputs in order to take into account multiple option exercise patterns as determined by the company’s actuaries, and essentially

 

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computes an overall value based on a weighting of various potential outcomes. The assumptions used in applying the binomial model follow. For illustrative purposes, the expected life, risk-free rate and fair value per option shown are weighted averages derived from historical exercise patterns. The volatility of Anheuser-Busch common stock is estimated by the company’s actuaries based on an analysis of both historical and current market volatilities.

 

     2007    2006    2005

Expected life of option

   6.3 yrs    6.3 yrs    5.5 yrs

Risk-free interest rate

   3.6%    4.6%    4.4%

Expected volatility of Anheuser-Busch stock

   22%    20%    21%

Expected dividend yield on Anheuser-Busch stock

   2.5%    2.5%    2.5%

The following tables provide additional information regarding options outstanding and options that were exercisable as of December 31, 2007 (options in millions).

 

     Options Outstanding    Options Exercisable

Range of Exercise Prices

   Number    Wtd. Avg.
Remaining
Life
   Wtd. Avg.
Exercise
Price
   Number    Wtd. Avg.
Remaining
Life
   Wtd. Avg.
Exercise
Price

$10–$29

   2.5    1 yr    $29.92    2.5    1 yr    $29.92

$30–$39

   5.3    1.9 yrs    $37.83    5.3    1.9 yrs    $37.83

$40–$49

   55.2    5.4 yrs    $46.52    45.7    4.8 yrs    $46.73

$50–$54

   37.5    6.8 yrs    $51.45    27.6    5.7 yrs    $51.29
                         

$10–$54

   100.5    5.6 yrs    $47.49    81.1    4.8 yrs    $47.18
                         

 

     Pretax In-the-Money Value

Range of Exercise Prices

   Number    Options
Outstanding
   Options
Exercisable

$10–$29

   2.5    $56.0    $56.0

$30–$39

   5.3    75.9    75.9

$40–$49

   55.2    363.9    260.9

$50–$54

   37.5    28.8    28.8
              

$10–$54

   100.5    $524.6    $421.6
              

The following illustrates the impact of stock compensation activity on certain earnings and cash flow amounts for the last three years (in millions, except per share). Unrecognized pretax stock compensation cost as of December 31, 2007 was $100 million, which is expected to be recognized over a weighted average life of approximately 1.5 years.

 

     2007    2006    2005

Pretax stock compensation expense

   $135.9    $122.9    $134.1

After-tax stock compensation expense

   $94.9    $87.1    $94.8

Diluted earnings per share impact

   $0.13    $0.11    $0.12

Cash proceeds from stock option exercises

   $282.6    $121.3    $135.4

In-the-money value of stock options exercised

   $148.9    $97.1    $122.4

Income tax benefit of stock options exercised

   $53.8    $34.3    $41.6

Income tax benefit in excess of associated deferred taxes

   $21.3    $22.6    $25.9

The income tax benefit the company receives from the exercise of stock options is based on the income realized by optionees upon exercise. For nonqualified stock options, the benefit is recognized as a reduction of current taxes payable and an increase in paid-in-capital with no impact on earnings. For incentive stock options, a tax benefit received that is less than or equal to the hypothetical benefit that would have been received by

 

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providing deferred tax assets when the options were expensed is recorded as a reduction of the current tax provision. Any benefit in excess of the hypothetical benefit adjusts paid-in-capital. Because the company’s employee stock options are not traded on an exchange, the fair value disclosed is required to be based on a theoretical option-pricing model. Employees can receive no value nor derive any benefit from holding stock options under these plans without an increase in the market price of Anheuser-Busch stock. Such an increase in stock price benefits all shareholders.

RESTRICTED STOCK

The company awards restricted stock to officers, certain other employees and nonemployee directors. Awards to employees are generally effective in January of each year pursuant to grants approved by the Board of Directors the previous November. Awards to nonemployee directors are granted and are effective in April. Shares of restricted stock either vest ratably over a three-year period (time-based shares), or vest in prespecified percentages at the end of three years based on total BUD shareholder return performance ranked against the S&P 500 companies over that period (performance-based shares). Performance-based restricted shares were granted to members of the company’s Strategy Committee in 2006 and 2007, with all other eligible employees and nonemployee directors receiving time-based shares. In accordance with FAS 123R, compensation expense is recognized over the three-year vesting or performance evaluation period, respectively, based on the grant date fair values. For time-based shares, fair value is equal to the closing market price per the New York Stock Exchange Composite Tape on the effective date of the award. As appropriate under FAS 123R, the fair value of the performance-based shares includes a discount from the grant date market price that reflects the risk of forfeiture due to the performance-based vesting criteria. Following is a summary of restricted stock activity and fair values for the years shown. An additional 236,220 shares of the time-based restricted shares shown below vested in January 2008.

 

     Performance
Based
Restricted
Stock
   Wtd. Avg.
Fair Value
   Time Based
Restricted
Stock
   Wtd. Avg.
Fair Value

Balance, Dec. 31, 2005

           

Granted

   168,557    $35.58    409,827    $43.39

Canceled

   (53,284)    $35.58    (17,199)    $43.39
                   

Balance, Dec. 31, 2006

   115,273    $35.38    392,628    $43.39

Granted

   127,586    $39.87    341,705    $49.27

Vested

         (131,672)    $43.39

Canceled

         (11,792)    $46.52
                   

Balance, Dec. 31, 2007

   242,859    $37.83    590,869    $46.73
                   

ADOPTION OF FAS 123R

Prior to 2006, Anheuser-Busch accounted for employee stock compensation in accordance with FAS 123, “Accounting for Stock-Based Compensation,” and elected to recognize no expense related to employee stock compensation, since options were always granted with an exercise price equal to the market price of the company’s stock on the effective date of grant. In December 2004, the Financial Accounting Standards Board issued a revised and renamed Standard regarding stock compensation—FAS 123R. The revised Standard, which was adopted by Anheuser-Busch in the first quarter of 2006, eliminates the disclosure-only election available under FAS 123 and requires recognition of compensation expense for stock options and all other forms of equity compensation, generally based on the fair value of the instruments on the effective date of grant. In order to enhance the comparability of all periods presented and provide the fullest understanding of the impact that expensing stock compensation has on the company’s results, Anheuser-Busch retrospectively applied the new Standard to prior period results.

 

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Following are amounts pertinent to operations and cash flows for 2005 as they were previously reported and after the retrospective adoption of FAS 123R (in millions, except per share). In connection with the adoption, the company adjusted deferred income taxes (offset in retained earnings) $50.6 million as of December 31, 2006 to eliminate deferred income taxes related to incentive stock options.

 

     2005
     Including
FAS 123R
   As Reported

Operating Results

     

Cost of sales

   $9,606.3    $9,579.5

Gross profit

   $5,429.4    $5,456.2

Marketing, distribution and administrative expenses

   $2,837.5    $2,730.2

Operating income

   $2,486.9    $2,621.0

Income before income taxes

   $2,057.4    $2,191.5

Provision for income taxes

   $811.1    $850.4

Net income

   $1,744.4    $1,839.2

Basic earnings per share

   $2.24    $2.37

Diluted earnings per share

   $2.23    $2.35

Cash Flows

     

Operating cash flow before the change in working capital

   $2,651.6    $2,677.5

Cash provided by operating activities

   $2,701.9    $2,727.8

Shares issued under stock plans

   $161.4    $135.5

Cash used for financing activities

   $1,615.8    $1,641.7

 

7.

Income Taxes

Following are the components of the provision for income taxes for the three years ended December 31 (in millions).

 

     2007    2006    2005

Current tax provision

        

Federal

   $853.6    $789.3    $712.0

State

   150.2    141.1    129.8

Foreign

   31.9    15.9    8.4
              

Total current provision

   1,035.7    946.3    850.2
              

Deferred tax provision/(benefit)

        

Federal

   (54.8)    (26.1)    (38.9)

State

   (12.0)    (10.5)    (12.7)

Foreign

   0.9    (9.2)    12.5
              

Total deferred benefit

   (65.9)    (45.8)    (39.1)
              

Total tax provision

   $969.8    $900.5    $811.1
              

The deferred income tax provision is a noncash expense or benefit resulting from temporary differences between financial reporting and income tax filing in the timing of certain income and expense items, and differences in the bases of assets and liabilities. For Anheuser-Busch, the primary temporary differences relate to depreciation on fixed assets, pension contributions and accrued U.S. taxes on equity income, net of applicable foreign tax credits.

The company’s deferred income tax liabilities and deferred income tax assets as of December 31, 2007 and 2006, are summarized by category in the following table (in millions). Deferred tax liabilities result primarily from income tax deductions being received prior to expense recognition for financial reporting purposes.

 

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Deferred tax assets relate primarily to expenses being recognized for financial reporting purposes that are not yet deductible for income tax purposes, and the recognition of underfunded pension liabilities. Deferred income taxes are not provided on undistributed earnings of consolidated foreign subsidiaries that are considered to be permanently reinvested outside the United States. Cumulative foreign earnings considered permanently reinvested totaled $235 million at both December 31, 2007 and 2006.

 

     2007    2006

Deferred income tax liabilities

     

Fixed assets

   $1,755.2    $1,789.1

Accrued net U.S. taxes on equity earnings

   241.5    210.6

Accelerated pension contributions

   177.4    234.6

Other

   251.3    217.4
         

Total deferred income tax liabilities

   2,425.4    2,451.7
         

Deferred income tax assets

     

Deferred retirement benefits

   591.9    713.8

Stock compensation

   315.7    309.3

Spare parts and production supplies

   78.9    79.4

Compensation-related obligations

   67.2    70.4

Other

   169.2    184.7

Valuation allowances

   (50.0)    (47.4)
         

Total deferred income tax assets (1)

   1,172.9    1,310.2
         

Net deferred income tax liabilities

   $1,252.5    $1,141.5
         

 

Note:

 

(1)

Deferred income tax assets of $62.1 million and $53.0 million, respectively, are classified in other current assets at December 31, 2007 and 2006.

Reconciliation between the U.S. federal statutory income tax rate and Anheuser-Busch’s effective income tax rate for the three years ended December 31 is presented below.

 

     2007    2006    2005

Federal statutory tax rate

   35.0%    35.0%    35.0%

State taxes, net of federal benefit

   3.4    3.7    3.7

Impact of foreign operations

   4.4    2.8    0.7

Other items, net

   (2.8)    (2.0)   
              

Effective income tax rate

   40.0%    39.5%    39.4%
              

 

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Effective January 1, 2007, Anheuser-Busch adopted FASB Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes.” To comply with the Interpretation, Anheuser-Busch initially reclassified $102.6 million of tax liabilities from current to noncurrent on the balance sheet and also separately recognized $53.1 million of deferred tax assets which had previously been netted against tax liabilities. The company made no adjustments to retained earnings related to adoption. The following table shows the activity related to unrecognized tax benefits during 2007 (in millions). It is anticipated that settlements in foreign tax jurisdictions will reduce gross unrecognized tax benefits by approximately $12.0 million in 2008, with net unrecognized tax benefits remaining unchanged due to the offset of U.S. foreign tax credits. Of the unrecognized tax benefits shown below, $51.5 million would reduce the company’s effective income tax rate if recognized.

 

     2007

Unrecognized tax benefits, beginning of year

   $96.8

Additions based on current year tax positions

   30.9

Additions for prior year tax positions

   9.7

Reductions for prior year tax positions

   (16.8)

Settlements with tax authorities

   (0.5)

Lapses in statutes of limitations

   (9.0)

Unrecognized tax benefits, end of year

   $111.1

The company’s policy is to accrue interest related to potential underpayment of income taxes within the provision for income taxes. Interest is computed on the difference between the company’s uncertain tax benefit positions under FIN 48 and the amount deducted or expected to be deducted in the company’s tax returns. The company had $8.1 million and $7.8 million of accrued interest related to uncertain tax positions at December 31, 2007 and 2006, respectively. Interest expense recognized in 2007 was not material.

The principal jurisdictions for which Anheuser-Busch files income tax returns are U.S. federal and the various city, state, and international locations where the company has operations. The company participates in the IRS Compliance Assurance Process program for the examination of its U.S. federal income tax returns, and examinations are substantially complete through 2006. City and state examinations are substantially complete through 2002. The status of international tax examinations varies by jurisdiction. The company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.

 

8.

Debt

The company uses SEC shelf registrations for efficiency and flexibility when issuing debt, and currently has registered debt available for issuance as a well-known seasoned issuer. Gains or losses on debt redemptions (either individually or in the aggregate) were not material for any year presented. The company has the ability and intent to refinance its entire debt portfolio on a long-term basis, including a $2 billion committed revolving credit agreement in support of its commercial paper borrowing, and therefore classifies all debt as long-term. Debt at the end of the year consisted of the following for the year shown (in millions).

 

     2007    2006

U.S. dollar notes due 2008 to 2023, interest rates from 4.375% to 7.5%

   $4,355.4    $3,540.7

U.S. dollar debentures due 2009 to 2043, interest rates from 5.75% to 9.0%

   3,150.0    2,900.0

Commercial paper, interest rates of 4.33% and 5.39%, respectively, at year-end

   1,038.2    658.4

Industrial revenue bonds due 2009 to 2047, interest rates from 4.55% to 7.4%

   283.9    269.4

Medium-term notes due 2010, interest rate 5.625%

   200.0    200.0

Chinese yuan-denominated bank loans due 2008 to 2011, interest rates from 5.51% to 7.29%

   21.9    32.0

Miscellaneous items

   111.1    72.4

Unamortized debt discounts

   (20.2)    (19.4)
         

Total debt

   $9,140.3    $7,653.5
         

 

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The company’s 5.49% fixed rate U.S. dollar notes ($100.0 million notional value) were swapped to a floating LIBOR-based rate when issued. The effective interest rates for this debt were 5.19% in 2007 and 4.98% in 2006, with year-end rates of 4.92% and 5.25%, respectively.

The weighted-average interest rates for commercial paper borrowings during 2007, 2006 and 2005 were 5.16%, 5.00% and 3.31%, respectively. The company has in place a single committed $2.0 billion revolving credit agreement that expires in October 2010 to support the company’s commercial paper program. The agreement is syndicated among 17 banks, has no financial covenants and does not designate a material adverse change as a default event or as an event prohibiting a borrowing. Credit rating triggers in the agreement pertain only to annual fees and the interest rate applicable to any potential borrowing, not to the availability of funds. There have been no borrowings under the agreement for any year shown. Annual fees for the agreement were $1.0 million in both 2007 and 2006 and $1.2 million in 2005. Commercial paper borrowings of up to $2.0 billion are classified as long-term, as they are supported on a long-term basis by the revolving credit agreement. Any commercial paper borrowings in excess of $2.0 billion will be classified as short-term.

In February 2008, the company entered into a new, $500 million, 364-day revolving credit agreement to provide an additional source of short-term support for its commercial paper program as necessary. The agreement is cancellable by Anheuser-Busch or its bank syndicate without penalty anytime prior to the end of its 364-day term. The company may also extend the term of outstanding borrowings for an additional year.

 

9.

Supplemental Cash Flow Information

Accounts payable include $120 million and $105 million of outstanding checks at December 31, 2007 and 2006, respectively. Supplemental cash flow information for the three years ended December 31 is presented in the following table (in millions).

 

     2007    2006    2005

Cash paid during the year

        

Interest, net of interest capitalized

   $454.8    $433.2    $436.0

Income taxes

   $936.6    $920.2    $814.7

Excise taxes

   $2,298.9    $2,252.3    $2,217.3

Change in working capital

        

(Increase)/Decrease in current assets:

        

Accounts receivable

   $(85.0)    $(38.8)    $14.7

Inventories

   (28.6)    (40.4)    35.8

Other current assets

   (17.4)    (4.6)    6.9

Increase/(Decrease) in current liabilities:

        

Accounts payable

   38.2    176.8    54.7

Accrued salaries, wages and benefits

   31.5    91.9    (40.5)

Accrued taxes

   (27.7)    (22.8)    3.8

Accrued interest

   12.2    0.5    (1.5)

Other current liabilities

   3.5    17.1    (2.9)

Derivatives fair value adjustment

   (7.4)    6.1    (9.8)

Working capital adjustment for acquisition/disposition

   (1.4)    3.0    (10.9)

Impact of FIN 48 adoption

   58.6      
              

Net (increase)/decrease in working capital

   $(23.5)    $188.8    $50.3
              

 

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10.

Accumulated Nonowner Changes In Shareholders Equity

The components of accumulated nonowner changes in shareholders equity, net of tax as of December 31 are summarized below (in millions).

 

     2007    2006

Foreign currency translation

   $(347.0)    $(452.2)

Deferred hedging gains/(losses)

   0.1    2.1

Deferred securities valuation gains

   1.0    1.3

Deferred retirement benefits costs (1)

   (576.3)    (782.0)

Accumulated nonowner changes in shareholders equity, net of tax

   $(922.2)    $(1,230.8)

 

Note:

 

(1)

Includes FAS 158 adoption impact of $412.0 million in 2006.

Deferred income tax liabilities of $0.1 million and $1.2 million have been recognized for deferred hedging gains as of December 31, 2007 and 2006, respectively. Deferred income tax liabilities of $0.6 million and $0.7 million have been provided for deferred securities valuation gains at the end of 2007 and 2006, respectively, while deferred tax assets of $372.3 million and $504.4 million, respectively, have been recognized for deferred benefits costs for the same periods. The majority of foreign currency translation losses relate to equity investments (primarily Grupo Modelo) whose operations are reported in Anheuser-Busch’s financial statements on a net-of-tax basis. See Note 3 for details of hedging gains and losses recognized in earnings which had previously been deferred in nonowner changes in shareholders equity.

 

11.

Common and Preferred Stock

COMMON STOCK ACTIVITY

Common stock activity for the three years ended December 31 is summarized below (shares in millions).

 

     2007    2006    2005

Common Stock

        

Beginning common stock

   1,473.7    1,468.6    1,463.0

Shares issued under stock plans

   8.8    5.1    5.6
              

Common stock

   1,482.5    1,473.7    1,468.6
              

Treasury Stock

        

Beginning treasury stock

   (707.6)    (690.9)    (678.0)

Treasury stock acquired

   (53.6)    (16.7)    (12.9)
              

Cumulative treasury stock

   (761.2)    (707.6)    (690.9)
              

Net common stock outstanding

   721.3    766.1    777.7
              

 

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EARNINGS PER SHARE OF COMMON STOCK

Basic earnings per share are computed by dividing net income by the weighted- average number of shares of common stock outstanding for the year. Diluted earnings per share are computed using the weighted-average number of common shares outstanding, plus an adjustment for the dilutive effect of unexercised in-the-money stock options. Reconciliation between basic and diluted weighted-average common shares outstanding for the three years ended December 31 follows (millions of shares). There were no adjustments to net income for any year shown for purposes of calculating earnings per share.

 

     2007    2006    2005

Basic weighted-average shares outstanding

   746.3    770.6    777.5

Weighted-average stock option shares

   10.8    6.4    5.1
              

Diluted weighted-average shares outstanding

   757.1    777.0    782.6
              

COMMON STOCK REPURCHASE

The board of directors has previously approved various resolutions authorizing the company to repurchase shares of its common stock. At December 31, 2007, approximately 61 million shares remained available for repurchase under Board authorizations. The most recent authorization, in December 2006, was approval of a multi-year repurchase of 100 million shares. Authorizations do not specify annual minimum or maximum repurchase amounts and do not expire until fully utilized. The company repurchased 53.6 million common shares in 2007, 16.7 million common shares in 2006 and 12.9 million shares in 2005, for $2.7 billion, $745.9 million and $620.4 million, respectively.

PREFERRED STOCK

At December 31, 2007 and 2006, 40 million shares of $1.00 par value preferred stock were authorized and unissued.

 

12.

Contingencies

The company and certain of its subsidiaries are involved in claims and legal proceedings in which monetary damages and other relief is sought. The company is vigorously contesting these claims; however resolution is not expected to occur quickly, and the ultimate outcome cannot presently be predicted. It is the opinion of management that the ultimate resolution of these claims, legal proceedings and other contingencies, either individually or in the aggregate, will not materially affect the company’s financial position, results of operations or liquidity.

 

13.

Business Segments

The company categorizes its operations into four business segments: U.S. beer, international beer, packaging and entertainment. The U.S. beer segment consists of the company’s U.S. beer manufacturing and import operations; company-owned beer wholesale operations; vertically integrated rice, barley and hops operations; and a short-haul transportation business. The international beer segment consists of the company’s overseas beer production and marketing operations, which include company-owned operations in China and the United Kingdom, administration of contract and license brewing arrangements and equity investments. Principal foreign markets for sale of the company’s products are China, the United Kingdom, Canada, Mexico and Ireland. The company attributes foreign sales based on the location of the distributor purchasing the product. The packaging segment is composed of the company’s aluminum beverage can and lid manufacturing, aluminum recycling, label printing and glass manufacturing operations. Cans and lids are produced for both the company’s U.S. beer operations and external customers in the U.S. soft drink industry. The entertainment segment consists of the company’s SeaWorld, Busch Gardens and other adventure park operations.

 

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Following is Anheuser-Busch business segment information for 2007, 2006 and 2005 (in millions). Intersegment sales are fully eliminated in consolidation. No single customer accounted for more than 10% of sales. General corporate expenses, including net interest expense and stock compensation expense, are not allocated to the operating segments. In 2007, the company changed management reporting responsibility for certain administrative and technology support costs from Corporate to the U.S. beer segment. 2006 and 2005 segment results have been updated to conform to this reporting convention. Corporate results for 2005 have been recast for the retrospective adoption of FAS 123R, which had no impact on the company’s four operating segments.

 

2007

   U.S. Beer    International
Beer
   Packaging    Entertainment    Corporate &
Eliminations (1)
   Consolidated

Income Statement Information

                 

Gross sales

   $14,158.7    1,351.7    2,632.8    1,272.7    (427.2)    $18,988.7

Net sales—intersegment

   $3.2    0.6    931.9       (935.7)    $—

Net sales—external

   $12,106.1    1,097.5    1,700.9    1,272.7    508.5    $16,685.7

Depreciation and amortization

   $749.0    49.8    68.9    103.0    25.5    $996.2

Income before income taxes

   $2,784.0    93.3    175.8    262.7    (893.1)    $2,422.7

Equity income, net of tax

   $2.3    660.1             $662.4

Net income

   $1,728.4    717.9    109.0    162.9    (602.9)    $2,115.3

Balance Sheet Information

                 

Total assets

   $8,142.0    5,880.8    772.6    1,548.3    811.3    $17,155.0

Equity method investments

   $93.9    3,925.6             $4,019.5

Goodwill

   $21.2    1,343.3    21.9    288.3       $1,674.7

Foreign-located fixed assets

   $4.5    544.4             $548.9

Capital expenditures

   $554.4    59.2    72.4    169.4    14.6    $870.0

 

2006

   U.S. Beer    International
Beer
   Packaging    Entertainment    Corporate &
Eliminations (1)
   Consolidated

Income Statement Information

                 

Gross sales

   $13,394.2    1,235.6    2,562.3    1,178.5    (412.8)    $17,957.8

Net sales—intersegment

   $2.8       896.4       (899.2)    $—

Net sales—external

   $11,388.2    998.2    1,665.9    1,178.5    486.3    $15,717.1

Depreciation and amortization

   $715.1    51.2    76.9    99.0    46.5    $988.7

Income before income taxes

   $2,709.2    76.7    145.0    232.8    (886.8)    $2,276.9

Equity income, net of tax

   $3.4    585.4             $588.8

Net income

   $1,683.1    633.0    89.9    144.3    (585.1)    $1,965.2

Balance Sheet Information

                 

Total assets

   $7,988.3    5,350.6    781.5    1,479.1    777.7    $16,377.2

Equity method investments

   $67.8    3,604.6             $3,672.4

Goodwill

   $21.2    1,283.0    21.9    288.3       $1,614.4

Foreign-located fixed assets

   $4.2    517.7             $521.9

Capital expenditures

   $516.7    36.9    55.9    157.6    45.4    $812.5

 

2005

   U.S. Beer    International
Beer
   Packaging    Entertainment    Corporate &
Eliminations (1)
   Consolidated

Income Statement Information

                 

Gross sales

   $13,067.6    1,165.5    2,383.6    1,084.8    (448.0)    $17,253.5

Net sales—intersegment

   $2.7       871.1       (873.8)    $—

Net sales—external

   $11,079.8    932.8    1,512.5    1,084.8    425.8    $15,035.7

Depreciation and amortization

   $706.6    52.1    83.3    93.9    43.1    $979.0

Income before income taxes

   $2,630.7    86.5    141.5    205.9    (1,007.2)    $2,057.4

Equity income, net of tax

   $—    498.1             $498.1

Net income

   $1,631.0    551.7    87.7    127.7    (653.7)    $1,744.4

Balance Sheet Information

                 

Total assets

   $8,019.0    5,049.2    764.4    1,400.8    1,321.6    $16,555.0

Equity method investments

   $—    3,373.1             $3,373.1

Goodwill

   $21.2    1,261.1    21.9    288.3       $1,592.5

Foreign-located fixed assets

   $3.7    510.3             $514.0

Capital expenditures

   $851.7    72.8    55.0    104.2    53.0    $1,136.7

 

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Note:

 

(1)

Corporate assets principally include cash, marketable securities, deferred charges and certain fixed assets. Eliminations impact only gross and intersegment sales. External net sales reflect the reporting of pass-through beer delivery costs reimbursed by independent wholesalers of $423.5 million, $370.9 million and $340.1 million in 2007, 2006 and 2005, respectively.

 

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Anheuser-Busch Companies, Inc. and Subsidiaries

Consolidated Balance Sheet (Unaudited)

 

     September 30,
2008
   December 31,
2007
     (in millions, except per share)

Assets

     

Current Assets:

     

Cash

   $314.3    $283.2

Accounts receivable

   1,131.1    805.2

Inventories

   782.6    723.5

Other current assets

   259.7    212.6
         

Total current assets

   2,487.7    2,024.5

Investments in affiliated companies

   4,290.6    4,019.5

Plant and equipment, net

   8,725.7    8,833.5

Intangible assets, including goodwill of $1,198.4 and $1,134.6

   1,644.7    1,547.9

Other assets

   711.0    729.6
         

Total Assets

   $17,859.7    $17,155.0
         

Liabilities and Shareholders Equity

     

Current Liabilities:

     

Accounts payable

   $1,721.7    $1,464.5

Accrued salaries, wages and benefits

   393.3    374.3

Accrued taxes

   458.3    106.2

Accrued interest

   118.3    136.4

Other current liabilities

   339.5    222.4
         

Total current liabilities

   3,031.1    2,303.8
         

Retirement benefits

   926.5    1,002.5
         

Debt

   7,688.6    9,140.3
         

Deferred income taxes

   1,339.9    1,314.6
         

Other long-term liabilities

   254.3    242.2
         

Shareholders Equity:

     

Common stock, $1.00 par value, authorized 1.6 billion shares

   1,498.4    1,482.5

Capital in excess of par value

   4,128.7    3,382.1

Retained earnings

   19,051.4    17,923.9

Treasury stock, at cost

   (19,430.1)    (18,714.7)

Accumulated nonowner changes in equity

   (629.1)    (922.2)
         

Total Shareholders Equity

   4,619.3    3,151.6
         

Commitments and contingencies

     
         

Total Liabilities and Shareholders Equity

   $17,859.7    $17,155.0
         

See the accompanying footnotes on pages AF-37 to AF-41.

 

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Anheuser-Busch Companies, Inc. and Subsidiaries

Consolidated Statement of Income (Unaudited)

 

     Third Quarter Ended
September 30,
   Nine Months Ended
September 30,
     2008    2007    2008    2007
     (in millions, except per share)

Gross sales

   $5,548.6    $5,237.4    $15,539.4    $14,769.2

Excise taxes

   (632.0)    (619.7)    (1,802.2)    (1,777.7)
                   

Net Sales

   4,916.6    4,617.7    13,737.2    12,991.5

Cost of sales

   (3,015.0)    (2,868.5)    (8,643.5)    (8,201.1)
                   

Gross profit

   1,901.6    1,749.2    5,093.7    4,790.4

Marketing, distribution and administrative expenses

   (810.9)    (777.4)    (2,310.4)    (2,199.3)

Corporate charges

   (166.2)       (166.2)   

Gain on sale of distribution rights

   15.3    26.5    15.3    26.5
                   

Operating income

   939.8    998.3    2,632.4    2,617.6

Interest expense

   (116.0)    (119.4)    (366.7)    (359.0)

Interest capitalized

   3.6    4.5    12.6    12.2

Interest income

   1.1    0.7    3.4    2.7

Other income/(expense), net

   0.8    (12.6)    (1.2)    (8.9)
                   

Income before income taxes

   829.3    871.5    2,280.5    2,264.6

Provision for income taxes

   (337.4)    (350.0)    (881.5)    (902.7)

Equity income, net of tax

   174.2    185.2    467.2    539.3
                   

Net income

   $666.1    $706.7    $1,866.2    $1,901.2
                   

Basic earnings per share

   $.92    $.96    $2.60    $2.53
                   

Diluted earnings per share

   $.90    $.95    $2.55    $2.49
                   

Weighted average shares outstanding

           

Basic

   722.4    738.6    717.7    752.3
                   

Diluted

   744.2    745.4    733.1    763.0
                   

See the accompanying footnotes on pages AF-37 to AF-41.

 

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Anheuser-Busch Companies, Inc. and Subsidiaries

Consolidated Statement of Cash Flows (Unaudited)

 

     Nine Months Ended
September 30,

In millions

   2008    2007
     (in millions)

Cash flow from operating activities:

     

Net income

   $1,866.2    $1,901.2

Adjustments to reconcile net income to cash provided by operating activities:

     

Depreciation and amortization

   756.3    748.3

Decrease in deferred income taxes

   (21.2)    (71.1)

Stock-based compensation expenses

   45.5    46.4

Undistributed earnings of affiliated companies

   (34.7)    (126.0)

Gain on sale of business

   (15.3)    (42.5)

Corporate Charges

   140.9   

Other, net

   (15.3)    79.6
         

Operating cash flow before the change in working capital

   2,722.4    2,535.9

Decrease/(Increase) in working capital

   120.4    (83.4)
         

Cash provided by operating activities

   2,842.8    2,452.5
         

Cash flow from investing activities:

     

Capital expenditures

   (572.4)    (564.8)

Acquisitions

   (93.1)    (84.7)

Proceeds from sale of business

   52.3    41.6
         

Cash used for investing activities

   (613.2)    (607.9)
         

Cash flow from financing activities:

     

Increase in debt

   5.0    906.4

Decrease in Debt

   (1,463.2)    (257.8)

Dividends paid to shareholders

   (738.7)    (691.8)

Acquisition of treasury stock

   (723.4)    (1,934.9)

Shares issued under stock plans

   721.8    215.8
         

Cash used for financing activities

   (2,198.5)    (1,762.3)
         

Net increase in cash during the period

   31.1    82.3

Cash, beginning of period

   283.2    219.2
         

Cash, end of period

   $314.3    $301.5
         

See the accompanying footnotes on pages AF-37 to AF-41.

 

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Anheuser-Busch Companies, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

 

1.

Unaudited Financial Statements

The unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles and applicable SEC guidelines pertaining to quarterly financial reporting, and include all adjustments necessary for a fair presentation. These statements should be read in combination with the consolidated financial statements and notes included in the company’s annual report on Form 10-K for the year ended December 31, 2007.

 

2.

Business Segments Information

Comparative business segments information for the third quarter and nine months ended September 30 (in millions):

 

Third Quarter

   U.S. Beer    International
Beer
   Packaging    Entertainment    Corporate
& Elims
   Consolidated

2008

                 

Gross sales

   $4,032.8    436.4    681.4    499.2    (101.2)    $5,548.6

Net sales:

                 

—Intersegment

   $0.9    0.1    250.7       (251.7)   

—External

   $3,465.6    370.6    430.7    499.2    150.5    $4,916.6

Income Before Income Taxes

   $897.0    46.2    67.7    169.7    (351.3)    $829.3

Equity income

   $(0.8)    175.0             $174.2

Net income

   $555.4    203.6    42.0    105.2    (240.1)    $666.1

2007

                 

Gross sales

   $3,803.7    380.0    698.6    479.5    (124.4)    $5,237.4

Net sales:

                 

—Intersegment

   $0.8    0.1    256.9       (257.8)   

—External

   $3,251.8    311.3    441.7    479.5    133.4    $4,617.7

Income Before Income Taxes

   $811.8    34.6    50.6    175.0    (200.5)    $871.5

Equity income

   $1.8    183.4             $185.2

Net income

   $505.1    204.9    31.4    108.5    (143.2)    $706.7

Nine months

   U.S. Beer    International
Beer
   Packaging    Entertainment    Corporate
& Elims
   Consolidated

2008

                 

Gross sales

   $11,500.6    1,176.8    2,052.6    1,137.2    (327.8)    $15,539.4

Net sales:

                 

—Intersegment

   $2.6    0.2    738.3       (741.1)   

—External

   $9,877.8    994.6    1,314.3    1,137.2    413.3    $13,737.2

Income Before Income Taxes

   $2,481.7    131.8    157.1    270.0    (760.1)    $2,280.5

Equity income

   $(1.9)    469.1             $467.2

Net income

   $1,536.8    550.8    97.4    167.4    (486.2)    $1,866.2

2007

                 

Gross sales

   $11,003.0    1,022.1    2,048.0    1,065.1    (369.0)    $14,769.2

Net sales:

                 

—Intersegment

   $2.5    0.6    738.6       (741.7)   

—External

   $9,406.0    838.3    1,309.4    1,065.1    372.7    $12,991.5

Income Before Income Taxes

   $2,361.5    83.7    150.1    270.4    (601.1)    $2,264.6

Equity income

   $3.4    535.9             $539.3

Net income

   $1,467.5    587.8    93.1    167.6    (414.8)    $1,901.2

 

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Table of Contents

In 2008, the company changed reporting responsibility for beer sales in the Caribbean region from U.S. Beer to International Beer and also reassigned certain administrative and technology support costs between Corporate and U.S. Beer. Segment results for 2007 have been updated to conform to the revised reporting conventions.

 

3.

Stock Compensation

Under the terms of the company’s stock option plans, officers, certain other employees and non-employee directors may be granted options to purchase the company’s common stock at a price equal to the New York Stock Exchange closing composite tape on the date the option is granted. Options generally vest over three years and have a maximum term of 10 years. At September 30, 2008, existing stock plans authorized issuance of 120 million shares of common stock. The company has the choice of issuing either new shares or from treasury stock when options are exercised under employee stock compensation plans. Under the plan for the board of directors, shares are issued from treasury stock.

For financial reporting purposes, stock compensation expense is included in cost of sales and marketing, distribution and administrative expenses, depending on where the recipient’s cash compensation is reported, and is classified as a corporate item for business segments reporting. Unrecognized stock compensation expense as of September 30, 2008 totaled $72 million, which is expected to be recognized in the fourth quarter.

The following table provides additional information regarding options outstanding and options that were exercisable as of September 30, 2008 (options and in-the-money values in millions).

 

Options Outstanding

   Options Exercisable

Range of Exercise Prices

   Number    Wtd. Avg.
Remaining
Life
   Wtd.
Avg.
Exercise
Price
   Pretax In-
The-Money
Value
   Number    Wtd.
Avg.
Exercise
price
   Pretax In-
The-
Money
Value

$20 – $29

   0.4    0.2 years    $29.97    $12.7    0.4    $29.69    $12.7

$30 – $39

   3.0    1.1 years    $37.84    81.6    3.0    $37.84    81.6

$40 – $49

   46.6    4.9 years    $46.50    1,019.4    37.4    $46.75    683.8

$50 – $54

   34.1    6.2 years    $51.46    331.3    24.5    $51.29    331.3
                            

$20 – $54

   84.1    5.3 years    $48.13    $1,445.0    65.3    $47.94    $1,109.4
                            

 

4.

Derivatives

Anheuser-Busch accounts for its derivatives in accordance with FAS 133, “Accounting for Derivatives and Other Hedging Instruments,” and therefore defers in accumulated non owner changes in shareholders equity the portion of cash flow hedging gains and losses that equal the change in cost of the underlying hedged transactions. As the underlying hedged transactions occur, the associated deferred hedging gains and losses are reclassified into earnings to match the change in cost of the transaction. For fair value hedges, the changes in value for both the derivative and the underlying hedged exposure are recognized in earnings each quarter.

Following are pretax gains and losses from derivatives which were recognized in earnings during the third quarter and first nine months (in millions). These gains and losses effectively offset changes in the cost or value of the company’s hedged exposures.

 

Third Quarter   Nine Months
2008   2007   2008   2007
Gains   Losses   Gains   Losses   Gains   Losses   Gains   Losses
$8.8   $3.3   $4.9   $7.8   $22.8   $9.2   $11.4   $17.2

 

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The company immediately recognizes in earnings any portion of derivative gains or losses that are not 100% effective at offsetting price changes in the underlying transactions. Anheuser-Busch recognized net pretax gains due to this hedge ineffectiveness of $9.8 million for the third quarter of 2008 compared to net ineffective pretax gains of $5.1 million for the third quarter of 2007. For the nine months, the company recognized net ineffective gains of $4.1 million in 2008 and $3.7 million in 2007.

 

5.

Earnings Per Share

Earnings per share are calculated by dividing net income by weighted-average common shares outstanding for the period. The difference between basic and diluted weighted-average common shares is the dilutive impact of unexercised in-the-money stock options. There were no adjustments to net income for any period shown for purposes of calculating earnings per share. Weighted-average common shares outstanding for the third quarter and nine months ended September 30 are shown below (millions of shares):

 

    Third Quarter   Nine Months
    2008   2007   2008   2007

Basic weighted average shares

  722.4   738.6   717.7   752.3

Diluted weighted average shares

  744.2   745.4   733.1   763.0

 

6.

Nonowner Changes in Shareholders Equity

The components of accumulated nonowner changes in shareholders equity, net of applicable taxes, as of September 30, 2008 and December 31, 2007 follow (in millions):

 

     September 30,
2008
   December 31,
2007

Foreign currency translation gains/(losses)

   $(57.2)    $(347.0)

Deferred hedging gains/(losses)

   (29.7)    0.1

Deferred securities valuation gains/(losses)

   0.5    1.0
         

Deferred retirement benefits costs

   (542.7)    (576.3)
         

Accumulated nonowner changes in shareholders equity

   $(629.1)    $(922.2)
         

Combined net income and nonowner changes in shareholders equity, net of applicable taxes, for the third quarter and nine months ended September 30 follows (in millions):

 

    Third Quarter   Nine Months
    2008   2007   2008   2007

Net income

  $666.1   $706.7   $1,866.2   $1,901.2

Net change in foreign currency translation

  6.2   (69.3)   289.8   36.6

Net change in deferred hedging gains/(losses)

  (59.4)   (3.7)   (29.8)   (7.6)

Net change in deferred securities valuation

  (0.8)   (0.5)   (0.5)   (0.7)

Net change in deferred retirement benefits costs

  11.3   15.5   33.6   46.5
               

Combined net income and nonowner changes in shareholders equity

  $623.4   $648.7   $2,159.3   $1,976.0
               

 

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Table of Contents
7.

Inventories

The company’s inventories were comprised of the following as of September 30, 2008 and December 31, 2007 (in millions).

 

     September 30,
2008
   December 31,
2007

Raw Materials

   $368.4    $365.4

Work-in-Process

   115.0    109.9

Finished Goods

   299.2    248.2
         

Total Inventories

   $782.6    $723.5
         

 

8.

Goodwill

Following is goodwill by business segment, as of September 30, 2008 and December 31, 2007 (in millions). Goodwill is included in either other assets or investment in affiliated companies, as appropriate, in the consolidated balance sheet. The change in goodwill during the nine months 2008 is primarily due to fluctuations in foreign currency exchange rates.

 

     September 30,
2008
   December 31,
2007

Domestic Beer

   $21.2    $21.2

International Beer

   1,464.8    1,343.3

Packaging

   15.8    21.9

Entertainment

   288.3    288.3
         

Total Goodwill

   $1,790.1    $1,674.7
         

 

9.

Pension and Postretirement Health Care Expense

The components of expense for pensions and postretirement health care benefits are shown below for the third quarter and nine months of 2008 and 2007 (in millions).

 

     Pensions
     Second Quarter    First Six Months
     2008    2007    2008    2007

Service cost (benefits earned during the period)

   $24.9    $25.0    $49.8    $50.1

Interest cost on benefit obligation

   47.6    44.7    95.1    89.3

Assumed return on plan assets

   (55.4)    (52.2)    (110.8)    (104.3)

Amortization of prior service cost and net actuarial losses

   15.0    21.4    30.0    42.7

FAS 88 Settlement

   2.7       2.7    19.0
                   
   34.8    38.9    66.8    96.8

Cash contributed to multi-employer plans

   4.4    4.0    8.5    8.2

Cash contributed to defined contribution plans

   5.2    5.1    10.6    10.3
                   
   $44.4    $48.0    $85.9    $115.3
                   
     Postretirement Health Care
     Second Quarter    First Six Months
     2008    2007    2008    2007

Service cost (benefits earned during the period)

   $6.7    $6.9    $14.2    $13.4

Interest cost on benefit obligation

   13.4    11.7    25.5    22.6

Amortization of prior service cost and net actuarial losses

   3.3    4.1    7.9    8.2
                   

Total expense

   $23.4    $22.7    $47.6    $44.2
                   

 

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10.

Equity Investment in Grupo Modelo

Summary financial information for Anheuser-Busch’s equity investee Grupo Modelo for the third quarter and nine months of 2008 and 2007 is presented below (in millions). The amounts shown represent 100% of Modelo’s consolidated operating results based on U.S. generally accepted accounting principles on a one-month lag basis, and include the impact of the company’s purchase accounting adjustments.

 

     Results of Operations
     Second Quarter    First Six Months
     2008    2007    2008    2007

Net sales

   $1,576.1    $1,438.1    $2,880.5    $2,596.1

Gross profit

   $794.9    $739.7    $1,458.5    $1,349.0

Minority interest expense

   $(4.4)    $(6.2)    $(5.2)    $(2.0)
                   

Net income

   $337.9    $380.1    $593.1    $692.8
                   

 

11.

Fair Value Measurements

Effective in the first quarter 2008, the company adopted FAS No. 157, “Fair Value Measurements.” FAS 157 requires specific disclosures regarding assets and liabilities measured at fair value, including the primary sources and potentially the inputs used to determine fair value, depending on the type and reliability of those inputs. Currently, the disclosures prescribed by FAS 157 apply only to financial assets and liabilities. Applicability to nonfinancial assets and liabilities is effective in the first quarter 2009.

The company accounts for financial derivatives at fair value and at September 30, 2008 had derivatives-based assets (amounts due from counterparties) of $32.2 million and liabilities (amounts due to counterparties) of $63.3 million reported on the balance sheet. The liabilities are reported in other current liabilities while $31 million of the assets are reported in other current assets with the remaining $1.2 million reported in other assets. The fair values of derivatives are determined either through quoted prices in active markets for exchange traded derivatives, which for Anheuser-Busch are primarily commodity derivatives, or through pricing from brokers who develop values based on inputs observable in active markets, such as interest rates and currency volatilities. The fair value of derivatives based on market quoted pricing is a net liability of $27.2 million as of September 30, 2008, while the fair value related to broker quoted pricing is a net liability of $3.9 million.

Anheuser-Busch also uses fair value measurements when it periodically evaluates the recoverability of goodwill and other intangible assets, and when preparing annual fair value disclosures regarding the company’s long-term debt portfolio.

 

12.

InBev Transaction

On July 13, 2008, InBev N.V./S.A. and Anheuser-Busch announced an agreement to combine the two companies, forming the world’s leading global brewer. Anheuser-Busch shareholders will receive $70 per share in cash, for an aggregate equity value of $52 billion. The combined company will be called Anheuser-Busch InBev. Both companies’ Boards of Directors have unanimously approved the transaction, which is also subject to shareholder and regulatory approvals. InBev shareholders approved the transaction in a vote on September 29, 2008 and Anheuser-Busch shareholders will meet November 12, 2008 to consider the transaction. The combination is expected to be complete by the end of 2008.

 

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13.

Corporate Charges

The $166.2 million corporate charges line-item in the income statement consists of $120 million for primarily investment banking, legal and accounting services associated with the InBev transaction and related matters, and $46.2 million in pension, retiree medical and severance costs associated with the enhanced retirement program previously announced by the company. Cash payments associated with the investment banking, legal and accounting services totaled $25.3 million in the third quarter with the remaining $95 million expected to be paid primarily in the fourth quarter.

In September 2008, in connection with its plans to reduce costs and improve efficiency, Anheuser-Busch announced the enhanced retirement program being offered to certain salaried employees. The program provides enhanced pension and retiree medical benefits to salaried employees who are at least 55 years old as of December 31, 2008. The company estimates that its salaried workforce will be reduced by 10% to 15% as a result of this program and attrition. Total pretax expense associated with this program is estimated in the range of $400 million to $525 million for enhanced retirement and severance costs, with associated cash expenditures of approximately $100 million to $140 million. The $46.2 million noncash pretax charge in the third quarter is the first expense recognized under this program. The remaining expense is expected to be recognized in the fourth quarter.

 

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Anheuser-Busch InBev Worldwide Inc.

Offer to Exchange up to

U.S.$1,500,000,000 3.000% Notes due 2012

U.S.$1,250,000,000 4.125% Notes due 2015

U.S.$2,250,000,000 5.375% Notes due 2020

U.S.$   500,000,000 6.375% Notes due 2040

which have been registered under the Securities Act of 1933

For Any and All Outstanding Unregistered

U.S.$1,500,000,000 3.000% Notes due 2012

U.S.$1,250,000,000 4.125% Notes due 2015

U.S.$2,250,000,000 5.375% Notes due 2020

U.S.$   500,000,000 6.375% Notes due 2040

 

 

PROSPECTUS

 

 

 

 

 


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PART II — INFORMATION NOT REQUIRED IN PROSPECTUS

 

ITEM 20.    INDEMNIFICATION OF DIRECTORS AND OFFICERS

Group Coverage and Policy

As the parent company of the AB InBev Group, Anheuser-Busch InBev SA/NV has undertaken to indemnify its directors, officers and employees against any and all expenses (including, without limitation, attorney’s fees and any expenses of establishing a right to indemnification by Anheuser-Busch InBev SA/NV), judgments, fines, penalties, settlements and other amounts actually and reasonably incurred by any such director, officer and employee in connection with the defence or settlement of any proceeding brought (i) by a third party or (ii) by Anheuser-Busch InBev SA/NV or by shareholders or other third parties in the right of Anheuser-Busch InBev SA/NV. Such indemnification applies if, with respect to the acts or omissions of such director, officer and employee, he acted in good faith and in a manner he reasonably believed to be in the best interests of Anheuser-Busch InBev SA/NV and, in the case of a criminal action or proceeding, he had no reason to believe that his conduct was unlawful. For these purposes, “proceeding” refers to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative to which a director, officer or employee is a party or is threatened to be made a party by reason of the fact that he or she was a director or an agent of Anheuser-Busch InBev SA/NV or of one of its subsidiaries or by reason of anything done or not done by him in such capacity.

No determination in any proceeding by judgment, order, settlement or conviction or otherwise shall, of itself, create a presumption that such director, officer or employee did not act in good faith and in a manner which he reasonably believed to be in the best interests of Anheuser-Busch InBev SA/NV and, with respect to any criminal action or proceeding, he had reasonable cause to believe that his or her conduct was unlawful.

In addition, we have a liability insurance policy that covers all past, present and future directors and officers of Anheuser-Busch InBev SA/BV and its subsidiaries, which are those entities in which it holds more than 50% of the voting rights, or of which it can individually, or under a shareholders’ agreement, appoint the board of directors. The insurance covers any damages such directors or officers are legally obliged to pay as a result of any claim against them. A “claim” for these purposes includes include all requests against the directors and officers, including (i) a civil proceeding; (ii) a criminal proceeding; (iii) a formal administrative or regulatory proceeding; and (iv) a written request by a third party.

Delaware Registrants

Section 102(b)(7) of the Delaware General Corporation Law (the “ DGCL ”) provides that a corporation may, in its certificate of incorporation, eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability: (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the DGCL (pertaining to certain prohibited acts including unlawful payment of dividends or unlawful purchase or redemption of the corporation’s capital stock); or (iv) for any transaction from which the director derived an improper personal benefit.

Section 145 of the DGCL provides, in relevant part, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such

 

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person’s conduct was unlawful. Eligibility for indemnification in relation to an action or suit by or in the right of the corporation may be further subject to the adjudication of the Delaware Court of Chancery or the court in which such action or suit was brought. The determination regarding whether the indemnitee has met the applicable standard of conduct generally must be made by a majority of disinterested directors (or a committee thereof) or the stockholders, although indemnification is mandatory where the indemnitee is successful on the merits or otherwise in defense of the action. A corporation may advance the expenses incurred by an officer or director in defending against any action, suit or proceeding upon receipt of an undertaking by or on behalf such person to repay such expenses if it is ultimately determined that such person is not entitled to indemnification. The statute also provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise.

Section 145(g) of the DGCL authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as such at any other enterprise against any liability asserted against and incurred by such person in such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person under the DGCL.

The Delaware General Corporation Law permits the indemnification by a Delaware corporation of its directors, officers, employees and other agents against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than derivative actions which are by or in the right of the corporation) if they acted in good faith in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard of care is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys’ fees) incurred in connection with defense or settlement of such an action and requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation.

Anheuser-Busch InBev Worldwide Inc.

Anheuser-Busch InBev Worldwide Inc.’s Certificate of Incorporation provides that each person who was or is made a party to, or is involved in, any action, suit or proceeding by reason of the fact that he or she is or was a director or officer of Anheuser-Busch InBev Worldwide Inc. (or was serving at the request of Anheuser-Busch InBev Worldwide Inc. as a director, officer, employee or agent for another entity) while serving in such capacity will be indemnified and held harmless by Anheuser-Busch InBev Worldwide Inc. to the full extent authorized or permitted by Delaware law. The Certificate of Incorporation also provides that Anheuser-Busch InBev Worldwide Inc. may purchase and maintain insurance and may also create a trust fund, grant a security interest and/or use other means (including establishing letters of credit, surety bonds and other similar arrangements), and may enter into contracts providing for indemnification, to ensure full payment of indemnifiable amounts.

Anheuser-Busch Companies, Inc.

Anheuser-Busch Companies, Inc.’s Certificate of Incorporation provides that each person who was or is made a party to, or is involved in, any action, suit or proceeding by reason of the fact that he or she is or was a director or officer of Anheuser-Busch Companies, Inc. (or was serving at the request of Anheuser-Busch Companies, Inc. as a director, officer, employee or agent for another entity) while serving in such capacity will be indemnified and held harmless by Anheuser-Busch Companies, Inc. to the full extent authorized or permitted by Delaware law. The Certificate of Incorporation also provides that Anheuser-Busch Companies, Inc. may purchase and maintain insurance and may also create a trust fund, grant a security interest and/or use other means (including establishing letters of credit, surety bonds and other similar arrangements), and may enter into contracts providing for indemnification, to ensure full payment of indemnifiable amounts.

 

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Belgian Registrants

Anheuser-Busch InBev SA/NV, InBev Belgium SA/NV and Cobrew NV/SA and incorporated under the laws of Belgium. Under Belgian law, the directors of a company may be liable for damages to the company in case of improper performance of their duties. The directors of Anheuser-Busch InBev SA/NV, InBev Belgium SA/NV and Cobrew NV/SA may be liable to us and to third parties for infringement of our articles of association or Belgian company law. Under certain circumstances, directors may be criminally liable.

Dutch Registrants

Each of InBev Nederland N.V., Interbrew International B.V. and Interbrew Central European Holding B.V. is incorporated under the laws of the Netherlands.

Under Dutch law the following applies with respect to the liability of members of the managing boards of, and possible indemnification by, InBev Nederland N.V., Interbrew International B.V., Interbrew Central European Holding B.V.

As a general rule, members of the managing board are not liable for obligations incurred by or on behalf of the company. Under certain circumstances, however, members of the managing board may be liable to the company for damages in the event of improper or negligent performance of their duties. They may be jointly and severally liable for damages to the company and to third parties for infringement of the articles of association or of certain provisions of the Dutch Civil Code. In certain circumstances, members of the managing board may also incur additional specific civil and criminal liabilities.

With respect to their liability with respect to the company the following applies. As a general rule, each director of the managing board must properly perform the duties assigned to him or her. Failure of a director in his duties does not automatically lead to liability. Liability is only incurred in case of severe reproach. The liability of directors towards the company can be waived by a discharge ( décharge ). Discharge is generally granted by the general meeting of shareholders. Such discharge in principle only releases directors from liability for actions which have been disclosed at or to the general meeting of shareholders or which appear from the annual accounts. A discharge does not affect the liability of the directors towards third parties or their liability to any trustee in bankruptcy.

With respect to directors’ liability with respect to third parties, there are various statutory grounds pursuant to which a director of the managing board may be held liable, such as specific liability in bankruptcy, liability for tax debts, social security contributions and contributions to mandatory pension funds, liability based on tort, liability for misrepresentation in annual accounts and personal liability of directors under Dutch criminal law (including economic offenses).

French Registrant

AB InBev France S.A.S. is incorporated under the laws of France. Under French law, provisions of status that limit the liability of directors are prohibited. French law also prohibits a company from indemnifying its directors against liability. However, if a director is sued by a third party and ultimately prevails in the litigation on all counts, but is nevertheless required to bear attorneys’ fees and costs, the company may reimburse those fees and costs pursuant to an indemnification arrangement with the director.

Luxembourg Registrants

AmBrew S.A. and BrandBrew S.A are both incorporated as société anonyme under the laws of Luexmbourg. Directors of a Luxembourg société anonyme may be held personally liable as directors for their acts in such capacity in the following circumstances: they can be held individually liable to the company, but not to third parties, for mismanagement; they can be held jointly and severally liable to the company and third parties

 

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for losses suffered resulting from a breach of the provisions of the law of 10 August 1915 on commercial companies, as amended, or of the articles of association of the company (unless they did not participate in the breach and brought the facts to the knowledge of the shareholders immediately upon becoming aware of such facts); and they can be held liable, to any other person, for tort as to damages only which are distinct from a damage that would be suffered by the company.

Luxembourg law does not contain provisions regarding the indemnification of directors and officers.

According to Luxembourg employment law, an employer may, under certain circumstances, be required to indemnify an employee against losses and expenses incurred by him in the execution of his duties under an employment agreement, unless the losses and expenses arise from the employee’s gross negligence or willful misconduct.

The articles of incorporation of AmBrew S.A. and BrandBrew S.A. both contain the following indemnification provision for directors and officers of these companies (the following is an unofficial translation):

“The Company shall indemnify any director or officer and their heirs, executors and administrators against expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of him being or having been director or officer of the Company, or, at the request of the Company, any other company of which the Company is a shareholder or creditor and by which he is not entitled to be indemnified, except in relation to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for gross negligence or misconduct. In the event of a settlement, indemnification shall be provided only in connection with such matters covered by the settlement as to which the Company is advised by its legal counsel that the person to be indemnified is not guilty of gross negligence or misconduct. The foregoing right of indemnification shall not exclude other rights to which the persons to be indemnified pursuant to the Articles of Incorporation may be entitled.”

From a Luxembourg law point of view, this only applies for civil liability (as opposed to criminal liability).

United Kingdom Registrant

Nimbuspath Limited is incorporated under the laws of the the UK.

UK law does not permit a company, directly or indirectly, to indemnify a director of the company against any liability that would otherwise attach to him or her in respect of negligence, default, breach of duty or breach of trust in relation to the company except (a) where the company purchases and maintains for a director of the company insurance against any such liability; (b) where the indemnity is a “qualifying third party indemnity provision” as defined in section 234 of the UK Companies Act 2006; or (c) where the indemnity is a “qualifying pension scheme indemnity provision” as defined in section 235 of the UK Companies Act 2006.

An indemnity is a qualifying third party indemnity provision only if it does not provide any indemnity against any liability incurred by the director (a) to the company or any associated company; (b) to pay a fine imposed in criminal proceedings or to pay a sum to a regulatory authority by way of penalty; (c) in defending any criminal proceedings in which he is convicted; (d) in defending any civil proceedings brought by the company, or an associated company, in which judgment is given against him or her; and (e) in an unsuccessful application for relief from liability under 661(3) or (4) or section 1157 of the UK Companies Act 2006.

An indemnity is a qualifying pension scheme indemnity provision only if it does not provide any indemnity against any liability incurred by the director who is a trustee of an occupational pension scheme (a) to pay a fine imposed in criminal proceedings or to pay a sum to a regulatory authority by way of penalty; and (b) in defending any criminal proceedings in which he is convicted.

 

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ITEM 21.    EXHIBITS

 

3.1    Consolidated Articles of Association of Anheuser-Busch InBev SA/NV, dated as of 22 October 2009 (incorporated by reference to Exhibit 99.1 to Form 6-K filed by Anheuser-Busch InBev SA/NV on 12 November 2009).*
3.2    Certificate of Incorporation of Anheuser-Busch InBev Worldwide Inc., dated as of 19 November 2008, Certificate of Correction to Certificate of Incorporation of Anheuser-Busch InBev Worldwide Inc., dated as of 20 November 2008, and Certificate of Amendment of Certificate of Incorporation of Anheuser-Busch InBev Worldwide Inc., dated as of 20 November 2008.
3.3    Bylaws of Anheuser-Busch InBev Worldwide Inc.
3.4    Coordinated Articles of Association of AmBrew S.A., dated as of 18 November 2008. *
3.5    Consolidated Articles of Association of Cobrew NV/SA, dated as of 13 June 2006. *
3.6    Articles of Association of InBev Belgium NV/SA, dated as of 19 September 2005. *
3.7    Articles of Incorporation of AB InBev France S.A.S., dated as of 29 June 2009. *
3.8    Articles of Association of InBev Nederland N.V., dated as of 2 January 2006. *
3.9    Articles of Association of Interbrew Central European Holding B.V., dated as of 29 May 1997. *
3.10    Articles of Association of Interbrew International B.V., dated as of 23 October 2000. *
3.11    Memorandum and Articles of Association of Nimbuspath Limited.
3.12    Coordinated Articles of Association of BrandBrew S.A., dated as of 25 July 2007. *
3.13    Certificate of Incorporation of Anheuser-Busch Companies, Inc.
3.14    Bylaws of Anheuser-Busch Companies, Inc., dated as of 22 July 2009.
4.1    Indenture, dated as of 16 October 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV, the Subsidiary Guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as Trustee.
4.2    First Supplemental Indenture, dated as of 16 October 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV, the Subsidiary Guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as Trustee.
4.3    Second Supplemental Indenture, dated as of 16 October 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV, the Subsidiary Guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as Trustee.
4.4    Third Supplemental Indenture, dated as of 16 October 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV, the Subsidiary Guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as Trustee.
4.5    Fourth Supplemental Indenture, dated as of 16 October 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV, the Subsidiary Guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as Trustee.
4.6    Fifth Supplemental Indenture, dated as of 27 November 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV, the Subsidiary Guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as Trustee.
4.7    Registration Rights Agreement, dated as of 16 October 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV, the Subsidiary Guarantors named therein, J.P. Morgan Securities Inc. Banc of America Securities LLC, and Deutsche Bank Securities Inc. as Initial Purchasers.

 

*

English-language translation.

 

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5.1    Opinion of Sullivan & Cromwell LLP, New York, NY, United States of America.
5.2    Opinion of Linklaters LLP, Paris, France.
5.3    Opinion of Linklaters LLP, Luxembourg, Luxembourg.
5.4    Opinion of Linklaters LLP, Brussels, Belgium with respect to Anheuser-Busch InBev SA/NV.
5.5    Opinion of Linklaters LLP, Brussels, Belgium with respect to InBev Belgium SA/NV and Cobrew NV/SA.
5.6    Opinion of Linklaters LLP, Amsterdam, The Netherlands.
5.7    Opinion of Linklaters LLP, London, England.
9.1    Amended and Restated Anheuser-Busch InBev Shareholders Agreement (formerly InBev Shareholders Agreement and Interbrew Shareholders Agreement), dated as of 9 September 2009, among BRC S.à.R.L, Eugenie Patri Sebastien S.A. (formerly Eugenie Patri Sebastien SCA), Stichting Anheuser-Busch InBev (formerly Stichting InBev and Stichting Interbrew) and Rayvax Societe d’Investissement NV/SA (incorporated by reference to Exhibit 3.1 to Form 20-F filed by Anheuser-Busch InBev SA/NV on 14 September 2009).
  9.2    Voting Agreement between Stichting Anheuser-Busch InBev, Fonds InBev-Baillet Latour SPRL and Fonds Voorzitter Verhelst SPRL, dated as of 17 October 2008, (incorporated by reference to Exhibit 3.2 to Form 20-F filed by Anheuser-Busch InBev SA/NV on 14 September 2009).
10.1    Agreement and Plan of Merger, among Anheuser-Busch Companies, Inc., InBev NV/SA and Pestalozzi Acquisition Corp., dated as of 13 July 2008, (incorporated by reference to Exhibit 2.1 to Form 8-K filed by Anheuser-Busch Companies, Inc. on 16 July 2008).
10.2    Senior Facilities Agreement for InBev SA/NV and InBev Worldwide S.à.R.L, dated 12 July 2008, and amendments thereto, dated as of 23 July 2008, 21 August 2008 and 3 September 2008 (incorporated by reference to Exhibit 4.2 to Form 20-F filed by Anheuser-Busch InBev SA/NV on 14 September 2009).**
12.1    Computation of Ratio of Earnings to Fixed Charges (included in “Selected Financial Information” in the prospectus forming part of this Form F-4).
21.1    List of significant subsidiaries (included in Note 37 to the AB InBev Group actual audited consolidated financial statements included in the prospectus forming part of this Form F-4).
23.1    Consent of KPMG — Bedrijfsrevisoren / Réviseurs d’Entreprises.
23.2    Consent of PricewaterhouseCoopers LLP.
23.3    Consent of Sullivan & Cromwell LLP, New York, NY, United States of America (included as part of its opinion filed as Exhibit 5.1 hereto).
23.4    Consent of Linklaters LLP, Paris, France (included as part of its opinion filed as Exhibit 5.2 hereto).
23.5    Consent of Linklaters LLP, Luxembourg, Luxembourg (included as part of its opinion filed as Exhibit 5.3 hereto).
23.6    Consent of Linklaters LLP, Brussels, Belgium (included as part of its opinion filed as Exhibit 5.4 hereto).
23.7    Consent of Linklaters LLP, Brussels, Belgium (included as part of its opinion filed as Exhibit 5.5 hereto).

 

**

Certain terms are omitted pursuant to a request for confidential treatment.

 

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23.8    Consent of Linklaters LLP, Amsterdam, The Netherlands (included as part of its opinion filed as Exhibit 5.6 hereto).
23.9    Consent of Linklaters LLP, London, England (included as part of its opinion filed as Exhibit 5.7 hereto).
24.1    Power of Attorney of Certain Directors and Officers of Anheuser-Busch InBev Worldwide Inc.
24.2    Power of Attorney of Certain Directors and Officers of Anheuser-Busch InBev SA/NV.
24.3    Power of Attorney of Certain Directors of InBev Belgium SA/NV.
24.4    Power of Attorney of Certain Directors of BrandBrew S.A.
24.5    Power of Attorney of Certain Directors of Cobrew NV/SA.
24.6    Power of Attorney of Certain Directors and Officers of InBev Nederland N.V.
24.7    Power of Attorney of Certain Directors and Officers of AB InBev France S.A.S.
24.8    Power of Attorney of Certain Directors of Interbrew International B.V.
24.9    Power of Attorney of Certain Directors of Nimbuspath Limited.
24.10    Power of Attorney of Certain Directors of AmBrew S.A.
24.11    Power of Attorney of Certain Directors and Officers of Anheuser-Busch Companies, Inc.
24.12    Power of Attorney of Authorized Representative in the United States for Anheuser-Busch InBev SA/NV, InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited and AmBrew S.A.
25.1    Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York Mellon Trust Company, N.A., as Trustee with respect to Exhibits 4.1 through 4.6 (filed herewith)
99.1    Form of Letter of Transmittal.
99.2    Form of Letter to DTC Participants.
99.3    Form of Letter to Clients.
99.4    Form of Instruction to Registered Holder from Beneficial Owner.
99.5    Form of Exchange Agent Agreement.

 

ITEM 22.    UNDERTAKINGS

The undersigned Registrants hereby undertake:

 

  (a)(1)to

file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

  (i)

to include any prospectus required by Section 10(a)(3) of the Securities Act;

 

  (ii)

to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

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  (iii)

to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

  (4)

That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

  (i)

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

  (ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

  (iii)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

  (iv)

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(c) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

ANHEUSER-BUSCH INBEV SA/NV

 

By:

 

/s/    Benoit Loore        

 

Name:

 

Benoit Loore

 

Title:

 

Vice-President, Legal Corporate and Compliance

   

Anheuser-Busch InBev SA/NV

By:

 

/s/    Liesbeth Hellemans        

  Name:   Liesbeth Hellemans
  Title:   Senior Legal Counsel, Corporate Finance and Governance
    Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

       

Title(s)

*

Carlos Brito

   

Chief Executive Officer (principal executive officer)

*

Felipe Dutra

   

Chief Financial Officer (principal financial officer and principal accounting officer)

*

Jean-Luc Dehaene

   

Member of the Board of Directors

*

Stéfan Descheemaeker

   

Member of the Board of Directors

*

Peter Harf

   

Member of the Board of Directors

*

Marcel Hermann Telles

   

Member of the Board of Directors

*

Jorge Paulo Lemann

   

Member of the Board of Directors

 

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Signature

       

Title(s)

*

Grégoire de Spoelberch

   

Member of the Board of Directors

*

Kees J. Storm

    Member of the Board of Directors

*

Roberto Moses Thompson Motta

   

Member of the Board of Directors

*

Alexandre Van Damme

   

Member of the Board of Directors

*

Carlos Alberto da Veiga Sicupira

   

Member of the Board of Directors

*

Mark Winkelman

   

Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

Attorney-in-Fact

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of Anheuser-Busch InBev SA/NV, in Leuven, Belgium, on the 3rd day of December, 2009.

 

ANHEUSER-BUSCH INBEV SA/NV

(Authorized Representative)

 

By:

 

*

 

Name:

 

John Blood

 

Title:

 

Vice-President, Legal

   

Anheuser-Busch InBev SA/NV

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

 

By:

 

/s/    Benoit Loore        

 

Name:

 

Benoit Loore

 

Title:

  Vice-President, Legal Corporate and Compliance
   

Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

  

Title(s)

*

David A Peacock

  

President and Chief Executive Officer (principal executive officer)

and Chairman of the Board of Directors

*

David Almeida

   Vice-President, Finance (principal financial officer)

*

Larry D. Baumann

   Vice-President, Controller (principal accounting officer)

*

Luiz Fernando Edmond

   Member of the Board of Directors

*

Gary L. Rutledge

   Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

  Benoit Loore
  Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

AMBREW S.A.

 

By:

 

/s/    Benoit Loore        

 

Name:

 

Benoit Loore

 

Title:

  Vice-President, Legal Corporate and Compliance
   

Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

  

Title(s)

*

Gert Bert Maria Magis

   Member of the Board of Directors

*

Jean-Louis Van de Perre

   Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of Ambrew S.A., in Leuven, Belgium, on the 3rd day of December, 2009.

 

AMBREW S.A.

(Authorized Representative)

By:

 

*

 

Name:

 

John Blood

 

Title:

  Vice-President, Legal
Anheuser-Busch InBev SA/NV

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

COBREW NV/SA

By:

 

/s/    Benoit Loore        

 

Name:

  Benoit Loore
 

Title:

  Vice-President, Legal Corporate and Compliance
    Anheuser-Busch InBev SA/NV

By:

 

/s/    Liesbeth Hellemans        

 

Name:

  Liesbeth Hellemans
 

Title:

  Senior Legal Counsel, Corporate Finance and Governance
    Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

  

Title(s)

*

Gert Boulangé

   Member of the Board of Directors

*

Peter Suy

   Member of the Board of Directors

*

Jo Van Biesbroeck

   Member of the Board of Directors

*

Jean-Louis Van de Perre

   Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

  Benoit Loore
  Attorney-in-Fact

 

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Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of Cobrew SA/NV, in Leuven, Belgium, on the 3rd day of December, 2009.

 

COBREW NV/SA

(Authorized Representative)

By:

 

*

 

Name:

  John Blood
 

Title:

  Vice-President, Legal
    Anheuser-Busch InBev SA/NV
*By:  

/s/    Benoit Loore        

  Benoit Loore
  Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

INBEV BELGIUM NV/SA

 

By:

 

/s/    Erlend Van Vreckem        

 

Name:

  Erlend Van Vreckem
 

Title:

  Legal Director, Benelux
    InBev Belgium NV/SA

By:

 

/s/    Vincent Borreman        

 

Name:

  Vincent Borreman
 

Title:

  Senior Legal Counsel
    InBev Belgium NV/SA

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

     

Title(s)

*

Eric Lauwers

   

Chairman of the Board of Directors

*

Jan Craps

   

Member of the Board of Directors

*

Manisha Thakker

   

Member of the Board of Directors

/s/    Erlend Van Vreckem        

Erlend Van Vreckem

   

Member of the Board of Directors

 

*By:  

/s/    Benoit Loore        

  Benoit Loore
 

Attorney-in-Fact

 

II-15


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Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of InBev Belgium SA/NV, in Leuven, Belgium, on the 3rd day of December, 2009.

 

INBEV BELGIUM NV/SA

(Authorized Representative)

By:

 

*

 

Name:

  John Blood
 

Title:

  Vice-President, Legal
    Anheuser-Busch InBev SA/NV
*By:  

/s/    Benoit Loore        

  Benoit Loore
  Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Lille, France, on the 3rd day of December, 2009.

 

AB INBEV FRANCE S.A.S.

By:

 

/s/    Emilie Ruyant        

 

Name:

 

Emilie Ruyant

 

Title:

 

Legal Director

AB InBev France S.A.S.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

  

Title(s)

*

Christian Cools

  

President (principal executive officer) and

Member of the Board of Directors

*

Nicolas Bonnel

   Member of the Board of Directors

/s/    Emilie Ruyant        

Emilie Ruyant

   Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

  Benoit Loore
  Attorney-in-Fact

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of AB InBev France S.A.S., in Leuven, Belgium, on the 3rd day of December, 2009.

 

AB INBEV FRANCE S.A.S.

(Authorized Representative)

By:

 

*

 

Name:

 

John Blood

 

Title:

  Vice-President, Legal
Anheuser-Busch InBev SA/NV

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

INBEV NEDERLAND N.V.

By:

 

/s/    Benoit Loore        

 

Name:

  Benoit Loore
 

Title:

  Vice-President, Legal Corporate and
    Compliance
    Anheuser-Busch InBev SA/NV

By:

 

/s/    Liesbeth Hellemans        

 

Name:

  Liesbeth Hellemans
 

Title:

  Senior Legal Counsel, Corporate Finance and Governance
    Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

  

Title(s)

*

Eric Lauwers

  

General Manager (principal executive officer) and

Chairman of the Board of Directors

*

Koen Van Loock

  

Finance Director (principal financial officer) and

Member of the Board of Directors

*

Remco Boerefijn

   Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

  Benoit Loore
  Attorney-in-Fact

 

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Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of InBev Nederland N.V., in Leuven, Belgium, on the 3rd day of December, 2009.

 

INBEV NEDERLAND N.V.

(Authorized Representative)

By:  

*

 

Name:

  John Blood
 

Title:

  Vice-President, Legal
    Anheuser-Busch InBev SA/NV
*By:  

/s/    Benoit Loore        

  Benoit Loore
  Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

INTERBREW CENTRAL EUROPEAN HOLDING B.V.

By:

 

/s/    Benoit Loore        

 

Name:

 

Benoit Loore

 

Title:

  Vice-President, Legal Corporate and Compliance
Anheuser-Busch InBev SA/NV

By:

 

/s/    Liesbeth Hellemans        

 

Name:

 

Liesbeth Hellemans

 

Title:

  Senior Legal Counsel, Corporate Finance and Governance
Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

  

Title(s)

Interbrew International B.V.    Sole Director

By:

 

/s/    Benoit Loore        

  
  Benoit Loore   

By:

 

/s/    Liesbeth Hellemans        

  
  Liesbeth Hellemans   

 

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Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of Interbrew Central European Holding B.V., in Leuven, Belgium, on the 3rd day of December, 2009.

 

INTERBREW CENTRAL EUROPEAN HOLDING B.V.

(Authorized Representative)

By:

 

*

 

Name:

 

John Blood

 

Title:

  Vice-President, Legal
Anheuser-Busch InBev SA/NV

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

INTERBREW INTERNATIONAL B.V.

By:

 

/s/    Benoit Loore        

 

Name:

 

Benoit Loore

 

Title:

  Vice-President, Legal Corporate and Compliance
Anheuser-Busch InBev SA/NV

By:

 

/s/    Liesbeth Hellemans        

 

Name:

 

Liesbeth Hellemans

 

Title:

  Senior Legal Counsel, Corporate Finance and Governance
Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

                                                             Title(s)

*

Gert Boulangé

  

Member of the Board of Directors

*

Johannes Henricus Maria van Erve

  

Member of the Board of Directors

*

Jeroen Heerkens

  

Member of the Board of Directors

*

Jolette Ida Claire Wiersema

  

Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

II-22


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Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of Interbrew International B.V., in Leuven, Belgium, on the 3rd day of December, 2009.

 

INTERBREW INTERNATIONAL B.V.

(Authorized Representative)

By:

 

*

 

Name:

 

John Blood

 

Title:

  Vice-President, Legal
Anheuser-Busch InBev SA/NV

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

NIMBUSPATH LIMITED
By:  

/s/    Claude Bahoshy        

 

Name:

 

Claude Bahoshy

 

Title:

 

Member of the Board of Directors

Nimbuspath Limited

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

                                                             Title(s)

/s/    Claude Bahoshy        

Claude Bahoshy

  

Member of the Board of Directors

*

Rosanna Longobardi

  

Member of the Board of Directors

*

Stuart MacFarlane

  

Member of the Board of Directors

*

Bhavesh Mistry

  

Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of Nimbuspath Limited, in Leuven, Belgium, on the 3rd day of December, 2009.

 

NIMBUSPATH LIMITED

(Authorized Representative)

By:

 

*

 

Name:

 

John Blood

 

Title:

  Vice-President, Legal
Anheuser-Busch InBev SA/NV

 

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

BRANDBREW S.A.

By:

 

/s/    Benoit Loore        

 

Name:

 

Benoit Loore

 

Title:

  Vice-President, Legal Corporate and Compliance
Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

                                                             Title(s)

*

Gert Magis

  

Member of the Board of Directors

*

Jean-Louis Van de Perre

  

Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in his capacity as the duly authorized representative of Brandbrew S.A., in Leuven, Belgium, on the 3rd day of December, 2009.

 

BRANDBREW S.A.

(Authorized Representative)

By:

 

*

 

Name:

 

John Blood

 

Title:

  Vice-President, Legal
Anheuser-Busch InBev SA/NV

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leuven, Belgium, on the 3rd day of December, 2009.

 

ANHEUSER-BUSCH COMPANIES, INC.

By:

 

/s/    Benoit Loore        

 

Name:

 

Benoit Loore

 

Title:

  Vice-President, Legal Corporate and Compliance
Anheuser-Busch InBev SA/NV

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 3rd day of December, 2009.

 

Signature

  

Title(s)

*

David A Peacock

  

President, Chief Executive Officer (principal executive officer) and Chairman of the Board of Directors

*

David Almeida

  

Vice-President, Finance (principal financial officer)

*

Larry D. Baumann

  

Vice-President, Controller (principal accounting officer)

*

Luiz Fernando Edmond

  

Member of the Board of Directors

*

Gary L. Rutledge

  

Member of the Board of Directors

 

*By:

 

/s/    Benoit Loore        

 

Benoit Loore

 

Attorney-in-Fact

 

II-27

EXHIBIT 3.2

CERTIFICATE OF INCORPORATION

OF

INBEV WORLDWIDE INC.

InBev Worldwide S.à r.l., a “société a responsabilité limitée” formed on July 9, 2008 and existing under the laws of Luxembourg, is being domesticated as a corporation in the State of Delaware in accordance with the provisions of Section 388 of the Delaware General Corporation Law. This Certificate of Incorporation (“Certificate”) has been approved in the manner provided for by the documents governing the internal affairs of InBev Worldwide S.à r.l. and the conduct of its business and by applicable law governing InBev Worldwide S.à r.l.

FIRST. The name of the corporation is InBev Worldwide Inc. (the “Corporation”).

SECOND. The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.

THIRD. The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.

FOURTH. The total number of shares which the Corporation shall have authority to issue is 2,620,000,033 shares of Common Stock, and the par value of each of such shares is $1.00.

FIFTH. The Board of Directors of the Corporation shall have the power, without the assent or vote of the stockholders, to make by-laws for the Corporation, and to amend, alter or repeal the same.

SIXTH. The Corporation reserves the right to amend, alter, change or repeal any provisions contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by the statutes of the State of Delaware and this Certificate of Incorporation, and all rights herein conferred on officers, directors and stockholders are expressly to this reservation.

SEVENTH. Elections of directors need not be by written ballot except and to the extent provided in the by-laws of the Corporation.

EIGHTH. The number of directors of the Corporation shall be fixed by, or in the manner provided in, the by-laws of the Corporation.

NINTH. Any action required by law to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without


prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

TENTH. The Corporation shall indemnify to the full extent authorized or permitted by law any person made, or threatened to be made, a party to any action or proceeding (whether civil or criminal or otherwise) by reason of the fact that he, his testator or intestate, is or was a director or officer of the Corporation or by reason of the fact that such director or officer, at the request of the Corporation, is or was serving any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in any capacity. Nothing contained herein shall affect any rights to indemnification to which employees other than directors and officers may be entitled by law. No amendment or repeal of this Article TENTH shall apply to or have any effect on any right to indemnification provided hereunder with respect to any acts or omissions occurring prior to such amendment or repeal.

ELEVENTH. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of the law. The Corporation may create a trust fund, grant a security interest and/or use other means (including, without limitation, letters of credit, surety bonds and/or other similar arrangements), as well as enter into contracts providing for indemnification to the fullest extent permitted by law and including as part thereof any or all of the foregoing, to ensure the payment of such sums as may become necessary to effect full indemnification.


IN WITNESS WHEREOF, I have signed this Certificate of Incorporation this 19 th day of November, 2008.

 

By:  

/s/ Dean E. Kotwal

Name:   Dean E. Kotwal
Title:   Incorporator


CERTIFICATE OF CORRECTION FILED TO CORRECT

A CERTAIN ERROR IN THE CERTIFICATE

OF

INBEV WORLDWIDE INC.

FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF

DELAWARE ON NOVEMBER 20, 2008

InBev Worldwide Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

1. The name of the corporation is InBev Worldwide Inc.

2. That a Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on November 19, 2008 (the “Certificate of Incorporation”) and that the Certificate of Incorporation requires correction as permitted by Section 103(f) of the General Corporation Law of the State of Delaware.

3. The inaccuracy of said Certificate of Incorporation to be corrected is that Article FOURTH used the number “2,620,000,033” as the total number of shares which InBev Worldwide Inc. is authorized to issue instead of “2,651,921,108”.

4. Article FOURTH of the Certificate of Merger is hereby corrected to read as follows:

“FOURTH. The total number of shares which the Corporation shall have authority to issue is 2,651,921,108 shares of Common Stock, and the par value of each of such shares is $1.00.”

[ Signature page follows ]


IN WITNESS WHEREOF, the undersigned, being duly authorized to sign this Certificate on behalf of the Corporation, have made and signed this Certificate on this 20th day of November 2008.

 

  INBEV WORLDWIDE INC.
By:  

/s/ Jean-Louis Van de Perre

  Name:   Jean-Louis Van de Perre
  Title:   Vice-President and Secretary


CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF

INBEV WORLDWIDE INC.

InBev Worldwide Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

FIRST: The name of the Corporation, as set forth in the certificate of incorporation filed with the Secretary of State of the State of Delaware is InBev Worldwide Inc.

SECOND: The Corporation’s certificate of incorporation was filed on November 19, 2008.

THIRD: The Board of Directors of the Corporation duly adopted a resolution setting forth and declaring advisable the amendment of Article FIRST of the certificate of incorporation of the Corporation to change the name of the Corporation. Said Article is hereby amended to read as follows:

“FIRST. The name of the corporation is Anheuser-Busch InBev Worldwide Inc. (the “Corporation”).”

FOURTH: The Board of Directors of the Corporation duly adopted a resolution setting forth and declaring advisable the amendment of Article FOURTH of the certificate of incorporation of the Corporation to decrease the total number of shares that the Corporation shall have authority to issue from 2,651,921,108 shares of Common Stock of the par value of $1.00 per share to 3,000 shares of Common Stock of the par value of $1.00 per share. Said Article is hereby amended to read as follows:

“FOURTH. The total number of shares which the Corporation shall have authority to issue is 3,000 shares of Common Stock, and the par value of each of such shares is $1.00.”

and an additional paragraph shall be added to the text at the end of Article FOURTH that shall read as follows:

“Upon the filing and effectiveness (the “Effective Time”) pursuant to the Delaware General Corporation Law of the certificate of amendment to the Corporation’s Certificate of Incorporation, each of the issued and outstanding shares of Common Stock of the par value of $1.00 per share shall be changed and reclassified into 0.000001 shares of Common Stock of the par value of $1.00 per share, without any further action by the Corporation or the holder thereof.”


FIFTH. In lieu of a vote of stockholders, written consent to the foregoing amendments has been given by the holder of all of the outstanding stock entitled to vote thereon in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, and such amendments have been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

[ the next page is the signature page ]


IN WITNESS WHEREOF, InBev Worldwide Inc. has caused this certificate to be signed by Jean-Louis Van De Perre, its director, on the 20th day of November, 2008.

 

By  

/s/ Jean-Louis Van De Perre

  Name:   Jean-Louis Van De Perre
  Title:   Director

EXHIBIT 3.3

BY-LAWS

OF

INBEV WORLDWIDE INC.

(the “Corporation”)

ARTICLE I

Stockholders

Section 1.1. Annual Meetings . An annual meeting of stockholders shall be held for the election of directors at such date, time and place either within or without the State of Delaware as may be designated by the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting.

Section 1.2. Special Meetings . Special meetings of stockholders may be called at any time by the Chairman of the Board, if any, the Vice Chairman of the Board, if any, the President or the Board of Directors, to be held at such date, time and place either within or without the State of Delaware as may be stated in the notice of the meeting. A special meeting of stockholders shall be called by the Secretary upon the written request, stating the purpose of the meeting, of stockholders who together own of record a majority of the outstanding shares of each class of stock entitled to vote at such meeting.

Section 1.3. Notice of Meetings . Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.

Section 1.4. Adjournments . Any meeting of stockholders, annual or special, may be adjourned from time to time, to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.


Section 1.5. Quorum . At each meeting of stockholders, except where otherwise provided by law or the certificate of incorporation or these by-laws, the holders of a majority of the outstanding shares of stock entitled to vote on a matter at the meeting, present in person or represented by proxy, shall constitute a quorum. In the absence of a quorum of the holders of any class of stock entitled to vote on a matter, the holders of such class so present or represented may, by majority vote, adjourn the meeting of such class from time to time in the manner provided by Section 1.4 of these by-laws until a quorum of such class shall be so present or represented. Shares of its own capital stock belonging on the record date for the meeting to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however , that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

Section 1.6. Organization . Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in the absence of the President by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. The chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of the voting polls.

Section 1.7. Voting; Proxies . Unless otherwise provided in the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one (1) vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power, regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Voting at

 

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meetings of stockholders need not be by written ballot and need not be conducted by inspectors unless the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or represented by proxy at such meeting shall so determine. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. In all other matters, unless otherwise provided by law or by the certificate of incorporation or these by-laws, the affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Where a separate vote by class or classes is required, the affirmative vote of the holders of a majority of the shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class or classes, except as otherwise provided by law or by the certificate of incorporation or these by-laws.

Section 1.8. Fixing Date for Determination of Stockholders of Record .

(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to

 

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consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 1.9. List of Stockholders Entitled to Vote . The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present.

Section 1.10. Consent of Stockholders in Lieu of Meeting . Unless otherwise provided in the certificate of incorporation or by law, any action required by law to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to (a) its registered office in the State of Delaware by hand or by certified mail or registered mail, return receipt requested, (b) its principal place of business, or (c) an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this by-law to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to (a) its registered office in the State of Delaware by hand or by certified or registered mail, return receipt requested, (b) its principal place of business, or (c) an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given

 

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to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the Corporation as provided in this Section 1.10.

ARTICLE II

Board of Directors

Section 2.1. Powers; Number; Qualifications . The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the certificate of incorporation. The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by the Board. Directors need not be stockholders.

Section 2.2. Election; Term of Office; Resignation; Removal; Vacancies . Each director shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any director may resign at any time upon written notice to the Board of Directors or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. Any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Unless otherwise provided in the certificate of incorporation or these by-laws, vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class or from any other cause may be filled by a majority of the directors then in office, although less than a quorum, or by the sole remaining director. Any director elected or appointed to fill a vacancy shall hold office until the next annual meeting of the stockholders and his or her successor is elected and qualified or until his or her earlier resignation or removal.

Section 2.3. Regular Meetings . Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board may from time to time determine, and if so determined notice thereof need not be given.

Section 2.4. Special Meetings . Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chairman of the Board, if any, by the Vice Chairman of the Board, if any, by the President or by any two directors. Reasonable notice thereof shall be given by the person or persons calling the meeting.

Section 2.5. Participation in Meetings by Conference Telephone Permitted . Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the Board of Directors, or any committee designated by the Board, may

 

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participate in a meeting of the Board or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting.

Section 2.6. Quorum; Vote Required for Action . At all meetings of the Board of Directors one-third of the entire Board shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board unless the certificate of incorporation or these by-laws shall require a vote of a greater number. In case at any meeting of the Board a quorum shall not be present, the members of the Board present may adjourn the meeting from time to time until a quorum shall be present.

Section 2.7. Organization . Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in their absence by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting.

Section 2.8. Action by Directors Without a Meeting . Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if the number of directors that would be necessary to authorize or take such action at a meeting of the Board or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or such committee, as applicable.

Section 2.9. Compensation of Directors . Unless otherwise restricted by the certificate of incorporation or these by-laws, the Board of Directors shall have the authority to fix the compensation of directors.

ARTICLE III

Committees

Section 3.1. Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the

 

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Board of Directors or in these by-laws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by law to be submitted to stockholders for approval, (ii) adopting, amending or repealing these by-laws or (iii) removing or indemnifying directors.

Section 3.2. Committee Rules . Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee and in other respects each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these by-laws.

ARTICLE IV

Officers

Section 4.1. Officers; Election . As soon as practicable after the annual meeting of stockholders in each year, the Board of Directors shall elect a President and a Secretary, and it may, if it so determines, elect from among its members a Chairman of the Board and a Vice Chairman of the Board. The Board may also elect one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person unless the certificate of incorporation or these by-laws otherwise provide.

Section 4.2. Term of Office; Resignation; Removal; Vacancies . Unless otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the Board at any regular or special meeting.

 

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Section 4.3. Powers and Duties . The officers of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in these by-laws or in a resolution of the Board of Directors which is not inconsistent with these by-laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board. The Secretary shall have the duty to record the proceedings of the meetings of the stockholders, the Board of Directors and any committees in a book to be kept for that purpose. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties.

ARTICLE V

Stock

Section 5.1. Stock Certificates and Uncertificated Shares .

(a) The shares of stock in the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate theretofore issued until such certificate is surrendered to the Corporation. Every holder of stock represented by certificates shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, representing the number of shares of stock registered in certificate form owned by such holder. If such certificate is manually signed by one officer or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

(b) Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.

Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates . The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

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ARTICLE VI

Miscellaneous

Section 6.1. Fiscal Year . The fiscal year of the Corporation shall be determined by the Board of Directors.

Section 6.2. Seal . The Corporation may have a corporate seal which shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

Section 6.3. Waiver of Notice of Meetings of Stockholders, Directors and Committees . Whenever notice is required to be given by law or under any provision of the certificate of incorporation or these by-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of incorporation or these by-laws.

Section 6.4. Indemnification of Directors, Officers and Employees . The Corporation shall indemnify to the full extent permitted by law any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person’s testator or intestate is or was a director, officer or employee of the Corporation or serves or served at the request of the Corporation any other enterprise as a director, officer or employee. Expenses, including attorneys’ fees, incurred by any such person in defending any such action, suit or proceeding shall be paid or reimbursed by the Corporation promptly upon receipt by it of an undertaking of such person to repay such expenses if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation. The rights provided to any person by this by-law shall be enforceable against the Corporation by such person who shall be presumed to have relied upon it in serving or continuing to serve as a director, officer or employee as provided above. No amendment of this by-law shall impair the rights of any person arising at any time with respect to events occurring prior to such amendment. For purposes of this by-law, the term “Corporation” shall include any predecessor of the Corporation and any constituent corporation (including any constituent of a constituent) absorbed by the Corporation in a consolidation or merger; the term “other enterprise” shall include any corporation, partnership, joint venture, trust or employee benefit plan; service “at the request of the Corporation” shall include service as a director, officer or employee of the Corporation which imposes duties on, or involves services by, such director, officer or employee with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes

 

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assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation.

Section 6.5. Interested Directors; Quorum . No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (1) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

Section 6.6. Form of Records . Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

Section 6.7. Amendment of By-Laws . These by-laws may be amended or repealed, and new by-laws adopted, by the Board of Directors, but the stockholders entitled to vote may adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them.

 

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EXHIBIT 3.4

« Ambrew S.A. »

limited liability company ( société anonyme )

Munsbach / Schuttrange

R.C.S. Luxembourg, section B number 99 525

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COORDINATED ARTICLES OF ASSOCIATION as of 18 November 2008

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CHAPTER I.- FORM, NAME, REGISTERED OFFICE, OBJECT, DURATION

Article 1. Form, Name

There is hereby established by the subscribers and all those who may become owners of the shares hereafter created, a company (the “Company”) in the form of a limited liability company ( société anonyme ) which will be governed by the laws of the Grand Duchy of Luxembourg and by the present articles of association.

The Company will exist under the name of “ Ambrew S.A. ”.

Article 2. Registered Office

The registered office of the Company is located in Schuttrange.

The registered office may be transferred to any other place within the City of Schuttrange   by a resolution of the board of directors.

If the board of directors would consider that extraordinary political, economic or social developments that would interfere with the normal activities of the Company at its registered office or with the ease of communications with such office or between such office and persons abroad are likely to occur or are imminent, the Company may temporarily transfer the registered office abroad, until the complete cessation of these abnormal circumstances; such temporary measures will have no effect on the nationality of the Company, which, notwithstanding the temporary transfer of the registered office, will remain a company governed by the laws of Luxembourg. Such declaration of transfer will be made and notified to third parties by one of the executive bodies of the Company having powers to bind the Company for ordinary and daily management.

Article 3. Object

The object of the Company is to perform any operations directly or indirectly related to the holding of interests under any form whatsoever in any company, as well as the administration, management, control and development of such holdings. The object of the Company is also the holding of trademarks.

The Company may carry out any financial operation for the benefit of companies forming part of the Company’s group.

The Company may also perform, in Luxembourg and abroad, financing operations by granting loans to companies forming part of the same international group as the Company. Such loans would be refinanced by, among others, but without limitation, financial means and instruments such as loans granted by shareholders or group companies or banks.

The Company may, among others, use its funds to create, manage, enhance and wind-up any portfolio composed of any securities and trademarks of any kind, to participate in the creation of, in the development of and in the control of any company, to acquire by way of contribution, subscription, underwriting, call option or otherwise, any security and trademarks, to transfer these securities and trademarks by way of sale, assignment, exchange or otherwise, to develop these securities and trademarks and to grant support, loans, advances or guarantees to any company in which the Company has an interest.

In general, the Company may carry out any financial, commercial, industrial, moveable or immoveable operation and may take any measure to preserve its rights and to perform any kind of operations which are directly or indirectly related to its object or which are likely to promote the development thereof.

 

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Article 4. Duration

The Company is formed for an unlimited duration.

It may be dissolved at any time by a decision of the general meeting of shareholders, voting in accordance with the provision provided by law.

CHAPTER II.- CAPITAL, SHARES

Article 5. Issued Capital

The issued capital of the Company is set at one-hundred forty-eight million six-hundred forty thousand three hundred and twenty euro (EUR 148,640,320.-) represented by four million six hundred forty-five thousand and ten (4,645,010) shares . Each issued share has a nominal value of thirty two euro (EUR 32.-) and is fully paid up.

The rights and obligations attached to the shares shall be identical except to the extent otherwise provided by the Articles of Association or the Law.

The authorized capital of the Company is set at thirty-two million euro (EUR 32,000,000) represented by one million (1,000,000) shares. Each authorized share has a nominal value of thirty two euro (EUR 32.-).

The Board of Directors is authorized and empowered, within the limits of the authorized capital, to (i) proceed to any increase of the issued capital in one or several times, following, as the case may be, the exercise of the subscription and/or conversion rights granted by the Board of Directors within the limits of the authorized capital under the terms and conditions of warrants (which may be separated or attached to shares, bonds, notes or similar instruments), convertible bonds, or similar instruments issued from time to time by the Company, by issuing new shares, with or without share premium, against payment in cash or in kind, by conversion of claims of the Company or in any other manner; (ii) determine the place and date of the issue or the successive issues, the terms and conditions of the subscription and payment of the new shares; and (iii) remove or limit the preferential subscription right of the shareholders in case of an issue of shares against payment in cash. This authorisation is granted for a period of five (5) years as from the date of publication of the extraordinary general meeting of 20 December 2005 in the Mémorial and it may be renewed by a decision of the general meeting of shareholders adopted in compliance with the quorum and majority rules required under these Articles of Association or, as the case may be, by the Law for any amendment of these Articles of Association.

The board of directors may delegate to any duly authorized person the duties of accepting subscriptions and receiving payment for shares representing part or all of the issue of new shares within the limits of the authorized capital.

Following each increase of the issued capital within the limits of the authorized capital, realized and duly stated in the form provided for by law, the present article will be modified so as to reflect the capital increase. Such modification will be recorded in a notarial deed by the Board of Directors or any person duly authorized and empowered for that purpose by the Board of Directors.

Article 6. Form of the Shares

The shares are and will remain in registered form and the Company will keep a shareholders register to this effect.

The Company may issue multiple registered share certificates.

 

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CHAPTER III.- BOARD OF DIRECTORS, STATUTORY AUDITORS

Article 7. Board of Directors

The Company shall be managed by a board of directors, composed of at least three members, who need not be shareholders themselves.

The board members shall be appointed by the general meeting of shareholders, which will determine their number and the duration of their mandate, which may not exceed six years, and the members will remain in office until the appointment of their successors. They are eligible for re-appointment and may be removed at any time, with or without cause, by the general shareholders’ meeting.

In the event of one or several vacancies in the board of directors, the remaining board members may elect a new director by a majority vote until the next general meeting of shareholders.

Article 8. Meetings of the Board of Directors

The board of directors shall elect one of its members to be chairman. It may also appoint a secretary, who need not be a director himself and who will be responsible for keeping the minutes of the meetings of the board of directors and the general shareholders’ meetings.

The board of directors will meet upon call by the chairman. A meeting of the board of directors must be convened if any two of its members so require.

The chairman will preside at all general shareholders’ meetings and all board meetings, except in case of his absence where the general shareholders’ meeting or the board of directors may appoint another member of the board of directors as chairman to preside the meeting by majority vote.

Written notice of any meeting of the board of directors shall be given to all the directors at least one week prior to the date of the meeting, except in case of emergency or with the consent of all the persons entitled to attend such meeting. The convening notice shall indicate the place and the agenda of the meeting.

Each director may waive this convening notice by his consent in writing. No separate convening notice is required for meetings held at times and places specified in a resolution previously adopted by the board of directors.

Each meeting of the board of directors shall be held at the registered office of the Company or at any other place within the Grand Duchy of Luxembourg, provided that such place is indicated on the convening notice.

Any member of the board of directors may act at the board meetings by appointing another member of the board of directors as his proxy in writing.

The board of directors can deliberate or act validly only if at least the majority of the directors is present or represented.

Decisions shall be taken by a majority of the votes of the directors present or represented at the meeting.

In case of urgency, a written decision, signed by all the members of the board of directors, is proper and valid as though it had been adopted at a meeting of the board of directors which was duly convened and held. Such decision may be documented in a single document or in several separate documents having the same content and each of them signed by one or several directors.

 

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Article 9. Minutes of the Meetings of the Board of Directors

The minutes of any meeting of the board of directors will be signed by the chairman of the meeting and by the directors attending the meeting. Any proxies will remain attached thereto.

Copies or extracts of these minutes to be produced in judicial proceedings or otherwise may be signed by the chairman or by any two directors.

Article 10. Powers of the Board of Directors

The board of directors is vested with the broadest powers to perform all acts necessary or useful for achieving the Company’s object. All powers not expressly reserved to the general shareholders’ meeting by law or these articles are within the competence of the board of directors.

Article 11. Delegation of Powers

The board of directors may delegate the daily management of the Company and the representation of the Company within such daily management to one or more directors, managers, attorneys, employees, or other agents who do not need to be shareholders of the Company, or may grant other special powers or proxies or entrust permanent or temporary functions to specific persons of his choice acting individually or jointly.

The delegation of the daily management to a director is subject to the prior authorisation by the general shareholders’ meeting.

Article 12. Conflicts of Interest

No contract or other transaction between the Company and any other company or firm shall be affected or invalidated by the mere fact that one (or several) member(s) of the board of directors, or any officer of the Company, has a personal interest in, or is a director, shareholder, proxy, representative or employee of such other company or firm. Any director or officer of the Company who is at the same time director, shareholder, officer or employee of another company or firm with which the Company shall contract or otherwise engage in business shall not, by reason of such affiliation with such other company or firm, be prevented from giving its opinion, voting or acting upon any matters with respect to such contract or other business.

If any director or representative of the Company has or may have any personal interest in any transaction of the Company, he/she shall disclose such personal interest to the board of directors and shall not take part in the deliberations or vote on any such transaction. Such transaction and the personal interest of the directors or representative therein shall be disclosed in a special report to the next general meeting of shareholders.

The Company shall indemnify any director or officer of the Company, their successors, heirs, executors and administrators, against damages and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been director or officer of the Company, or, at the request of the Company, any other company of which the Company is a shareholder or creditor and by which he/she is not entitled to be indemnified, except in relation to matters in which he/she shall be declared liable for gross negligence or misconduct or for not complying with its duties towards the Company; in the event of a settlement, indemnification shall be provided only in connection with such matters covered by the settlement and only if the Company is advised by its legal counsel that the person to be indemnified has not failed to its duties towards the Company. The foregoing right of indemnification shall not exclude other rights to which the persons to be indemnified may be entitled.

 

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Article 13. Representation of the Company

The Company will be bound towards third parties by the joint signatures of any two directors, or by the single signature of the person to whom the daily management has been delegated within such daily management, or by the joint signatures or single signature of any person(s) to whom such signatory power has been delegated by the board of directors but only within the limits of such power.

Article 14. Statutory Auditors

The operation of the Company shall be reviewed by one or more statutory auditors, who need not be shareholders themselves.

The statutory auditor(s) will be appointed by the general meeting of shareholders, which will determine the number of such auditors and the duration of their mandate, which may not exceed six years. They will remain in office until their successors are elected and they are eligible for re-appointment. They may be removed at any time, with or without cause, by a resolution of the general meeting of shareholders.

CHAPTER IV.- GENERAL MEETING OF SHAREHOLDERS

Article 15. Powers of the General Meeting of Shareholders

Any regularly constituted general meeting of shareholders of the Company represents the entire body of shareholders.

The general meeting of shareholders shall have all powers granted to it by law.

Article 16. Annual General Meeting

The annual general meeting of shareholders will be held in the City of Luxembourg at the registered office of the Company or any other place specified in the convening notice on the last Wednesday of June, each year at 3.00pm.

If such day is a public holiday, the meeting will be held on the next following business day.

Article 17. Other General Meetings

The board of directors may convene other general meetings of shareholders. Such meetings must be convened if shareholders representing at least one fifth of the Company’s capital so require.

General meetings of shareholders, including the annual general meeting of shareholders, may be held abroad each time the board of directors consider, in its sole discretion, that circumstances of force majeure so require.

Article 18. Procedure, Vote

General meetings shall be convened by the board of directors or by the statutory auditor(s) in compliance with the conditions set forth by law. The convening notice will specify the agenda of the general meeting of the shareholders.

If all the shareholders are present or represented at a general meeting of shareholders and if they state that they have been duly informed of the agenda of the meeting, the meeting may be held without prior notice.

Each shareholder is entitled to attend and speak at any general meeting of shareholders by appointing in writing, by fax, cable, telegram or telex, another person who need not be a shareholder himself, as a proxy holder.

 

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The board of directors may determine any additional conditions that must be fulfilled in order for a shareholder to take part in a general meeting of shareholders.

Unless otherwise provided by law, the decisions are taken at the simple majority, notwithstanding the number of shares represented at the meeting.

Each share entitles to one vote.

Copies or extracts of the minutes of the general shareholders’ meeting to be produced in judicial proceedings or otherwise shall be signed by the chairman of the board of directors or by two directors.

CHAPTER V.- FINANCIAL YEAR, DISTRIBUTION OF PROFITS

Article 19. Financial Year

The Company’s financial year begins on the first day of January and ends on the thirty-first day of December of each year.

The board of directors shall prepare annual accounts in accordance with the requirements of Luxembourg laws and accounting practices.

Article 20. Distribution of Profits

From the annual net profits of the Company, at least five per cent shall each year be allocated to the reserve required by law. That allocation will cease to be required as soon and as long as the legal reserve amounts to one tenth of the issued capital of the Company.

Upon recommendation of the board of directors, the general meeting of shareholders shall determine the allocation of the remainder of the annual net profits. The general meeting may decide to allocate the whole or part of the remainder to a reserve or to a provision, to carry it forward to the next following financial year or to distribute it, to the shareholders as dividends.

The board of directors may pay out an advance payment on dividends to the shareholders in accordance with the conditions provided by law. The board of directors fixes the amount and the date of payment of any such advance payment.

The Company may repurchase its own shares in accordance with the conditions provided by law.

CHAPTER VI.- DISSOLUTION, LIQUIDATION

Article 21. Dissolution, Liquidation

The Company may be dissolved at any time by a resolution of the general meeting of shareholders adopted in compliance with the quorum and majority required for any amendment of the Articles of Association, unless otherwise provided by law.

During the dissolution of the Company, one or more liquidators, appointed by the general meeting of the shareholders which will determine their powers and their emoluments, will proceed with the liquidation of the Company.

CHAPTER VII.- APPLICABLE LAW

Article 22. Applicable Law

All matters not governed by the Articles of Association shall be determined in accordance with the Laws, in particular the law of 10 August 1915 on commercial companies, as amended.

 

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Conformed copy of the consolidated articles of association.

Belvaux, 11 December 2008.

 

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EXHIBIT 3.5

“COBREW”

Limited Liability Company ( Naamloze Vennootschap )

Registered office at 3000 Leuven, Brouwerijplein, 1

Exploitation office at 1070 Brussels (Anderlecht), Industrielaan, 21

Register of Legal Entities number 428.975.372

CONSOLIDATED ARTICLES OF ASSOCIATION

as of 13 June 2006 after amendment of the articles

HISTORY

(In application of article 75, paragraph 1, 2° Companies Code)

INCORPORATION DEED:

The company was incorporated by deed executed by and before Mr. Claude Hollanders de Ouderaen, Notary in Leuven, on the twenty-first of May nineteen hundred eighty-six, published in the Schedules to the Belgian State Gazette on the seventeenth of June nineteen hundred eighty-six thereafter under number 860617-55/56.

AMENDMENTS TO THE ARTICLES:

The articles were altered by deeds executed by and before Mr. Claude Hollanders de Ouderaen, Notary in Leuven, on:

 

   

the ninth of April nineteen hundred eighty-seven, published in the Schedules to the Belgian State Gazette on the seventh of May thereafter, under number 870507-99/100;

 

   

the twenty-ninth of September nineteen hundred eighty-eight, published in the Schedules to the Belgian State Gazette on the twenty-seventh of October thereafter, under number 881027-18/19;

 

   

the twentieth of September nineteen hundred ninety, published in the Schedules to the Belgian State Gazette on the twelfth of October thereafter, under number 901012-77/78;

 

   

the thirty-first of December nineteen hundred ninety, published in the Schedules to the Belgian State Gazette on the twenty-fifth of January nineteen hundred ninety-one, under number 910125-357/358;

 

   

the twenty-eighth of February nineteen hundred ninety-one, published in the Schedules to the Belgian State Gazette on the eleventh of April thereafter, under number 910411-261/262;


   

the twenty-fifth of September nineteen hundred ninety-one, published in the Schedules to the Belgian State Gazette on the twenty-second of October thereafter, under number 911022-3/4;

 

   

the twenty-seventh of March nineteen hundred ninety-five, published in the Schedules to the Belgian State Gazette on the twenty-second of April thereafter, under number 950422-471/472;

 

   

the twenty-ninth of June nineteen hundred ninety-five, published in the Schedules to the Belgian State Gazette on the twenty-seventh of July thereafter, under number 950727-54.

The articles were altered by deeds executed by and before by Mr. David Hollanders de Ouderaen, Notary in Leuven, on:

 

   

the fifth of November nineteen hundred ninety-seven, published in the Schedules to the Belgian State Gazette on the third of December thereafter, under number 971203-374;

 

   

the tenth of August nineteen hundred ninety-eight, published in the Schedules to the Belgian State Gazette on the first of September thereafter, under number 980901-287;

 

   

the twenty-sixth of October nineteen hundred ninety-eight, published in the Schedules to the Belgian State Gazette on the twentieth of November thereafter, under number 981120-322;

 

   

the twenty-eighth of February two thousand, published in the Schedules to the Belgian State Gazette on the twenty-second of March thereafter, under number 20000322-350;

 

   

the thirteenth of September two thousand, published in the Schedules to the Belgian State Gazette on the third of October thereafter, under number 20001003-157.

The articles were altered by deeds executed by and before by Mr. Eric Spruyt, Notary in Brussels, on:

 

   

the fifth of December two thousand, published in the Schedules to the Belgian State Gazette on the sixth of January two thousand and one, under number 20010106-15;

 

   

the twelfth of January two thousand and one, published in the Schedules to the Belgian State Gazette on the seventh of March thereafter, under number 20010307-467;

 

   

the thirty-first of May two thousand and one, published in the Schedules to the Belgian State Gazette on the thirtieth of June two thousand and one, under number 20010630-552;

 

   

the fifth of February May two thousand and two, published in the Schedules to the Belgian State Gazette on the fourth of April two thousand and two, under number 20020404-260;

 

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the fifteenth of December two thousand and four, published in the Schedules to the Belgian State Gazette on the twenty-fifth of April two thousand and five, under number 20050425-60328.

The articles were altered by deed executed by and before by Mr. Benedikt van der Vorst, Notary in Brussels, on the nineteenth of May two thousand and six, and filed for publication in the Schedules to the Belgian State Gazette.

The articles were altered the last time by deed executed by and before by Mr. Eric Spruyt, Notary in Brussels, on the thirteenth of June two thousand and six, and filed for publication in the Schedules to the Belgian State Gazette.

CONSOLIDATED ARTICLES ON 13.06.2006

ARTICLES

Chapter I. Nature of the company

Article 1. Name

The company is a limited liability company. Its name is “COBREW”.

Article 2. Registered office

The registered office is located at 3000 Leuven, Brouwerijplein, 1.

It may be transferred to any other location in Belgium by way of ordinary decision of the board of directors, which has all necessary powers thereto.

The company may by ordinary decision of the board of directors establish seats of administration or exploitation, branch offices or offices in Belgium or abroad.

Article 3. Corporate purpose

The corporate purpose of the company is:

The development and centralisation, exclusively in the interest of the companies which are part of the group to which the Company belongs, as referred to in article 2 of the Royal Decree nr. 187 of thirty December nineteen hundred eighty-two regarding the establishment of coordination centres, of the following activities: the publicity, the information rendering and gathering, the insurance and reinsurance, the scientific research, the relations with the national and international authorities, the centralisation of the accounting activities, administration, IT and general services, the centralisation of the financial transactions and to cover the risks emanating from the exchange rates fluctuations, the treasury management, the invoicing, the re-invoicing and the factoring, the financial lease, movable as well as immovable, the market soundings, the legal opinions and management, the fiscal opinions, the auditing, as well as all activities which have a preparatory or assisting character for the companies of the group.

In the framework of its corporate purpose, the company may purchase, construct, let and lease all assets, movable as well as immovable, and, in general, engage in all civil, commercial, industrial

 

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and financial activities, including the exploitation of all intellectual property rights and of all related industrial and commercial property.

Article 4. Duration

The company is incorporated in perpetuity. It may be wound up by decision of the shareholders’ meeting which deliberates in accordance with applicable statutory rules.

Chapter II. Share capital

Article 5. Capital – Nature of the securities

The issued capital of the company amounts to three billion three hundred ninety-nine million nine hundred twelve thousand three hundred forty euro and seventy cent (3,399,912,340.70 euro). It is fully paid-up.

It is represented by one million three hundred seventy-one thousand four hundred eighty-nine (1,371,489) nominal shares, without nominal value. Each share represents one million three hundred seventy-one thousand four hundred eighty-ninth (1/1,371,489th) of the issued capital.

The shares numbered 1 to 873,102 are class A shares; the shares numbered 873,103 to 1,371,489 are class B shares.

The issued shares are registered shares; they may, at the option and the expense of the owner, be converted in bearer securities.

Each holder of single shares can exchange them with the company at his own expense for one or more securities, which represent multiple shares and vice versa.

By ordinary decision of the board of directors, the shares may be split in sub-shares, which, when united in a sufficient number, even with different numbers, represent the same rights as the share.

Article 6. Authorised capital

The board of directors may increase the share capital in one or several times by an amount of ninety-nine million one hundred fifty-seven thousand four hundred and nine euro and ninety-one cent (99,157,409.91 euro).

The increase(s) of capital decided under the present authorisation may be effected:

 

   

either by new contributions in cash or in kind, including as the case may be an issue premium not available for distribution, the amount of which shall be fixed by the board of directors, and by the creation of new shares conferring such rights as the board of directors shall determine; or

 

   

by conversion of reserves, including those not available for distribution - except the special reserve class A and reserve class B referred to in article 30 of these articles-, or of issue premiums, and with or without the creation of new shares.

This authorisation is granted to the board of directors for a period of five years, as from the publication of the modification to the articles resolved upon by the extraordinary shareholders’

 

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meeting of twenty-one September nineteen hundred ninety. It can be renewed once or several times, by the shareholders’ meeting which deliberates in accordance with the Companies Code.

In the framework of the authorised capital the board of directors may limit or cancel the priority rights of the existing shareholders.

In the event of a capital increase decided by the board of directors pursuant to the authorised capital, the board of directors shall allocate the issue premiums, if any, to an account not available for distribution, which, as the capital, shall form the guarantee of third parties and which, subject to its incorporation in the capital by the board of directors, be reduced or cancelled by decision of the shareholders’ meeting, deliberating according to the conditions required by article 612 of the Companies Code.

Article 7. Capital increase – Preferential subscription right

In case of an increase of capital, the shares which are subscribed in cash shall first be offered to the shareholders, in proportion to that share of the capital represented by their shares.

The period within which the preferential subscription right may be exercised shall be fixed by the shareholders’ meeting.

The preferential subscription right is negotiable during the subscription period, to the extent to which the shares may be transferred.

The board of directors may decide that preferential subscription rights which were not or only partly exercised by any shareholder shall accrue proportionally to the shareholders which have already exercised their preferential subscription right, and shall fix the way of this subscription.

The board of directors may also conclude, upon such terms as it shall determine, all agreements intended to secure the subscription of part or all of the new shares to be issued.

The shareholders’ meeting may limit or cancel the preferential subscription right in the interest of the company and in accordance with the conditions laid down in the Companies Code

Article 8. Issuance of Bonds

The company may issue mortgage bonds or other bonds by resolution of the board of directors and on such conditions as it shall determine.

The convertible bonds and the bonds with preferential subscription right are issued by resolution of the shareholders’ meeting which deliberates upon this in accordance with the provisions on the modification of the articles.

The preferential right to the benefit of the shareholders linked to these bonds can be executed under the conditions as described in the previous article for the subscription of new shares.

The shareholders’ meeting which decides on the issuance of convertible bonds or bonds with a preferential subscription right may, under the circumstances provided in the Companies Code, limit or cancel the preference right.

Article 9. Indivisibility of shares

All shares shall be held in undivided ownership vis-à-vis the company.

 

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If a share belongs to different persons, the company may suspend the rights attached to that share until one single person is appointed to be the owner of the share vis-à-vis the company.

Article 10. Acquisition by the company of its own shares

The company may acquire its own shares by acquisition or exchange, in accordance with article 620 §1 of the Companies Code.

All rights and especially the voting right linked to the own shares, which have been acquired by the company and held in the portfolio according to the legislation referred to, are suspended.

In the event of a distribution of dividends, the company may reserve the dividend which is related to these shares, if need be in accordance with article 30 of these articles, to the benefit of future acquirers, or not take into account these shares.

The shares, which have been acquired or retained irregularly as well as these obtained for free, have no legal value and must be destroyed.

Chapter III. Administration-Audit

Article 11. Composition of the board of directors

The company shall be managed by a board of directors of minimum three directors, who may be natural persons or legal entities, are appointed by the shareholders’ meeting and are dismissible by it.

When a legal entity is appointed as a director, it must specifically appoint an individual as its permanent representative, such individual to be chosen from among its shareholders, managers, directors or employees and to carry out the office of director in the name and on behalf of the legal entity. The appointment and termination of the office of the permanent representative are governed by the same disclosure rules as if he/she were exercising the office on his/her own behalf.

The term of office of the directors shall be three years, unless the shareholders’ meeting fixes a shorter term.

The directors shall be eligible for re-election.

The term of office of a retiring director who has not been re-elected shall terminate immediately after the closing of the annual shareholders’ meeting.

Article 12. Vacancy

The remaining directors convened as a board may make appointments to fill one or several casual vacancy (vacancies) arising on the board until the next shareholders’ meeting, which shall proceed to the firm appointment.

 

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Article 13. Chairmanship

The Board of Directors shall elect one of its members to be chairman.

The shareholders’ meeting may, upon proposal of the Board of Directors, confer honorary status on former chairmen, vice-chairmen or directors. The Board may then invite them to attend its meetings in an advisory capacity.

Article 14. Meetings

The Board of Directors shall meet as frequently as the interests of the company shall require or each time upon the call of at least two directors, and this after being convened by and under the chairmanship of its chairman or, in case of impediment, the director which has been appointed thereto by his colleagues.

Meetings of the board of directors shall be convened at the registered office of the company or at the place indicated in the notice convening the meeting.

Article 15. Deliberations - Decisions

Except in cases of force majeure, and, namely, war, civil disturbance and disaster, in which case the quorum for the board of directors shall be two directors present or represented, the board of directors may validly deliberate only if the majority of the directors are present or represented.

Any director may, by ordinary letter, as well as per fax, telex or any other written mean, grant a proxy to another director in order to be represented. However, a director may not hold a proxy for more than one director.

The decisions of the board are taken by a majority of the votes cast; in case of an equality of votes, the chairman of the meeting shall have a casting vote.

In case one or more directors which have an interest which is contrary to the interest of the company abstain from voting in a meeting where the required majority is present to deliberate, the decisions are valid if adopted by a majority of the other present or represented members of the board.

Article 16. Minutes

The decisions of the board of directors shall be recorded in minutes, signed by at least the majority of the members present at the meeting.

A dated document or a collection of dated similar documents, demonstrating that all directors have signed the same decisions and which are attached to the file of minutes of the board of directors, has equal value to a decision of the board of directors.

Copies or extracts of these minutes that must be produced in court or elsewhere are signed by one director.

Article 17. Powers of the board

The board of directors shall have the powers to do all that is necessary or useful to achieve the corporate purpose of the company, with the exception of those powers reserved to the shareholders’ meeting by law or these articles.

 

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Article 18. External representation – Management Committee – Delegated powers

Irrespective of the board’s general powers of representation as a collegial body, the company shall be validly represented towards third parties and in legal proceedings, as plaintiff or defendant, by two directors acting jointly.

The board of directors may appoint a Management Committee from amongst or outside its members. It shall fix the powers and procedures thereof and set the remuneration of its members which shall be charged to overheads.

The board of directors may confer the powers of day-to-day management of the company, together with the power to represent the company for such day-to-day management, upon one or more persons who may but need not be directors.

The board of directors, the Management Committee, and the persons with the powers of day-to-day management within the limits of those management powers, may likewise grant special and specific authority to one or more persons of their choice.

Agents granted special authority may appoint one or more substitutes to exercise their powers.

Agents granted special authority and their substitutes may represent the company in dealings including those involving the collaboration of a public civil servant or officer. The production of a copy of the decision of the board of directors or the authority conferred by one or more persons with the powers of day-to-day management, by the Management Committee or agents holding special authority shall constitute sufficient proof of their powers.

Article 19. Audit

The financial position, annual accounts and compliance with the law and these articles or transactions required to be disclosed in the annual accounts shall be audited to one or more statutory auditors, who may be natural or legal persons, appointed by the shareholders’ meeting. The statutory auditors are appointed by the shareholders’ meeting for a renewable period of three years.

The appointment of the retiring auditor which has not been re-appointed shall terminate immediately after the closing of the annual shareholders’ meeting.

Article 20. Remuneration Emoluments

Besides the reimbursement of their costs, the shareholders’ meeting can grant the members of the board of directors fixed fees and emoluments; they will be chargeable to overheads.

The board of directors may also grant a specific remuneration chargeable to overheads, to directors, assigned with special duties or assignments.

The statutory auditor will be remunerated by a fixed fee determined by the shareholders’ meeting at the beginning of his (their) mandate and which may be changed only by agreement between the parties.

 

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Chapter IV. Shareholders’ meetings

Article 21. Powers

A duly constituted shareholders’ meeting represents all the shareholders.

It has the powers conferred on it by law and these articles.

The shareholders’ meeting has the right to clarify or to extend the corporate purpose and to modify the legal nature of the company, provided it acts in the way prescribed in the articles for the modification of the articles.

Article 22. Meetings

The ordinary and extraordinary shareholders’ meeting are held at the registered office or at the place determined in the convening notice.

The annual shareholders’ meeting is held the second Friday of the month of April at 10 o’clock or if such day is a legal holiday, on the following working day, Saturdays excepted.

An extraordinary shareholders’ meeting may be convened by the board of directors or the auditor(s), each time they consider it necessary. They must be convened at the request of the shareholders which together represent a fifth of the capital.

If the written resolutions’ procedure as set out in article 26bis of these articles has been selected, the company should receive the notice mentioning the agenda and the proposed decisions, signed and approved by all shareholders, at the latest on the day determined by the articles for the annual shareholders’ meeting.

Article 23. Admission to the meeting

In order to have the right to participate in the meeting, holders of bearer shares shall be required to deposit, at the registered office or at the institution designated in the convening notice, and at the latest on the fifth day prior to the day chosen for the meeting.

The owners of registered shares must, within the same time period, inform the board of directors of their intention to participate in the meeting, with notification of the number of shares in respect for which they will participate in the vote.

However, the board of directors remains entitled to reduce the delays and accept deposits, as well as registrations, after the deadline.

Article 24. Representation

Any shareholder may give a proxy to another shareholder to represent him.

Minors, disabled and other incapable persons, as well as legal entities may also be represented by an agent who is not a shareholder; a shareholder may also be represented by his or her spouse, who is not a shareholder.

 

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Co-owners, as well as the creditors and pledgors, must be represented by a sole person. The bare owners will represent the usufructuaries unless otherwise provided in the deed establishing the usufruct or agreed upon.

Article 25. Office

Each ordinary meeting is chaired by the chairman of the board of directors or, in case of absence, by the director appointed for this purpose by his colleagues in the board.

The chairman of the meeting appoints the secretary, as well as two tellers.

Article 26. Deliberations

The meeting may deliberate only the business on its agenda.

Each share gives entitlement to one vote.

Resolutions shall be passed, except as otherwise required by law, by an absolute majority of the votes cast.

Voting shall be by show of hands or by roll-call.

However, any vote, including the nomination of directors, will proceed by secret ballot if two shareholders request it.

Article 26bis. Written resolutions’ procedure

Except for the decisions which must be passed by a deed, the shareholders may, unanimously and in writing, decide on all matters within the competence of the shareholders’ meeting.

The board of directors will send a notice containing the agenda and proposed decisions to all shareholders and auditors (if any) in this respect, by letter, fax, e-mail or any other data medium, with the request to the shareholders to approve the proposed decisions and to send within a time period set in the notice, a duly signed reply to the registered office or any other place as indicated in the notice.

If the approval of all shareholders in respect of all items in the agenda and the written resolutions’ procedure have not been received within the set time period, the decisions will be deemed non existing.

Holders of bonds or registered warrants, as well as the holders of registered certificates which have been issued with the cooperation of the company, have the right to take notice of the decisions at the registered office.

Article 27. Minutes

The minutes are signed by the members of the office and such shareholders who wish to do so.

Copies or extracts, to be produced in court or at any other place, are signed by one director.

 

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Article 28. Adjournments

The board of directors has the right, according to article 555 of the Companies Code, to, during the meeting, adjourn the decision to approve the annual accounts with three weeks. The adjournment does not affect the other decisions taken, except if otherwise decided by the shareholders’ meeting. The next meeting has the power to state definitely the annual accounts.

Chapter V. Company records – Profit allocation

Article 29. Records

The financial year starts on the first of January and ends on the thirty-first of December of each year.

At the end of each financial year, the board of directors draws up an inventory and the annual accounts of the company.

Article 30. Profit allocation

Five per cent of the annual net profits of the company, after deduction of overheads and depreciation, shall be allocated each year to the legal reserve. Such allocation shall cease to be compulsory once the legal reserve amounts to one tenth of the share capital.

The balance shall, with unanimity of the votes, be allocated to the shareholders; however the shareholders’ meeting may also, by ordinary majority of the votes, all or in part, use the balance for reserves and provisions, for supplementary depreciations or for an assignment.

The shareholders’ meeting can, within the limits of the Companies Code, with unanimity of the votes, decide to pay dividends to one class of shares and not to pay dividends to another class of shares on the condition that a same amount per share as the amount paid in dividends to the one class of shares, be placed on a special reserve account called “reserve class A” or “reserve class B” depending on the class of shares which does not receive dividends.

Within each class of shares the shares have equal rights.

A compensation, fixed at the “Euribor 1 year” interest and increased with half a point (0,50%), is added each year to these special reserve accounts, referred to as “reserve class A” and “reserve class B”. This interest compensation shall always be deducted in advance of the profit to be allocated, prior to the decision on the balance of the profit.

The reserves on these special reserve accounts, referred to as “reserve class A” and “reserve class B”, may, during the existence of the company as well as during its winding up, only be distributed to the holders of the respective class A or B. The shareholders’ meeting decides, with unanimity of the votes, on its distribution.

Article 31. Payment of dividends

The board of directors decides on the way, date and place of payment of the dividends. The board of directors can pay interim dividends in accordance with the provisions of article 618 of the Companies Code. The board of directors is required to take into account article 30 of these articles for this.

 

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Chapter VI. Dissolution-Winding up

Article 32. Dissolution

If the company shall be dissolved, it shall be wound up in the manner decided by the shareholders’ meeting, which shall appoint the liquidators.

The shareholders’ meeting shall have the widest powers to determine the powers of the liquidators, fix their emoluments and grant them discharge, even while the liquidation is still pending.

The shareholders’ meeting will be convened, composed and held during the dissolution according to the provisions of chapter IV of these articles. The board of liquidators has the same powers as the board of directors. The shareholders’ meeting is presided by one of the liquidators; it will appoint her chairman itself in the absence or impediment of the liquidators.

Copies or extracts from the minutes of their meetings, to be produced in court or in any other place, are signed by the liquidators or one of them.

Article 33. Distribution

Except as otherwise provided in article 30 of these articles regarding the special reserve accounts, the net profit of the winding up will be divided between all corporate shares, per equal parts.

Chapter VII. Choice of address

Article 34. Choice of address

Any shareholder, director, statutory auditor or liquidator of the company not residing in Belgium shall elect an official address in Belgium. Otherwise he shall be deemed to have elected the registered office of the company as his official address where all communications, notices, processes and documents may validly be sent to or served upon him.

 

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Chapter VIII. Miscellaneous

Article 35. Capital history

The company was incorporated the twenty-first of May nineteen hundred eighty six with a share capital of BEF 500,000,000 (five hundred million) divided into 5,000 (five thousand) shares without nominal value; they have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the ninth of April nineteen hundred eighty seven, the share capital was increased to BEF 1,000,000,000F (one billion) by the creation of 5,000 (five thousand) shares without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the twenty-ninth of September nineteen hundred eighty eight, the share capital was increased to BEF 1,600,000,000F (one billion six hundred million) by the creation of 6,000 (six thousand) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the twenty first of September nineteen hundred ninety, the share capital was increased to BEF 2,520,000,000F (two billion five hundred twenty million) by the creation of 9,200 (nine thousand two hundred) shares without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the thirty first of December nineteen hundred ninety, the share capital was increased to BEF 3,670,000,000F (three billion six hundred seventy million) by the creation of 11,500 (eleven thousand five hundred) shares without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the twenty fifth of September nineteen hundred ninety one, the share capital was increased to BEF 3,733,000,000 (three billion seven hundred thirty three million) by the creation of 630 (six hundred thirty) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the twenty seventh of March nineteen hundred ninety five, the share capital was increased to BEF 6,559,000,000 (six billion five hundred fifty nine million Belgian) by the creation of 28,260 (twenty eight thousand two hundred sixty) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the twenty ninth of June nineteen hundred ninety five, the share capital was increased to BEF 15,777,000,000 (fifteen billion seven hundred seventy seven million Belgian) by the creation of 92,180 (ninety two thousand one hundred eighty) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the fifth of November nineteen hundred ninety seven, the share capital was increased to BEF 16,644,000,000 (sixteen billion six hundred forty four million Belgian) by the creation of 8,670 (eight thousand six hundred seventy) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the tenth of August nineteen hundred ninety eight, the share capital was increased to BEF 19,342,500,000 (nineteen billion three hundred forty two million five hundred thousand Belgian) by the creation of 26,985 (twenty six thousand nine hundred eighty five) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the twenty sixth of October nineteen hundred ninety eight, the share capital was increased to BEF 22,732,500,000 (twenty two

 

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billion seven hundred thirty two million five hundred thousand) by the creation of 33,900 (thirty three thousand nine hundred) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the twenty eight of February two thousand, the share capital was increased to BEF 25,686,500,000 (twenty five billion six hundred eighty six million five hundred thousand) by the creation of 29,540 (twenty nine thousand five hundred forty) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the thirteenth of September two thousand, the share capital was increased to BEF thirty three billion three hundred ninety seven million two hundred thousand (33,397,200,000) by the creation of seventy seven thousand one hundred and seven (77,107) shares, without nominal value. These shares have been subscribed in kind and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the fifth of December two thousand, the share capital was increased to BEF fifty five billion eight hundred and eleven million nine hundred thousand (55,811,900,000) by the creation of two hundred twenty four thousand one hundred forty seven (224,147) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By several resolutions of the extraordinary shareholders’ meeting held on the twelfth of January two thousand and one, the share capital was set to euro one billion eight hundred forty three million one hundred thousand (1,843,100,000 €) by the creation of one hundred eighty five thousand three hundred sixty eight (185,368) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the thirty first of May two thousand and one, the share capital was increased to euro one billion nine hundred sixty four million seven hundred fifty eight thousand nine hundred thirteen (1,964,758,913 €) by the creation of forty nine thousand seventy six (49,076) shares, without nominal value. These shares have been subscribed in cash and fully paid up.

By resolution of the extraordinary shareholders’ meeting held on the fifth of February two thousand and two, two categories of shares were created and the share capital was increased to euro two billion nine hundred ninety five million three hundred seventy eight thousand three hundred fifty seven and fifty five cents (2,995,378,357.55 €) by the creation of four hundred and fifteen thousand seven hundred forty one (415,741) shares, without nominal value, of which eighty thousand five hundred forty (80,540) shares category A and three hundred thirty five thousand two hundred and one (335,201) shares category B. These shares have been subscribed in cash and fully paid up.

 

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EXHIBIT 3.6

Incorporated under the name “BELBREW” pursuant to a deed executed by and before the notary public Claude Hollanders de Ouderaen in Leuven on the twenty-first of March nineteen hundred and eighty-eight, published in the annexes to the Belgian Official Gazette of the thirteenth of April of the same year under number 880413-192.

The articles of association have been modified:

 

   

by deed executed by and before the notary public Claude Hollanders de Ouderaen in Leuven, with intervention of Mr André van de Vorst, notary public in Ixelles, on the twenty-ninth of April nineteen hundred and eighty-eight, published in the annexes to the Belgian Official Gazette of the twenty-sixth of May of the same year under number 880526-219;

 

   

and the name was replaced by the name “INTERBREW BELGIUM” pursuant to a deed executed by and before the notary public Claude Hollanders de Ouderaen in Leuven, with intervention of Mr André van de vort, notary public in Ixelles, on the seventeenth of March nineteen hundred and eighty-nine, published in the annexes to the Belgian Official Gazette of the eighteenth of April of the same year under number 890418-279;

 

   

pursuant to a deed executed by and before the notary public Claude Hollanders de Ouderaen in Leuven on the twentieth of March nineteen hundred and ninety-one, published in the annexes to the Belgian Official Gazette of the sixteenth of April of the same year, under number 910416-78;

 

   

pursuant to a deed executed by and before the notary public Claude Hollanders de Ouderaen in Leuven on the thirtieth of June nineteen hundred and ninety-three, published in the annexes to the Belgian Official Gazette of the thirty-first of July of the same year under number 930731-213;

 

   

pursuant to a deed executed by and before the notary public Claude Hollanders de Ouderaen in Leuven on the twenty-third of September nineteen hundred and ninety-four, published in the annexes to the Belgian Official Gazette of the twenty-sixth of October of the same year under number 941026-192;

 

   

pursuant to a deed executed by and before the notary public Claude Hollanders de Ouderaen in Leuven on the twenty-first of September nineteen hundred and ninety-five, published in the annexes to the Belgian Official Gazette of the nineteenth of October of the same year under number 951019-99;

 

   

pursuant to a deed executed by and before the notary public David Hollanders de Ouderaen in Leuven on the twenty-eighth of June nineteen hundred and ninety-nine, published in the annexes to the Belgian Official Gazette, followed by a deed by and before executed by the notary public David Hollanders de Ouderaen in Leuven on the second of September nineteen hundred and ninety-nine, published in the annexes to the Belgian Official Gazette of the first of October of the same year under number 991001-19.

 

   

pursuant to a deed executed by and before the notary public David Hollanders de Ouderaen in Leuven on the twenty-ninth of December two thousand, published in the annexes to the Belgian Official Gazette of the twenty-fifth of January two thousand and one under number 20010125-373.

 

   

pursuant to a deed executed by and before the notary public David Hollanders de Ouderaen in Leuven on the twenty-ninth of June two thousand and one, published in the annexes to the Belgian Official Gazette of the eighteenth of July of the same year under numbers 20010718-1269 and 1270.

 

   

pursuant to a deed executed by and before the notary public David Hollanders de Ouderaen in Leuven on the fifth of February two thousand and four, published by extract in the annexes to the Belgian Official Gazette of the twenty-fifty of February of the same year under numbers 04031721 and 04031722.


   

pursuant to a deed executed by and before the notary public David Hollanders de Ouderaen in Leuven on the thirty-first of August two thousand and five, published by extract in the annexes to the Belgian Official Gazette (instrument containing the change of name to “InBev Belgium”) of nineteen of September of the same year under numbers 05130662 and 05130663.


Chapter I - Nature of the company

Article 1 - Name

The company is established in the form of a “société anonyme” (public limited company under Belgian law).

The company’s name is “InBev Belgium”.

Article 2 - Registered Office

The registered office is located in 1070 Brussels ( Anderlecht), at 21 Boulevard Industriel.

It can be transferred to any other location in Belgium by simple decision of the board of directors, which has full authority for this purpose.

By simple decision of the board of directors, the company may establish operational and administrative sites, branches or offices in Belgium or abroad.

Article 3 - Purpose

The purpose of the company is to operate malting plants, to produce and market various beers, beverages and food products, to process and market all the residual and auxiliary products of its industry and trade, regardless of their origin or form, as well as to study, construct or to fully or partially create manufacturing installations for the products mentioned above.

Its purpose is also the purchase, establishment, transformation, sale, rental and subletting, ground lease, concession and operation, in whatever form, of all businesses and all movable and immovable assets and rights.

It may grant credit and any loans, advances and discounts, as well as any securities and guarantees for both the principal amount and for the interests, dividends and costs. It may carry out any exchange, commission and brokerage transactions and obtain, give concession for and exploit any industrial and intellectual property rights as well as any knowledge and techniques, even if they are not patented.

In general it may, alone or in participation, by itself or through third parties, for its personal account or for the account of third parties, carry out any civil, commercial, industrial and financial transactions which may contribute directly or indirectly and completely or partially to the realisation of the company’s purpose.

It may take interests through contribution, merger, subscription or by any other means, in businesses, associations or companies whose purpose is similar, shared or connected or is useful for the direct or the indirect or entire or partial realisation of its economic and social purpose.

It may, as member of the board of directors or of any other similar body, participate in the management of any company or business and provide any services to them.

Article 4 - Duration

The duration of the company is indefinite.

It can be dissolved by decision of the general meeting which deliberates under the conditions and in the manner stipulated for the amendment of the articles of association.


Chapter II - Share Capital

Article 5 - Capital - Nature of the securities

The share capital issued has been established at two hundred and ninety-three million euro (€ 293.000.0000). It has been fully paid up.

It is represented by four million seven hundred and seventeen thousand three hundred and sixty-three (4.717.363) shares, with no specified nominal value. Each of these shares represents one- four million seven hundred and seventeen thousand three hundred and sixty-third part (1/4.717.363th) of the company’s assets.

The shares are registered shares.

The shares can be converted, at the option of the shareholder and at his expense, in bearer shares, provided that the prior consent of the board of directors is obtained.

Every holder of individual shares can, at his expense, exchange his shares for one or several collective share certificates representing several shares.

The shares can by simple decision of the board of directors be converted into subdivided shares that, when united in sufficient number, even if the serial numbers do not succeed each other, grant the same rights as the share.

Article 6 - Authorised capital

The board of directors can be authorised by the general meeting to increase the share capital by a specific amount, in one or several times; it can also be authorised to issue convertible bonds or warrants.

This authorisation is valid for a period of five years after the publication of the resulting amendment to the articles of association in the annexes to the Belgian Official Gazette; it is renewable.

Upon granting this authorisation the general meeting lays down the terms and conditions, formalities and modalities of the increases of capital to be carried out in this context.

Article 7 - Increase of capital - Pre-emption right

The share capital can be increased by the general meeting or by the board of directors within the limits of the authorised capital.

The board of directors is in any case entitled to conclude, under the terms and conditions it determines, all agreements the purpose of which is to ensure the subscription for all or part of the shares to be issued.

The new shares to be issued in cash shall be offered by preference to the shareholders in proportion to the part of the capital represented by their shares, in accordance with articles 592 et seq. of the Code of Companies.

The board of directors can decide that the total or partial non-use by the shareholders of their pre-emption right has as a result that the proportional part of the shareholders who have already exercised their pre-emption right will be increased; the board of directors will also determine the modalities of this subscription.

The general meeting or the board of directors within the limits of the authorised capital can restrict or cancel the pre-emption right in the interest of the company and in accordance with the applicable legal stipulations.


Article 8 - Call for capital

The calls for capital to be made for the shares issued as a result of the increase in the share capital are determined by the board of directors, which determines the time and the amount.

The shareholder who, after a fifteen days’ notice given by registered post, fails to meet this obligation shall pay the company the interests calculated at the legal interest rate increased by two points, starting on the day on which the payment is due.

The board of directors can furthermore, after a second reminder that has remained in vain during one month, deprive the shareholder of his rights and have his securities sold without prejudice to the right to claim the balance due as well as any damages.

The board of directors can authorise the anticipated payment in full of the shares under the conditions which it will determine.

Article 9 - Indivisibility of the shares

The shares are indivisible vis-à-vis the company.

If there are several holders of a share, the company can suspend the exercise of the rights relating to them until one single person is designated as the owner of the share.

Article 10 - Assigns

The rights and obligations connected to a share remain connected to it, regardless of who holds the share.

The creditors or heirs of a shareholder can under no pretext demand the partition or the auction of the goods and securities of the company, nor interfere in any way in its management.

They must, for the exercise of their rights, base themselves on the financial statements and on the deliberations of the general meeting.

Article 11 - Acquisition by the company of its own shares

The company can only acquire its own shares via exchange or purchase, either directly or through the intermediary of a third person, under the conditions contained in the provisions of article 620 of the Code of Companies.

Article 12 - Issue of bonds

The company can issue mortgage or other bonds by decision of the board of directors, which will determine the issue conditions.

The convertible bonds and the warrant bonds as well as the warrants are issued by decision of the general meeting or by decision of the board of directors, within the limits of the authorised capital, in accordance with the applicable legal stipulations.

The right of pre-emptions of the shareholders connected to these bonds or warrants can be exercised, limited or cancelled under the conditions specified by article 7 of the present articles of association relating to the subscription for new shares.


Chapter III - Management - Control

Article 13 - Composition of the board of directors

The company is managed by a board of directors of at least three members who are natural persons or legal entities. They are appointed by the general meeting of shareholders and can be dismissed by it.

If, however, the company has no more than two shareholders, the board of directors may consist of only two members.

In the event that a legal entity is appointed member of the board, this entity will be represented by its permanent representative.

The term of office of the directors is set at six years, unless a shorter term is agreed by the general meeting.

Members of the board can be reappointed.

The mandate of the resigning and not reappointed directors ends immediately after the annual general meeting.

Article 14 - Vacancy

In case of a vacancy of one or several positions of directors, the remaining directors can fill this vacancy provisionally until the next general meeting, which proceeds to the final appointment.

Article 15 - Chairmanship

The board of directors selects a chairman from among its members and may appoint one or more vice-chairmen.

At the proposal of the board of directors, the general meeting may award the former chairmen, vice-chairmen and directors the honorary title of their office. The board may accordingly invite them to participate in its meetings in an advisory capacity.

Article 16 - Meetings

The board of directors meets whenever a meeting is required in the interest of the company or whenever at least two directors request it and this after being convened by and under the chairmanship of its chairman or, should he be unable to do so, the director who has been appointed by his colleagues for this purpose.

The meetings are held at the company’s registered office or at the location indicated in the convening notices.

Article 17 - Deliberation - Decisions

Except in the case of force majeure, war, disturbances and disasters, in which case the board of directors may validly deliberate and decide as long as two board members are present or represented, the board of directors may only validly deliberate if the majority of its members are present or represented.

Each director may give power of attorney to another director to represent him, by ordinary letter as well as by telegram, telex, fax, e-mail or any other means in writing. However, one mandatary may not hold more than one power of attorney.

The decisions are taken by the majority of votes; in the event of a tie, the person chairing the meeting has the casting vote; this stipulation is automatically invalid when the board of directors consists of only two members.


Article 18 - Decisions by written agreement

In exceptional cases, when urgent necessity and the interests of the company require it, the decisions of the board of directors may be taken in writing by unanimous written agreement.

This procedure, however, can not be followed for the approval of the financial statements, nor for the allocation of the authorised capital.

Article 19 - Minutes

The decisions of the board of directors are recorded in minutes which must be signed by no less than the majority of the members who participated in the deliberations.

The copies or extracts of these minutes which must be presented in court or elsewhere, must be signed by one board member.

Article 20 - Powers of the board

The board of directors is authorised to take any action that is useful or necessary for the realisation of the economic and social purpose, with the exception of those reserved by the law or by the articles of association to the general meeting.

Article 21 - External representation - Management board- Powers of attorney

Without prejudice to the general power of representation of the board of directors acting as a governing body and to the exclusive power of representation of the permanent representative mentioned below, the company is represented with respect to third parties and in legal acts, including those in which a public official or a ministerial official assists, as well as in a court of law, as plaintiff or as defendant, by two directors acting jointly.

The board of directors may entrust part of its management powers to an executive committee, in accordance with article 524bis of the Code of Companies. It determines the powers of this committee, regulates its functioning and determines the remuneration of its members which is charged to general expenses.

The board of directors may entrust the daily management of the company as well as the company’s representation with regard to matters of management to one or more persons who may be members of the board of directors or not.

Furthermore, the board of directors, the executive committee and, within the framework of the daily management, those responsible for the management, may entrust one or more persons of their choice with special and well-defined powers.

The special mandataries are authorised to appoint one or more substitutes.

The special mandataries and their substitutes may represent the company in several acts, including those in which a public official or a ministerial official assists.

They need only justify their power of attorney by submitting an extract of the deliberation of the board of directors or of the power of attorney awarded by one or more persons responsible for the daily management, by the executive committee or by the special mandataries.

If the company is appointed director, manager or member of the executive committee of another company, it is represented in this office by its permanent representative, who is appointed by the board of directors.


Article 22 - Supervision

The supervision of the financial situation, the financial statements and the regularity, with regard to the Code of Companies and the articles of association, of the operations reflected in the financial statements, is entrusted to one or several auditors, who may be natural persons or legal entities and who are appointed by the general meeting.

The auditors are appointed for a renewable period of three years.

The office of resigning auditors, the term of office of whom has not been renewed, is terminated immediately after the annual general meeting.

Article 23 - Allowances - Fees

The general meeting can grant the members of the board of directors fixed allowances, attendance fees or profit sharing bonuses on the operating results, which will be charged to general expenses, in addition to the reimbursement of their expenses.

The board of directors can also grant the directors entrusted with special positions or tasks, special allowances, which will be charged to general expenses.

The fees of the auditor(s) consist of a fixed amount determined at the beginning of their term of office by the general meeting; they cannot be changed without the consent of the parties.

Chapter IV - General meetings

Article 24 - Powers

The regularly constituted general meeting represents all shareholders.

It has the powers which are assigned to it by law and by the articles of association.

Article 25 - Meetings

The general meetings are held at the company’s registered office or at the location specified in the convening notices.

Article 26 - Annual general meeting

The annual general meeting is held on the third Thursday of the month of May, at 3:00 p.m. or if that day is a public holiday, on the next working day not including Saturday.

This meeting examines the annual report and the auditor report, discusses the financial statements, decides on the reappointment or replacement of the resigning or outgoing directors or auditors(s), decides on the discharge to be granted to them, and deliberates on all other items which are placed on the agenda.

Article 27 - Special or extraordinary general meeting

A special or extraordinary general meeting can be convened whenever required in the interest of the company. Such a meeting must be convened at the request of the shareholders representing together one fifth of the share capital.


Article 28 - Attendance at general meetings

General meetings are convened in accordance with the applicable legal stipulations.

In order to be allowed to attend the meeting the holders of registered shares must at the latest five days before the meeting have informed the board of directors in writing of the number of securities for which they intend to participate in the vote, and the holders of bearer shares must have deposited their securities at the registered office or at one of the establishments designated in the convening notices within the same period of time.

Article 29 - Representation

Every shareholder can give another shareholder the power to represent him.

However, underage children, persons under judicial disability and other incapable persons as well as legal entities can be represented by a mandatary who is not a shareholder; a shareholder can also be represented by his/her spouse who is not a shareholder.

Co-owners as well as creditors and pledgors must be represented by one and the same person. Holders of the bare ownership of shares will represent the holders of the usufruct, unless agreed or stipulated otherwise in the legal instrument establishing the usufruct.

Article 30 - Voting method - Vote by correspondence

Votes take place by show of hands or by roll call. However, all votes, including the election of directors, will take place by means of a secret ballot if so requested by two shareholders.

Any shareholder can vote by correspondence at any general meeting by means of a form containing (i) the name and the address or the registered office of the shareholder, (ii) the number of securities for which he participates in the vote and (iii) the indication, for each item of the agenda, of the way in which he wishes to vote or of his decision to abstain from voting.

The stipulations of article 28 of the present articles of association are applicable to the vote by correspondence.

Article 31 - Officers

All general meetings are chaired by the chairman of the board of directors or, in his absence, by the director designated for that purpose by the other directors.

The chairman designates the secretary, who need not be a member of the general meeting.

The assembly elects two vote counters from among the shareholders.

Article 32 - Deliberations

The general meeting only deliberates and decides on the items listed on the agenda, unless all shareholders are present or represented and unanimously agree to deliberate and decide on new items.

Unless in the cases provided for by law, the meeting decides validly regardless of the number of shares represented, and the decisions are taken by a majority of votes, whereby the votes of the abstaining shareholders are not counted.

Each share gives the right to one vote.


In case of elections, if none of the candidates acquires an absolute majority, a second vote takes place between the two candidates who acquired the largest number of votes. In case of an equality of votes after that second vote, the oldest of the candidates is elected.

The shareholders can unanimously take all decisions that fall within the powers of the general meeting in writing, with the exception of the decisions which must be recorded in an authentic deed.

Article 33 - Minutes

The minutes are signed by the officers as well as by the shareholders who request to do so.

The copies or extracts of the minutes which must be presented in court or elsewhere are signed by a director.

Article 34 - Adjournements

Without prejudice to the right of adjournement provided for in article 555 of the Code of Companies, the board of directors can adjourn by three weeks the deliberations of any ordinary, special or extraordinary general meeting with regard to all or part of the agenda.

Such adjournement cancels all decisions taken.

Securities can again be deposited with a view to the second meeting.

Chapter V - Holders of bonds and warrants

Article 35 - Right to attend general meetings

The holders of bonds or warrants are entitled to attend the general meeting of shareholders, but only have an advisory vote.

In order to attend the meetings they will have to comply, mutatis mutandis, with the provisions of articles 28 and 29 of the present articles of association.

Article 36 - Officers

The general meetings of bondholders take place in accordance with the provisions of articles 569 et seq. of the Code of Companies.

The provisional officers of the bondholders’ meetings are the ones referred to in article 31 of the present articles of association.

The meeting itself elects the final officers.

Chapter VI - Inventory and annual accounts

Article 37 - Company documents

The financial year begins on the first of January and ends on the thirty-first of December of each year.

At the end of the financial year, the board of directors draws up an inventory as well as the financial statements.


Article 38 - Appropriation of the net profits

The annual net profits of the company are determined in accordance with the relevant legal stipulations and regulations.

Initially, at least five per cent of the net profits are used to constitute the legal reserve; this deduction ceases to be obligatory as soon as the reserve fund equals one tenth of the share capital.

The balance is put at the disposal of the general meeting, which determines its appropriation on the proposal of the board of directors.

Article 39 - Payment of dividends - Interim dividends

Dividends are paid every year at the time and place determined by the board of directors.

The board of directors may decide on the payment of interim dividends; this payment can only be made by means of the profits of the current financial year, possibly decreased by the loss carried forward or increased by the profit carried forward. The use of reserves constituted or to be constituted pursuant to a legal provision or a stipulation of the present articles of association is not allowed.

Chapter VII - Dissolution - Liquidation

Article 40 - Dissolution

In case of dissolution of the company, the liquidation takes place in accordance with the procedure indicated by the general meeting, which appoints the liquidators.

The general meeting has the most extensive rights to determine the powers of the liquidators and their fees and to grant them discharge, even in the course of the liquidation.

The copies or extracts of the reports of the deliberations which are to be presented in court or elsewhere are validly signed by the liquidators or by one among them.

Article 41 - Distribution

After the settlement of the liabilities the balance of the assets will be distributed in equal parts among all shares, provided that they have all been paid up to the same extent.

Chapter VIII - Various stipulations

Article 42 - Election of domicile

Every shareholder, director, bond holder, auditor or liquidator of the company who is not a resident of Belgium has the obligation to elect a domicile in Belgium. If he fails to do so, he will be considered having elected domicile at the registered office, where all announcements, writs, summons and legal notifications will be validly sent to him.


Article 43 - Composition of the capital

Upon incorporation of the company on the twenty-first of March nineteen hundred and eighty-eight the share capital amounted to 5,000,000 (five million) Belgian francs, represented by 5,000 (five thousand) shares without indication of nominal value; these shares were subscribed for in cash and fully paid up.

By decision of the extraordinary general meeting of the twenty-ninth of April nineteen hundred and eighty-eight the capital was brought to 1,120,778,000 (one billion one hundred and twenty million seven hundred and seventy-eight thousand) Belgian francs by means of an increase by 1,115,778,000 (one billion one hundred and fifty million seven hundred and seventy-eight thousand) Belgian francs by way of compensation for several contributions in kind, with creation of 1,115,778 (one million one hundred and fifteen thousand seven hundred and seventy-eight) shares, fully paid up.

Following the extraordinary general meeting of the seventeenth of March nineteen hundred and eighty-nine the capital was decreased from 1,120,778,000 (one billion one hundred and twenty million seven hundred and seventy-eight thousand) Belgian francs to 560,389,000 (five hundred and sixty million three hundred and eighty-nine thousand) Belgian francs, without settlement of losses, by means of transfer of an amount equivalent to an unavailable reserve account, in order to reduce the accounting par value of the shares of the company with a view to the realisation of division and merger transactions.

The same meeting then brought the capital to 5,000,000,000 (five billion) Belgian francs, partly by means of an increase by 1,143,697,000 (one billion one hundred and forty-three million six hundred and ninety-seven thousand) Belgian francs by way of compensation for several contributions in kind, with creation of 2,287,394 (two million two hundred and eighty-seven thousand three hundred and ninety-four) shares, fully paid up, and partly by means of a withdrawal from the unavailable issue premium account of an amount of 3,295,914,000 (three billion two hundred and ninety-five million nine hundred and fourteen) Belgian francs.

Following the decisions taken by the extraordinary general meeting of the twentieth of March nineteen hundred and ninety-one the capital was brought to 5,002,500,000 (five billion two million five hundred thousand) Belgian francs, partly by means of an increase by 2,422,200 (two million four hundred and twenty-two thousand two hundred) Belgian francs by way of compensation for a contribution in kind through a merger, with creation of 1,650 (one thousand six hundred and fifty) shares, fully paid up, and partly by means of a withdrawal from the unavailable issue premium account of an amount of 77,800 (seventy-seven thousand eight hundred) Belgian francs.

Following the extraordinary general meeting of the thirtieth of June nineteen hundred and ninety-three the capital was brought to 5,100,000,000 (five billion one hundred million) Belgian francs, partly by means of an increase by 96,864,512 (ninety-six million eight hundred and sixty-four thousand five hundred and twelve) Belgian france by way of compensation for a contribution in kind through a merger, with creation of 65,984 (sixty-five thousand nine hundred and eighty-four) shares, fully paid up, and partly by means of a withdrawal from the unavailable issue premium account of an amount of 635,488 (six hundred and thirty-five thousand four hundred and eighty-eight) Belgian francs.

Following a decision of the general meeting of the twenty-eighth of June nineteen hundred and ninety-nine the share capital was brought to 11,755,680,000 (eleven billion seven hundred and fifty-five million six hundred and eighty thousand) Belgian francs, following a merger, by means of the creation of 1,188,176 (one million one hundred and eighty-eight thousand one hundred and seventy-six) new shares, fully paid up, without indication of nominal value.


Following a decision of the general meeting of the twenty-ninth of December two thousand the share capital was brought to eleven billion eight hundred and nine million and sixty-one thousand (11,809,061,000) Belgian francs, following a merger, by means of the creation of fifty-three thousand three hundred and eighty-one (53,381) new shares, fully paid up, without indication of nominal value.

By decision of the extraordinary general meeting of the twenty-ninth of June two thousand and one, the share capital was brought to eleven billion eight hundred and nineteen million five hundred and ninety thousand seven hundred Belgian francs (11,819,590,700 BEF), by incorporation of available reserves for an amount of ten million five hundred and twenty-nine thousand seven hundred Belgian francs (10,529,700 BEF), without creation of shares; the capital was subsequently converted into euros, i.e. two hundred and ninety-three million euros (293,000,000 EUR).

EXHIBIT 3.7

AB INBEV FRANCE

Simplified Joint-Stock Company

With capital of 15,200,000 euros

Headquarters in LA MADELEINE (59110)

Immeuble Crystal

ZAC EURALILLE ROMARIN

Avenue de la République

38 Allée Vauban

SIREN 321 336 208

LILLE TRADE AND COMPANIES REGISTRY

 

 

ARTICLES OF INCORPORATION

Updated on 29 JUNE 2009


TITLE I

FORM—NAME—HEADQUARTERS—PURPOSE—DURATION

ARTICLE 1—Form

The Company was originally set up as a corporation in accordance with a private agreement dated in Lille on 22 December 1980 and 20 January 1981, registered with the Receiver of Taxes of Lille Nord on 29 January 1981, form 87 box 15.

By decision of the sole shareholder on 28 June 2002, it was changed into a simplified joint-stock company.

It is governed by the legal provisions applicable to simplified joint-stock companies and by these articles of incorporation.

It operates in the same form regardless of whether there are one or more partners.

It cannot make a public offering in its current form as a simplified joint-stock company.

ARTICLE 2—Company Name

The company name is:

“AB INBEV FRANCE”

In all the deeds and documents issued by the Company, the company name must be immediately preceded or followed by the words, “simplified joint-stock company,” or the initials, “S.A.S.,” and the indication of the capital stock.

 

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ARTICLE 3—Company’s Headquarters

The company’s headquarters is located at:

Immeuble Crystal

ZAC EURALILLE ROMARIN

Avenue de la République - 38 Allée Vauban

59110 LA MADELEINE

ARTICLE 4—Purpose

The Company’s direct or indirect purpose, both in France and abroad, is:

 

 

the production and distribution of beer, beverages and any other food products, as well as the planning and development, in whole or in part, of facilities for the manufacturing and distribution of the aforementioned products;

 

 

the trading of materials and other non-food products related to the distribution of the above-mentioned products;

 

 

the planning, creation, operation, financing, acquisition, management and control of any commercial, industrial, agricultural or real estate enterprises through creation of new companies, contributions, subscription of company stock or rights, merger, joint investments or otherwise;

 

 

the management of its equity interests and the providing of financial, technical, administrative and commercial assistance to its subsidiaries;

 

 

the acquisition and management, by leasing or any other means, of all real estate

and more generally any industrial, commercial or financial transactions, whether involving chattel or real property, that may be related directly or indirectly to the corporate purpose or to any similar or related purposes, the participation of the Company in any French or foreign enterprises or companies, existing or to be created, that may be related

 

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directly or indirectly to the corporate purpose or to any similar or related purposes, particularly to enterprises or companies whose purpose would be likely to facilitate the achievement of the corporate purpose, and with this to be achieved by any means, particularly through contribution, subscription or purchase of stock, company shares or founder’s shares, merger, joint ventures, alliances or partnerships.

ARTICLE 5—Duration

The Company, barring extension or early dissolution, has a duration of 99 years from the date of its registration in the Trade and Companies Registry.

Decisions on extension of the Company’s duration or its early dissolution are made by joint decision of the partners or by decision of the sole partner.

TITLE II

CONTRIBUTIONS—CAPITAL STOCK—TYPE OF SHARES—SHARE-RELATED RIGHTS AND OBLIGATIONS

ARTICLE 6—Contributions

 

I At the time of its formation, the Company received a contribution in the amount of 120,000 francs, equivalent to the par value of 1,000 shares, all registered, comprising the original capital stock, as well as the corresponding premium of 20 francs per share.

 

II In accordance with a private agreement dated 12 June 1981, the Company received a contribution from both the company “ARTOIS INTERBREW” and the “MOTTE CORDONNIER Breweries and Malteries corporation” of equity shares in the estimated total amount of 27,963,865 francs; this contribution was approved by the extraordinary general shareholders’ meeting of 20 July 1981, which created 233,030 new shares of 100 francs each as compensation for this contribution. This transaction generated a contribution premium of 4,660,865 francs.

 

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III In accordance with private agreements dated 13 November 1981, the Company received contributions from both the “MOTTE CORDONNIER Breweries and Malteries corporation” and the company “BRASSERIES LORRAINES” of all their industrial and commercial assets relating to their “beer and beverage manufacturing and distribution” business, with a total estimated value of 84,916,919.55 francs.

These contributions were approved by the extraordinary general shareholders’ meeting of 29 December 1981, which created 707,640 new shares of 100 francs each as compensation for these contributions; this transaction generated a contribution premium of 14,152,919.55 francs.

 

IV By decision of the same extraordinary general shareholders’ meeting of 29 December 1981, a contribution was made in the amount of 24,999,600 francs, equivalent to the par value of 208,330 new registered shares, as well as the corresponding premium of 5.00 francs per share.

 

V By decision of the extraordinary general meeting of 8 November 1983, a contribution was made in the amount of 34,500,000 francs, equivalent to the par value of 287,500 new registered shares.

 

VI In accordance with a private agreement dated in LILLE on 8 November 1983, the Company received a contribution from the company “Anciennes BRASSERIES LORRAINES” of equity shares with an estimated value of 2,580,000 francs; this contribution was approved by the extraordinary general meeting of 15 March 1984, which created 21,500 new shares of 120 francs each as compensation for this contribution.

 

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VII By decision of the extraordinary general meeting of 28 May 1986 and the board of directors’ meeting of 9 July 1986, a contribution was made in the amount of 15,006,600 francs, equivalent to the par value of 125,055 new registered shares.

 

VIII By decision of the extraordinary general meeting of 28 May 1986 and the board of directors’ meeting of 9 July 1987, a contribution was made in the amount of 25,920,840 francs, equivalent to the par value of 216,007 new registered shares.

 

IX In accordance with a private agreement dated 20 and 22 February 1989, the Company received a contribution from the company JUPILER FRANCE of its “distributions to warehouse operators” line of business, with a total estimated value of 11,736,138 francs. This contribution was approved by the extraordinary general shareholders’ meeting of 2 May 1989, which created 16,134 new shares of 120 francs each as compensation for this contribution; this transaction generated a contribution premium of 9,800,058 francs.

 

X In accordance with a private agreement dated 13 February 1990, the Company received a contribution from the company “ANCIENNES BRASSERIES MOTTE CORDONNIER” of 12,712 shares held thereby in the company “CAVES GAMBRINUS,” which had an estimated value of 7,416,000 francs. This contribution was approved by the general shareholders’ meeting of 30 April 1990, which created 61,800 new common shares of 120 francs each as compensation for this contribution; this transaction did not generate a contribution premium.

In accordance with a private agreement dated 13 February 1990, the Company received contributions from the companies “BRASSERIE NOUVELLE DE LUTECE” and “ENTREPOTS DU SUD OUEST PARISIEN” through the merger of all their net assets, which had a total estimated value of 81,252,374 francs. These contributions were approved by the extraordinary general shareholders’ meeting of 30 April 1990, which created 326,205 new common shares of 120 francs each as compensation for these contributions; these transactions generated a total merger premium of 10,064,897 francs. In addition, it carried out a reduction in the capital stock by cancellation of 279,000 of its B preferred treasury shares

 

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which were contributed to it by the company “BRASSERIE NOUVELLE DE LUTECE,” equivalent to a total amount of 33,480,000 francs.

 

XI The extraordinary general meeting of 30 September 1991 decided to reduce the capital stock by the amount of 19,252,010 francs through the reduction of the par value of the shares, which was reduced from 120 francs to 110 francs.

In accordance with a private agreement dated 1 August 1991, the Company received contributions from the company “ANCIENNES BRASSERIES MOTTE CORDONNIER” through the merger of all its net assets, which had a total estimated value of 128,801,971.86 francs. These contributions were approved by the extraordinary general shareholders’ meeting of 30 September 1991, which created 1,170,598 new common shares of 110 francs each as compensation for these contributions; these transactions generated a merger premium of 36,191.86 francs.

 

XII The extraordinary general meeting of 10 August 1994 contributed the amount of 40,864,450 francs, equivalent to the par value of 371,495 new registered shares.

 

XIII In accordance with a private agreement in ARMENTIERES dated 15 November 1999, the Company received a contribution from the company BOISSONS SERVICE through the merger of all its net assets, which had a total estimated value of 934,159 francs. This contribution was approved by the extraordinary general shareholders’ meeting of 31 December 1999, which generated a merger capital loss of 4,165,291 francs. No capital increase was carried out.

 

XIV By combined general meeting of 29 June 2001, the capital stock was converted into euros and was increased by the amount of 364,634 francs, by incorporation of that amount after withdrawal from the “Retained Earnings” line item in order to round off its amount.

 

XV As a result of decisions made by the sole partner on 19 December 2008, the capital was increased in the amount of 124 million euros through creation of 12,400,000 new shares of 10 euros, then reduced by 167 million euros through cancellation of 16,700,000 shares of 10 euros in order to eliminate the losses for the current year.

 

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ARTICLE 7—Capital Stock

The capital stock is fixed at the amount of FIFTEEN MILLION TWO HUNDRED THOUSAND (15,200,000) euros, divided into ONE MILLION FIVE HUNDRED TWENTY THOUSAND (1,520,000) shares with a par value of TEN (10) euros.

ARTICLE 8—Changes in the Capital Stock

The capital may only be increased or reduced by a joint decision of the partners or by decision of the sole partner, approving the report from the Executive Council upon the proposal of the Chairman.

The partners may delegate to the Chairman or the Chief Executive Officer the necessary powers for increasing or reducing the capital, pursuant to the conditions and periods of time stipulated by law.

In the event of a capital increase in cash, the partners have a preferential right, in proportion to the amount of their shares, to subscription of the cash shares issued to carry out a capital increase. However, the partners may individually waive their preferential subscription right and the capital increase decision may eliminate this preferential right under the conditions stipulated by law.

The new cash shares must be paid up at the time of the subscription of the nominal (or par) capital portion stipulated by law and, if applicable, the entire issue premium.

ARTICLE 9—Type of Shares

The shares must be registered. They are entered in the ledger in accordance with the regulations in force and applicable common practice.

 

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Any partner may ask the Company to issue a certification of entry in the ledger.

ARTICLE 10—Share-Related Rights and Obligations

 

1. Any share gives a right to the earnings and corporate assets, in a net share proportional to the amount of capital that it represents.

To determine this, it will be grouped together, where applicable, with any tax exemptions and any taxes that might be incurred by the Company and to which distributions in favor of the shares might give rise.

 

2. The partners only bear the losses to the extent of their contributions.

 

3. Shares are indivisible with regard to the Company. The undivided co-owners must be represented at the Company by one of them or by a court-appointed sole agent in the event of disagreement.

 

4. The voting rights attached to carved-up shares belong to the bearer for all joint decisions, with the exception of those involving the allocation of earnings for the year, which is reserved to the beneficial owner.

 

5. Whenever it is necessary to hold several shares to exercise any right whatsoever, the holders of single shares or those numbering less than the required amount may only exercise this right on condition that they have taken personal responsibility to combine them and possibly purchase or sell the necessary number of shares or securities.

TITLE III

TRANSFER OF SHARES

Shares are freely transferable.

 

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TITLE IV

ADMINISTRATION AND MANAGEMENT OF THE COMPANY

ARTICLE 11—Company Chairman

The Company is represented, managed and administered by a Company Chairman, who may be an individual or legal entity and may or may not be a partner.

11.1 Appointment

The Chairman is appointed by decision of the sole partner or by a joint decision of the partners for a specific or indeterminate term set thereby. He may also be named by decision of the Executive Council.

In the absence of a decision to the contrary and in the case of an appointment for a specific term, his duties end following the approval of the prior year’s financial statements taking place in the year in which his term expires.

No age limit is stipulated for holding the position of Chairman.

When the Chairman is a legal entity, the latter must appoint an individual as permanent representative.

11.2 Dismissal at Will

The Chairman may be dismissed at any time, without the need for just cause, by decision of the sole partner or by joint decision of the partners. He may also be dismissed by decision of the Executive Council.

This dismissal does not give entitlement to any compensation.

11.3 Compensation

The Chairman’s compensation is set by decision of the partner(s) or the Executive Council.

 

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If the Chairman is an individual, he may hold his position concurrently with an employment agreement.

11.4 Powers

The Chairman manages the Company and represents it in dealings with third parties. In this regard, he is vested with all the necessary powers to act on the Company’s behalf under all circumstances, within the limit of the company purpose and the powers expressly reserved for joint decision of the partners pursuant to legal provisions and these articles of incorporation.

However, with regard to internal regulations not binding on third parties, it is expressly agreed that each of the following acts:

 

 

the purchase, contribution, sale or exchange of real property, shares or equity stakes, a debt or goodwill;

 

 

a loan, borrowing, security, endorsement or guarantee, unless it has been extended to or by one of the group’s companies or to the tax or customs authorities;

 

 

powers of attorney given in order to carry out these transactions;

must be authorized by the Executive Council whenever the amount of the transaction, per action, is equal to or greater than the amount set by the appointment decision or by any other subsequent decision of the partner(s) or the Executive Council.

11.5 Delegation of Powers

The Chairman may, at his discretion, delegate any powers to any third parties for one or more specific purposes.

ARTICLE 12—Chief Executive Officer

12.1 Appointment

Upon proposal by the Chairman, the sole partner or all the partners together may name a Chief Executive Officer, an individual responsible for assisting the Chairman. He may also be named by decision of the Executive Council upon proposal by the Chairman.

The Chief Executive Officer’s term of office is set in the appointment decision and may not exceed the Chairman’s term of office.

However, in the event that the Chairman ceases to serve, the Chief Executive Office remains in office until the naming of the new Chairman, in the absence of a decision to the contrary by the partner(s) or Executive Council.

No age limit is stipulated for holding the position of Chief Executive Officer.

 

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12.2 Dismissal at Will

The Chief Executive Officer may be dismissed at any time, without the need for just cause, by decision of the sole partner or by joint decision of the partners, or else by decision of the Executive Council.

This dismissal does not give entitlement to any compensation.

12.3 Compensation

Compensation may be allocated to the Chief Executive Officer for his work. This compensation is set by the partner(s) or the Executive Council.

The Chief Executive Officer may hold his position concurrently with an employment agreement.

12.4 Powers

The Chief Executive Officer has the same powers as the Chairman, subject to the limitations that may be set by the appointment decision or by a subsequent decision.

The Chief Executive Officer has the power to represent the company in dealings with third parties.

 

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12.5 Delegation of Powers

The Chief Executive Officer may, at his discretion, delegate any powers to any third parties for one or more specific purposes.

ARTICLE 13—Executive Council

13.1 Composition

An Executive Council has been set up to consist of at least three members and at most six members, individuals or legal entities, all appointed by decision of the sole partner or by joint decision, for a specific or indeterminate term, which is freely set, without age limit. They may be freely dismissed under the same conditions as their appointment.

The members of the Executive Council may have an employment agreement with the Company.

The Chairman, or his representative in the case of a legal entity, and the Chief Executive Officer are members of the Executive Council as of right.

13.2 Executive Council Meetings

The Executive Council meets as often as required for the Company’s interests. The members of the Executive Council are called to meetings with sufficient notice by any means, even orally, by the Chairman or by any sitting member. The call to meeting contains the agenda, which shall only be illustrative.

The Executive Council meetings are held at the company’s headquarters or at any other place indicated in the call to meeting. However, meetings by teleconference or videoconference may be considered to be validly held.

Deliberations of the Executive Council are only valid if half of its members are present or represented. However, the physical presence of the members is not

 

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mandatory and they may participate in the meeting through any appropriate communications medium. Moreover, each member may be represented by another member without any limitation on the number of proxies that each attending member may receive. Any person not on the Executive Council may be invited to participate during all or part of the meeting with the Chairman’s approval.

Decisions are adopted by the majority of the attending or represented members, each member having one vote.

The Executive Council’s deliberations are recorded in the minutes signed by the Chairman and an attending member. They are kept at the Company’s headquarters in a file arranged in chronological order.

The minutes of Executive Council meetings are legally certified when signed by the Chairman.

13.3 Role and Powers of the Executive Council

The Executive Council defines the strategic directions and assists the Chairman in the Company’s daily management. It is also vested with ongoing oversight power over the Company’s management.

In this regard, each member, other than the Chairman, may ask the latter at any time to furnish any document or any information that is deemed useful.

Within the scope of its assignment, it gives the necessary authorizations to the Chairman or Chief Executive Officer to conduct the extraordinary transactions listed in Article 11 of these articles of incorporation.

The Executive Council has the competence to define, revoke and set the powers and compensation of the Chairman and Chief Executive Officer.

 

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TITLE V

AGREEMENTS BETWEEN THE COMPANY AND ITS EXECUTIVES-STATUTORY AUDITORS

ARTICLE 14—Agreements between the Company and its Executives or a Partner Holding

more than 5% of the Voting Rights

Any agreement reached, directly or through a person serving as an intermediary between the Company and its Chairman, its Chief Executive Officer, one of its executives, one of its partners holding a fraction of the voting rights greater than 5% or, in the case of an associated company, the Company controlling it within the meaning of Article L.233-3 of the Commercial Code must be brought to the attention of the Statutory Auditors within one month after it is reached.

The Statutory Auditors present the partners with a report on the agreements reached and executed during the past year. The partners approve this report at the time of the joint decision to approve the financial statements for that year.

Agreements not approved nevertheless take effect, and the interested party is liable for bearing the resulting losses to the Company.

However, when the Company only has a sole partner, a report is not prepared by the Statutory Auditor(s). In this situation, notice of any agreement reached directly or by a person serving as an intermediary between the Company and the Chairman, Chief Executive Officer or another member of the Executive Council or, in the case of legal entities, their executives and, where applicable, their permanent representative, must be given within one month after it is reached, by the Chairman or the executive involved to the sole partner in order to receive his approval. This approval is sufficiently given by the annotation of the agreements in question in the register of decisions of the sole partner.

The preceding provisions are not applicable to agreements involving the Company’s routine transactions and entered into under normal conditions, which are communicated to the Statutory Auditors. Any partner has the right to receive communications thereof.

 

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In any event, the Chairman, when an individual, and the Chief Executive Officer are prohibited, under penalty of the nullity of the agreement, from contracting, in any manner whatsoever, for loans to the Company, having an overdraft approved by it, in a checking account or otherwise, or having securities or endorsements furnished by it for their commitments to third parties.

ARTICLE 15—Statutory Auditors

The partners jointly appoint one or more regular Statutory Auditors and one or more alternate Statutory Auditors for the term, under the conditions and with the assignment stipulated by law, particularly with regard to the auditing of the company’s financial statements.

ARTICLE 16—Company Representation

The delegates of the Works Council exercise the rights set forth in Article L. 432-6 of the Labor Code with regard to the Chairman or Chief Executive Officer.

At least twice a year, the Chairman or Chief Executive Officer shall organize a meeting to which the Works Council representatives shall be invited. The Chairman or Chief Executive Officer may invite any person, whether or not a member of the Executive Council, and in particular the Statutory Auditor(s), to participate in this meeting.

The purpose of one of these meetings shall be to examine the Company’s balance sheet, financial statements and management report, which shall be submitted to the sole partner or the partners at the time of the approval of the financial statements.

The purpose of another meeting shall be to examine the interim management documents if the Company is required by law to prepare them.

 

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TITLE VI

DECISIONS OF THE SOLE PARTNER OR THE PARTNERS

ARTICLE 17—Competence—Mandatory Decisions

The sole partner or the partners jointly are solely competent to make the following decisions:

 

 

transformation of the Company;

 

 

changes to the capital stock: increase, amortization and reduction;

 

 

merger, demerger, partial business transfer;

 

 

dissolution;

 

 

appointment of the Statutory Auditors;

 

 

approval of the annual financial statements and allocation of net income;

 

 

approval of the agreements entered into between the Company and its executives or partners;

 

 

amendments to the articles of incorporation;

 

 

appointment of the Liquidator and decisions regarding liquidation transactions.

The appointment, compensation and dismissal of the Chairman, Chief Executive Officer and other members of the Executive Council are within the competence of the partner(s). However, in accordance with the provisions of Articles 11, 12 and 13 of these articles of incorporation, these decisions may also be made by the Executive Council when they concern the Chairman and/or Chief Executive Officer.

All other decisions are within the competence of the Chairman, under the oversight of the Executive Council in accordance with the provisions mentioned above in Title IV.

ARTICLE 18—Decisions of the Sole Partner

The sole partner exercises the powers vested by law in the partners jointly; he may delegate his powers. His wishes are expressed by the decisions recorded in the minutes prepared in chronological order in a register, numbered and initialed under the same conditions as the meeting registers and signed by him.

 

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Copies or extracts of decisions of the sole partner are legally certified when signed by the Chairman or Chief Executive Officer.

ARTICLE 19—Joint Decisions of the Partners

Except when unanimity is required by law, joint decisions of the partners are adopted by a majority vote of the attending or represented partners with voting rights.

The share-related voting right is proportional to the amount of capital that they represent. Each share gives the right to at least one vote.

Joint decisions are made on convening by or at the initiative of the Chairman or any partner holding more than one-third of the shares.

Joint decisions are made at general meetings, by written consultation or by official document signed by all the partners.

Copies or extracts of the decisions of the sole partner are legally certified when signed by the Chairman or Chief Executive Officer.

During the Company’s liquidation period, joint decisions are made on convening by or at the initiative of the Liquidator.

Any partner has the right to take part in joint decisions, personally or by proxy, regardless of the number of shares held. He must provide documentation of his identity and the entry of his shares in the register as of the date of the joint decision.

19.1 General Meetings

The partners come together at a meeting convened by the Chairman or the statutory auditor(s) in emergencies or by a partner holding more than one-third of the shares, at the company’s headquarters or any other place mentioned in the notice of meeting.

 

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According to Article L. 432-6-1 of the Labor Code, the Work Council may take legal action for the appointment of a representative empowered to convene the general partners’ meeting in emergencies.

The notice of meeting is given by any written communication means at least four (4) days before the meeting date. It indicates the agenda.

However, the meeting may be held without delay if all the partners agree to it.

The meeting is chaired by the Chairman or, in his absence, by a partner appointed by the meeting.

The partners may be represented in the meeting’s deliberations by another partner or by a third party.

Proxies may be given by any written means, particularly by fax.

Joint decisions made at the meeting must be recorded in writing in the minutes prepared in a special register or on numbered loose sheets.

The minutes are signed by the meeting’s Chairman or by the attending partners. The minutes must indicate the date and place of the meeting, the first and last names and position of the session’s Chairman, the identity of the attending or represented partners, the documents and information communicated beforehand to the partners, a summary of the discussions, as well as the text of the resolutions put to a vote and the indication of how each partner voted on each resolution.

19.2 Written Consultation

All the joint decisions may be made by written consultation organized by the person with the capacity to convene the general meeting.

The consultation sets the response period, which cannot be less than FIVE (5) days. The Chairman prepares minutes that are transcribed in the register mentioned above.

 

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19.3 Official Documents

All joint decisions may be made by official document signed by all the partners.

In the case of a joint decision made by the unanimous consent of all the partners, as expressed in an official document, this document must mention the documents and information communicated beforehand to the partners. It is signed by all the partners and is transcribed in the special register or on the numbered loose sheets mentioned above.

19.4 Teleconference (telephone or audiovisual)

When the deliberations are held by teleconference, the Chairman, on the day of the meeting, prepares, dates and signs a copy of the session’s minutes containing:

 

 

the identity of the partners voting and, if applicable, of the partners represented thereby,

 

 

the identity of the partners not taking part in the deliberations (not voting),

 

 

and for each resolution, the identity of the partners with the indication of their respective votes (adoption or rejection).

The Chairman immediately sends a copy by fax or any other means to each of the partners. The voting partners return a signed copy of it to the Chairman on the same day by fax or any other means. In the case of proxy, evidence of the proxy is also sent on the same day to the Chairman, by fax or any other means.

Evidence of the sending of the minutes to the partners and the return copies signed by the partners, as indicated above, are kept at the company’s headquarters.

ARTICLE 20—Prior Information from the Partner(s)

Regardless of the type of consultation, any decision by the partner(s) must be the subject of prior information consisting of all the documents and information enabling the partners to come to a fully informed decision on the resolution(s) submitted for their approval.

 

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When joint decisions must be made pursuant to law or the report(s) from the Executive Council and/or the Statutory Auditors, the report(s) must be communicated to the partners four (4) days prior to the date on which the minutes of the partners’ decision are prepared.

The partners may at any time, as long as it does not impede the Company’s operations, consult the company’s headquarters and, if applicable, make a copy of the company registers, inventory and annual financial statements for the last three years, the income statements for the last five years, the consolidated financial statements, if any, and the reports of the Executive Council and the Statutory Auditors.

With regard to the joint decision approving the annual financial statements, the partners may be provided with the annual financial statements and, if applicable, the consolidated statements for the past year, at the Company’s expense.

When the Company has only one partner, he has the right to the same documents.

TITLE VII

FISCAL YEAR—ANNUAL FINANCIAL STATEMENTS—ALLOCATION OF NET INCOME

ARTICLE 21—Fiscal Year

The fiscal year starts on 1 January and ends on 31 December of each year.

ARTICLE 22—Preparation and Approval of the Annual Financial Statements

The Chairman prepares the draft annual financial statements for the year and, if applicable, the consolidated financial statements. He prepares the management report on the Company’s position during the past year, as well as its projected growth. The financial statements and the report are submitted to the Executive Council, which prepares the definitive documents.

 

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In accordance with legal provisions, within six (6) months of the end of the year, the partner(s) must approve the annual financial statements, in view of the management report from the Executive Council and the report(s) from the Statutory Auditor(s).

When consolidated financial statements are prepared, they are presented with the group’s management report and the Statutory Auditors’ reports, at the time of this decision.

ARTICLE 23—Allocation and Distribution of Net Income

 

1. Any share in the absence of share categories and any share of a same category in the opposite situation, gives the right to a net share, proportional to the amount of capital that it represents, of the earnings and reserves or the net assets, both during the life of the Company and in the event of liquidation. Each share bears the corporate losses in the same proportions.

 

2. After approval of the financial statements and the recording of the existence of distributable earnings, the partners decide on its distribution, in whole or in part, or its allocation to one or more reserve items for which they determine the allocation and use.

 

3. The partners may jointly decide to distribute any amount taken from retained earnings or available reserves, expressly indicating the reserve items from which these withdrawals are made. However, dividends are taken by priority from the distributable earnings for the year.

The joint decision by the partners or, in the absence thereof, the decision by the Chairman, sets the terms and conditions for the payment of dividends.

TITLE VIII

DISSOLUTION-LIQUIDATION OF THE COMPANY

ARTICLE 24—Dissolution-Liquidation of the Company

The Company is dissolved in the cases set forth by law or in the case of early dissolution by joint decision by the partners.

The joint decision by the partners noting or deciding on the dissolution names one or more Liquidators.

The Liquidator, or each of them if there are several, represents the Company. He has the broadest powers to dispose of the assets, even on an amicable basis. He is empowered to pay the company’s debts and to distribute the available balance among the partners.

The partners may authorize the Liquidator to continue the ongoing corporate business and to engage in new business for the sole purposes of the liquidation.

 

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The net proceeds from the liquidation, after discharge of the liabilities, are used for the redemption in full of the capital stock paid-in and not amortized.

The surplus, if any, is distributed among the partners in proportion to the number of shares held by each of them.

The losses, if any, are borne by the partners up to the amount of their contributions.

If all the shares are held by one entity, the Company’s dissolution results in the universal conveyance of the net assets to the sole partner, when the sole partner is a legal entity, without a liquidation taking place, in accordance with the provisions in Article 1844-5 of the Civil Code.

TITLE IX

DISPUTES

ARTICLE 25—Disputes

Disputes regarding company business, arising during the life of the Company or during its liquidation, among the partners, the executives and the Company, or between a partner and the Company, shall be adjudicated in accordance with the law and under the jurisdiction of the competent courts.

 

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EXHIBIT 3.8

ARTICLES OF ASSOCIATION : InBev Nederland N.V., established at Breda.

NAME, REGISTERED OFFICE, TWO-TIER STATUS AND OBJECTS

Article 1

 

  1. The company has the name : InBev Nederland N.V.

 

  2. It is established at Breda.

Article 2

The company is a statutory two-tier company. Articles 158 to and including 161a and article 164, Volume 2 of the Civil Code are applicable to the company.

Article 3

The company has the following objects :

 

  a. the operation of breweries, the production of other alcoholic and non-alcoholic beverages, and the marketing of alcoholic and non-alcoholic beverages, extracts, goods for the (luxury) food sector, necessities for the catering industry and service articles for retail trade, including equipment and furniture, as well as packaging materials;

 

  b. the acquisition, operation, hiring, letting, taking on lease and leasing out and the disposal of registered property, the acquisition, operation and management of securities, claims, movable property, intellectual and industrial property rights and unpatented know-how as well as of other assets, the investment of money and other funds in the above-mentioned items, either or not covered by a mortgage or any other collateral;

 

  c. the performance, both on an international and on a national level, of the activities of forwarding agencies, including customs agencies;

 

  d. the participation in and cooperation with other enterprises and companies, as well as the management and the funding of such enterprises and companies both at home and abroad, or the acquisition, in any other way, of commercial or financial interests in other enterprises and companies established at home and abroad, including standing surety or assuming liability in any other way, or providing security for the debts of such enterprises and companies; and

 

  e. furthermore, any activities relating to or favourable for the foregoing in the broadest sense.

CAPITAL AND SHARES

Article 4

 

  1. The company’s share capital amounts to forty-six million six hundred and eighteen thousand one hundred and ninety-three euro and thirty cents (EUR 46,618,193.30), subdivided into one million twenty-seven thousand two hundred and eighty-five (1,027,285) ordinary shares with a nominal value of forty-five euro and thirty-eight cents (EUR 45.38) each.

 

  2. The shares are registered shares and are numbered consecutively as from 1. No share certificates are issued.

 

  3. The shares are indivisible.

Article 5

 

  1. The issue of shares not yet subscribed upon incorporation (including the granting of rights to subscribe for shares), as well as the determination of the price, the conditions for the issue of shares and all relating matters takes place, subject to the provisions of the present articles of association and of the applicable laws, pursuant to a decision of the general meeting of shareholders or of any other body designated for that purpose by decision of the general shareholders’ meeting for a term of five years maximally. Upon designation the number of shares that can be issued must be determined. The designation cannot be renewed for a period exceeding five years.

 

  2. Shares are never issued below par, without prejudice to the provisions of article 80 par. 2, Volume 2 of the Civil Code.

 

  3. The company is responsible for the required publications in the trade register, as referred to in article 96 par. 3 and 4, Volume 2 of the Civil Code.


  4. The company is not allowed to grant loans, provide security, guarantee the price, warrant performance by a third party or bind itself jointly or otherwise with or for third parties with a view to the acquisition by third parties of shares in its capital or depositary receipts with respect thereto. This prohibition also applies to subsidiaries.

 

  5. Subject to the applicable legal provisions each shareholder has, upon the issue of shares, a right of first refusal in proportion to the amount of his shares in the company.

 

  6. The right of first refusal cannot be transferred.

ACQUISITION OF OWN SHARES

Article 6

 

  1. Any acquisition by the company of shares that have not been fully paid is null and void.

 

  2. The company can only acquire shares that have been paid in full, either for no consideration or if :

 

  a. the shareholders’ equity, less the acquisition price, is not lower than the paid-up and called-up part of the capital, increased by the reserves, that has to be maintained pursuant to the applicable law or the articles of association; and

 

  b. the nominal amount of the shares which the company acquires, holds or holds in pledge or which are held by a subsidiary, does not exceed one/tenth of the issued capital. A determining factor of the validity of the acquisition is the amount of the shareholders’ equity according to the most recent balance sheet, less the acquisition price of the shares in the company capital and the distribution of profits or reserves to third parties which the company and its subsidiaries were to make after the balance sheet date. If more than six months of a financial year have passed without the financial statements being prepared and approved if necessary, an acquisition pursuant to this paragraph is not allowed.

 

  3. The acquisition of fully paid own registered shares for valuable consideration is only permitted after the Board of Directors has been authorised by the general shareholders’ meeting. This authorisation can be granted for a period of eighteen months maximally. In the authorisation the general shareholders’ meeting is to determine the number of shares that can be acquired, the manner in which they can be acquired and the minimum and maximum price.

 

  4. In this article, shares also include depositary receipts for shares.

 

  5. No voting rights can be exercised with respect to own shares in the possession of the company and for own shares with regard to which the company holds a right of usufruct or a pledge or holds a depositary receipt for shares.

Furthermore, no voting rights can be exercised with respect to shares or depositary receipts for shares held by subsidiaries or with regard to which the latter hold a right of usufruct or a pledge.

Shares or depositary receipts for shares with respect to which no voting rights can be exercised are not taken into account for the determination whether a certain part of the capital is represented at the meeting and no dividend or part of the balance left after winding-up can be paid with respect to these shares or depositary receipts for shares.

SHAREHOLDERS’ REGISTER

Article 7

 

  1. The Board of Directors keeps a shareholders’ register at the company’s registered office, in which the names and addresses of all shareholders have been entered, with indication of the date on which they acquired the shares, the number of shares, the date of acknowledgement or service of the transfer of shares as well as the amount paid on each share. The shareholders’ register also includes the names and addresses of those who hold a right of usufruct or a pledge on shares, with indication of the date on which they acquired this right, the date of acknowledgement or service and an indication of whether they hold rights to depositary receipts. In addition, the names and addresses of the holders of depositary receipts for registered shares issued with the company’s concurrence are entered in the register.

 

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Any discharge from liability granted with respect to payments not yet made is also mentioned in the register.

Every shareholder, holder of depositary receipts for registered shares issued with the company’s concurrence, usufructuary and holder of a pledge has the obligation to inform the management in writing of his address and any changes therein; this address remains valid for the company as long as the person concerned does not notify the management by registered post of another address.

All consequences of the failure to inform the management of his address and changes therein are at the expense and risk of the person concerned.

All notifications and notices to shareholders, holders of depositary receipts, usufructuaries and holders of a pledge can be validly served at the addresses mentioned in the register.

All entries in the register are signed by a manager.

 

  2. The register referred to in the previous paragraph can be consulted by the shareholders as well as by usufructuaries with rights to depositary receipts and by holders of a pledge on shares with rights to depositary receipts.

Any person can consult the data contained in the register with respect to shares that are not paid up in full.

Every shareholder, usufructuary and holders of a pledge on shares can at his request and at all times, but only to the extent that it concerns his shares or rights respectively, obtain non-negotiable extracts from the register, signed by a manager, free of charge, with indication of the numbers of the shares registered in his name on the date of the extract or of the shares encumbered with a pledge or a usufruct in his favour.

If a share is encumbered with a usufruct or a pledge, the extract indicates the name of the person to whom the voting right and the rights to depositary receipts are granted.

 

  3. If a shares, a depositary receipt issued with the company’s concurrence, a usufruct or a pledge on a share belongs to a partnership to which title 7 of Volume 3 of the Civil Code applies, the partners, whose names are also to be entered in the register, can only be represented vis-à-vis the company by one person to be designated in writing.

The personal data of the designated person are entered in the register, and all notifications and notices to the partners can be served at the address of the designated person that is indicated in the register.

PLEDGE AND USUFRUCT ON SHARES

Article 8

 

  1. Shares can be encumbered with a usufruct.

The voting right is only granted to the usufructuary if this was explicitly stipulated upon the establishment of the right of usufruct.

 

  2. A shareholder who has no voting right and a usufructuary who has a voting right have the rights granted by law to the holders of depositary receipts issued with the company’s concurrence.

A usufructuary who has no voting right has these rights if not stipulated otherwise upon the establishment or the transfer of the right of usufruct.

 

  3. The shareholder is granted the rights resulting from the share and relating to the acquisition of shares, on the understanding that he is to compensate the usufructuary for the value of these rights if the latter is entitled to such a compensation pursuant to his right of usufruct.

 

  4. A pledge can be established on shares. In that case the provisions of paragraphs 1 and 2 of this article apply accordingly.

 

  5. In the present articles of association holders of depositary receipts also include the holders of depositary receipts for registered shares issued with the company’s concurrence as well as the persons who have the rights referred to in paragraphs 2 and 4 of this article as a result of a usufruct or pledge established on a share.

 

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TRANSFER OF SHARES

Article 9

The legal provisions apply to the delivery of shares as well as to the establishment and delivery of a limited right thereon.

MANAGEMENT AND SUPERVISION

Article 10

 

  1. The management of the company is entrusted to a Board of Directors under the supervision of a Supervisory Board.

 

  2. The Board of Directors consists of two or more members.

The general meeting of shareholders specifies the number of members of the Board of Directors in office.

 

  3. The members of the Board of Directors are appointed by the general meeting of shareholders and can at all times be suspended and dismissed by the latter.

 

  4. The Board of Directors can appoint one or several holders of a power of attorney, who will have the title and the powers deemed necessary by the Board.

Article 11

 

  1. The Board of Directors is entrusted with the management of the affairs of the company.

 

  2. The members of the Board of Directors distribute their activities among each other.

All decisions of the Board of Directors are taken with an absolute majority of votes.

In case of an equality of votes, the general meeting decides.

 

  3. If one or several members of the Board of Directors are absent or unable to attend, the other members or the sole remaining member will temporarily be entrusted with the entire management, and if all members of the Board of Directors are absent or unable to attend, the Supervisory Board will temporarily be entrusted with the entire management.

Each of them, temporarily entrusted with the company’s management, has the obligation to convene a meeting of shareholders as soon as possible in order to provide for the management.

REPRESENTATION

Article 12

 

  1. The Board of Directors represents the company. The power to represent the company is granted to two members of the Board of Directors, who act jointly.

 

  2. If a member of the Board of Directors enters into a private agreement with the company or institutes legal proceedings against the company in his own name, the company can be represented by the other members of the Board of Directors or by a supervisory director to be designated by the supervisory board, unless the general meeting designates a person to that effect. If a member of the Board of Directors has in any other way an interests that conflicts with the interests of the company, he and the other members of the Board of Directors are authorised to represent the company.

APPROVAL OF THE GENERAL MEETING OF SHAREHOLDERS/SUPERVISORY BOARD FOR DECISIONS OF THE BOARD OF DIRECTORS

 

  1. Without prejudice to any provisions to the contrary of the articles of association, the approval of the general meeting is required for decisions of the Board of Directors relating to a major change in the identity or the character of the company or enterprise, including in any case :

 

  a. the transfer of the business or a major part of the business to a third party;

 

  b. the conclusion or termination of a long-term cooperation by the company or a subsidiary with another legal entity or company, or in the capacity of fully liable partner in a limited or general partnership, if this cooperation or termination is of major significance for the company;

 

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  c. the acquisition or disposal of a participating interest in the capital of a company with a value equalling at least one third of the amount of the assets according to the balance sheet with explanatory notes or, if the company prepares a consolidated balance sheet, according to the consolidated balance sheet with explanatory notes according to the most recently prepared financial statements of the company, either by the company or by a subsidiary.

 

  2. Furthermore, the Board of Directors needs the prior approval of the general meeting of shareholders for decisions relating to :

 

  a. the acquisition, disposal, encumbrance, erection, extension, leasing, letting or any other use of immovable property, if the value of this immovable property exceeds an amount to be determined by the general meeting of shareholders;

 

  b. the taking and granting of loans exceeding an amount to be determined by the general meeting of shareholders, with the exception of the withdrawal or depositing of money from or into a current account with the company’s banker, and the opening of bank accounts for the company;

 

  c. the acquisition of participating interests in, the financing or managing of an enterprise belonging to third parties, as well as the termination thereof, and the establishment of offices, warehouses and branches;

 

  d. investments of which the importance or the value exceeds an amount to be determined by the general meeting of shareholders; the general meeting of shareholders is at all times authorised to change this amount;

 

  e. the preparation of annual or long-term budgets;

 

  f. the conclusion and termination of a long-term cooperation agreement with one or more owners of another enterprise;

 

  g. the conclusion of any agreements the importance or value of which exceeds an amount to be determined by the general meeting of shareholders;

 

  h. the exercise of voting rights and of any other rights attached to shares which the company holds in other companies, as well as the exercise of rights relating to participating interests of the company in other enterprises.

 

  3. The absence of approval for decisions referred to in paragraphs 1 and 2 of this article cannot be invoked by or against third parties.

 

  4. The Board of Directors is to comply with the instructions given by the general meeting of shareholders with regard to the general principles of the financial, social and economic policy as well as of the personnel policy.

 

  5. The Board of Directors needs the prior approval of the Supervisory Board for decisions relating to :

 

  a. the issue and acquisition of shares in and debt instruments of the company or of debt instruments of a limited or general partnership in which the company is a fully liable partner;

 

  b. cooperation in the issue of depositary receipts for shares;

 

  c. applications for the listing or for a suspension of the listing of the securities referred to under a and b, as well as of shares in the company in any stock exchange;

 

  d. the conclusion or termination of a long-term cooperation agreement of the company or a dependent company with another legal entity or company, or in the capacity of fully liable partner in a limited or general partnership, if this cooperation or termination is of major significance for the company;

 

  e. the acquisition of a participating interest with a value of at least one/fourth of the amount of the subscribed capital, including reserves, according to the balance sheet with explanatory notes, by the company or a dependent company in the capital of another company, as well as the significant increase or decrease of such participating interest;

 

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  f. investments that require an amount equalling at least one/fourth of the amount of the subscribed capital, including reserves, according to the balance sheet with explanatory notes;

 

  g. a proposal for an amendment to the articles of association;

 

  h. a proposal for the dissolution of the company;

 

  i. the filing of bankruptcy and the application for suspension of payment;

 

  j. the termination of the employment contract of a substantial number of employees of the company or a dependent company, all at the same time or within a brief period of time;

 

  k. a significant change in the employment conditions of a substantial number of employees of the company or of a dependent company;

 

  l. a proposal for a decrease in the issued capital.

 

  6. A dependent company within the context of this article is understood to mean :

 

  a. a legal entity to which the company or one or several dependent companies provide at least half of the issued capital, either individually or jointly, for their own account;

 

  b. a company of which the activities are entered in the trade register and for the debts of which the company or a dependent company is fully liable vis-à-vis third parties in the capacity of partner.

 

  7. The absence of approval of the Supervisory Board for decisions referred to in paragraph 5 of this article cannot be invoked by or against third parties.

 

  8. The approval referred to in paragraph 5 appears from the written statement of one of the members of the Supervisory Board.

Article 14

 

  1. The Supervisory Board consists of natural persons and has at least three members.

 

  2. If less than three members of the Supervisory Board are in office, the Board will immediately take the necessary measures to increase its number of members.

 

  3. The Supervisory Board determines profile relating to the number of members and its composition, taking into account the nature of the enterprise, its activities and the desired expertise and background of the Supervisory Directors.

 

  4. The Supervisory Board discusses the profile for the first time upon its determination and subsequently upon each change with the general meeting, as well as with the works council.

APPOINTMENT

Article 15

 

  1. Without prejudice to the provisions contained in paragraph 5, the supervisory directors are appointed by the general meeting of shareholders on the recommendation of the Supervisory Board, provided that the appointments have not taken place before this article became applicable to the company. The Supervisory Board notifies the general meeting of shareholders and the works council at the same time of the recommendation. The reasons for the recommendation will be stated.

 

  2. The general meeting of shareholders and the works council (within the meaning of article 158 par. 11, Volume 2 of the Civil Code) can recommend certain persons for the office of supervisory director to the Supervisory Board. The Supervisory Board informs them in due time when, for what reason and on the basis of which profile a supervisory director is to be appointed. If the enhanced right of recommendation referred to in paragraph 3 applied, the Supervisory Board shall also inform the general meeting and the works council thereof.

 

  3.

With regard to one third of the number of Supervisory directors, the Supervisory Board shall place a person recommended by the works council on the nomination, unless the Supervisory Board objects to the recommendation on the grounds that the person recommended is expected to be unsuitable for the fulfilment of the duties of supervisory director or that the Supervisory Board will not be suitably composed when the appointment is made as recommended. If the number of supervisory directors cannot be divided by three,

 

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the nearest lower number that can be divided by three will be the basis for determining the number of members to which this enhanced right of recommendation applies.

 

  4. If the Supervisory Board raises an objection, it will inform the works council of that objection and the reasons for it. The Supervisory Board shall institute consultations with the works council without delay with a view to reaching an agreement on the nomination. If the Supervisory Board determines that no agreement can be reached, a representative of the Supervisory Board designated for that purpose shall apply to the Enterprise Division of the Amsterdam Court of Appeal to uphold the objection. The application may not be filed until four weeks have lapsed since the consultations with the works council commenced. The Supervisory Board shall place the person recommended on the nomination if the Enterprise Division declares the objection unfounded. If the Enterprise Division upholds the objection, the works council may make a new recommendation in accordance with the provisions of paragraph 3.

 

  5. The general meeting may reject the nomination with an absolute majority of the votes cast, representing at least one/third of the issued capital.

If not at least one/third of the issued capital was represented at the meeting, a new meeting may be convened at which the nomination may be rejected by an absolute majority of the votes. If the nomination is rejected the Supervisory Board shall draw up a new nomination. Paragraphs 2,3 and 4 of this article shall apply. If the general meeting does not appoint the person nominated and does not resolve to reject the nomination, the Supervisory Board shall appoint the person nominated.

 

  6. The general meeting can transfer the powers and obligations vested in the general meeting pursuant to this article and to articles 158, 159, 161 and 162, Volume 2 of the Civil Code, for a period to be determined by the general meeting but not exceeding two subsequent years, to a commission of shareholders of which the general meeting designates the members; in that case the Supervisory Board informs the commission of the provisions of paragraph 2. The general meeting can at all times revoke the transfer. The method of negotiation between the Supervisory Board and the commission is determined by mutual consent by the board and the commission, provided that it was not laid down in regulations drawn up by the general meeting.

Article 16

 

  1. If there are no supervisory directors, other than as a consequence of the provisions of paragraph 2, the general meeting shall make the appointment pursuant to article 159, Volume 2 of the Civil Code.

 

  2. The general meeting may withdraw its confidence in the Supervisory Board by an absolute majority of votes cast, representing at least one/ third of the issued share capital. The resolution shall specify the reasons for the resolution. The resolution may not be passed with regard to supervisory directors appointed by the Enterprise Division in accordance with paragraph 4 of this article.

 

  3. A resolution as referred to in paragraph 2 shall not be passed until the Board of Directors has notified the works council of the proposed resolution and the reasons for it. The notification shall take place at least thirty days before the general meeting of shareholders at which the proposal is to be dealt with. If the works council determines a view on the proposal, the Board of Directors shall inform the Supervisory Board and the general meeting of that view. The works council may arrange for its view to be explained at the general meeting of shareholders.

 

  4. The resolution referred to in paragraph 2 shall result in the immediate dismissal of the supervisory directors. On passing the resolution, the Board of Directors shall apply without delay to the Enterprise Division of the Amsterdam Court of Appeal to appoint one or more s upervisory directors on a temporary basis. The Enterprise Division shall provide for the effects of the appointment.

 

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  5. The Supervisory Board shall use it best efforts to ensure that a new Supervisory Board is composed within the period set by the Enterprise Division and in accordance with article 15.

Article 17

 

  1. Supervisory directors cannot be :

 

  a. persons employed by the company;

 

  b. persons employed by an dependent company

 

  c. directors and employees of an employees’ organisation which is normally involved in establishing the terms of employment of the persons referred to in a and b.

 

  2. Supervisory directors are appointed for a period of four years maximally, on the understanding that, unless a supervisory director resigns sooner, his term of office expires on the day of the general meeting to be held in the fourth year after the year of his appointment. A supervisory director is eligible for reappointment, subject to the provisions of the previous sentence.

 

  3. Upon application, the Enterprise Division of the Amsterdam Court of Appeal may remove a supervisory director for dereliction of his duties, for other important reasons or on account of any far-reaching change of circumstances as a result of which the company cannot reasonably be required to maintain him as a supervisory director.

The application can be made by the company, represented for this purpose by the Supervisory Board, and by a designated representative of the general meeting or the Works council, as referred to in article 15, paragraph 2. The second and sixth paragraph of article 15 apply accordingly.

 

  4. A supervisory director may be suspended by the Supervisory Board; the suspension shall end by operation of law if the company has failed to apply for removal as referred to in paragraph 3 of this article within one month after the commencement of the suspension.

Article 18

 

  1. The Supervisory Board’s duties are the supervision of the policies of the Board of Directors and of the general course of the company’s affairs and its business enterprise. It shall support the Board of Directors with advice. In fulfilling their duties the supervisory directors shall serve the interests of the company and its business enterprise.

 

  2. The Board of Directors shall in due time provide the Supervisory Board with the information it needs to carry out its duties. The Board of Directors shall inform the Supervisory Board in writing at least once a year of the key elements of the strategy, the general and financial risks and the management and control systems of the company.

 

  3. Each supervisory director has at all times access to the offices and other premises of the company and shall be authorised to examine and copy all books, records and correspondence of the company or to have them examined and copied, as well as to be fully informed of all actions undertaken by the Board of Directors, and to inspect the cash register of the company.

 

  4. The Supervisory Board gives oral or written advice whenever required by a member of the Board of Directors or the general meeting. It can also give advice without being requested to do so.

 

  5. The Supervisory Board can be assisted by one or several experts in the performance of its tasks, at the expense of the company.

 

  6. Each member of the Board of Directors can at all times be suspended by the Supervisory Board. In that case, the Supervisory Board has the obligation and each supervisory director is authorised to convene a general meeting within six weeks after the decision with regard to the suspension, which shall decide whether the suspension will be cancelled or continued or whether the suspended member of the Board of Directors will be granted discharge. In the absence of a decision, the suspension will be cancelled. The suspended member of the Board of Directors is entitled to defend himself during this meeting and to be assisted by a counsel.

 

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Article 19

 

  1. The Supervisory Board can appoint one of its members as Chairman of the Supervisory Board and meets whenever a meeting is deemed necessary by the Chairman, two supervisory directors or the Board of Directors.

 

  2. The Supervisory Board can appoint one of its members as delegate supervisory director, who will be charged with the ongoing communication with and daily supervision of the Board of Directors.

 

  3. The Supervisory Board can only take decisions with an absolute majority of votes. The Supervisory Board can also take decisions with an absolute majority of votes outside a meeting, by means of letters, telex and telegrams, provided that the proposal for such a decision-making process was submitted to all members and none of the members raised any objections. In case of equality of votes the Chairman of the Supervisory has a casting vote.

 

  4. If the Supervisory Board is not complete, the remaining members or the sole remaining member shall be authorised and obliged to take all actions for which the Board, the Chairman and the delegated supervisory director are authorised or obliged.

REMUNERATION

Article 20

 

  1. The policy relating to the remuneration of the Board of Directors is determined by the general meeting on the recommendation of the Supervisory Board.

 

  2. The remuneration of the members of the Board of Directors is determined by the general meeting in compliance with the policy referred to in paragraph 1.

 

  3. The general meeting can grant a remuneration to the supervisory directors on the recommendation of the Supervisory Board. Any expenses shall be reimbursed.

No shares and/or rights on shares are granted to a supervisory director by way of remuneration.

ACCOUNTANT

Article 21

 

  1. The company charges a registered accountant or another expert competent according to the law with the examination of the financial statements.

 

  2. The general meeting is authorised to grant this assignment. If the general meeting fails to do so, the Supervisory Board is authorised to do so. If the Supervisory Board fails to grant the assignment, the Board of Directors is authorised to do so. The appointment of an accountant is not limited by any recommendation. The assignment can at all times be revoked by the general meeting or by the body that granted the assignment. In addition, an assignment granted by the Board of Directors can be revoked by the Supervisory Board. The general meeting hears the accountant, at his request, with regard to the revocation of the assignment or with regard to the intention to revoke the assignment, of which he was informed.

 

  3. The accountant examines whether the financial statements provide the information required by article 362 paragraph 1, Volume 2 of the Civil Code. He furthermore examines whether the financial statements meet the applicable legal requirements, whether the annual report was, in his opinion, prepared in accordance with the applicable legal provisions and corresponds to the data contained in the financial statements, and if the information referred to in the above-mentioned article, paragraph 1, items b to and including g, has been added.

 

  4. The accountant reports to the Board of Directors and to the Supervisory Board.

 

  5. The financial statements cannot be adopted if the general meeting was not able to take cognisance of the statement of the accountant, which is to be attached to the financial statements, unless a legally valid reason for the absence of this statement is given.

 

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FINANCIAL YEAR, FINANCIAL STATEMENTS

Article 22

 

  1. The financial year of the company will be concurrent with the calendar year.

 

  2. Each year on the last day of the financial year, the Board of Directors closes the company’s books and prepares the financial statements within a period of five months – subject to extension of this period by six months maximally by the general meeting on account of special circumstances – and submits these documents to the general meeting. The Board of Directors also submits the annual report within the same period of time, and sends the financial statements to the works council.

 

  3. The financial statements are adopted by the general meeting.

 

  4. The company ensures that the financial statements, the annual report and the information to be added pursuant to article 392 paragraph 1, Volume 2 of the Civil Code are present at the registered office as from the date on which the general meeting at which they will be discussed is convened until the end of this meeting. Shareholders and holders of depositary receipts for shares can consult the documents and obtain a copy free of charge.

 

  5. In addition, any person is entitled to inspect the documents that are to be published after their adoption and to obtain a copy at cost price maximally. This right lapses as soon as the documents have been deposited at the office of the trade register.

 

  6. If shares of the company, debt instruments or depositary receipts for these shares or debt instruments, issued with the company’s concurrence, are listed on any stock exchange, the company shall publish its half-year results as soon as they are available.

 

  7. On the basis of articles 394 et seq., Volume 2 of the Civil Code, the company has the obligation to publish the financial statements within eight days after they have been adopted. The publication takes place by depositing a copy at the office of the trade register, with indication of the date on which they were adopted.

 

  8. If the financial statements have not been adopted two months after the expiry of the period set for their preparation, according to the applicable legal provisions, the Board of Directors shall immediately publish them, with indication of the fact that they have not yet been adopted.

 

  9. The company must have published the financial statements at the latest thirteen months after the end of the financial year.

 

  10. At the same time and in the same manner as the financial statements, a copy of the annual report and of the other information referred to in article 392, Volume 2 of the Civil Code is published.

PROFIT AND LOSS

Article 23

 

  1. Any profit is at the disposal of the general meeting for payment of a dividend or creation of a reserve in favour of the holders of ordinary shares, of for any other purpose to be determined by the meeting, within the context of the company’s objects.

 

  2. The company can only make distributions to the shareholders and other persons entitled to the distributable profit to the extent that the shareholders’ equity of the company exceeds the paid-up part of the capital plus the reserves that are to be maintained by law or by the articles of association.

 

  3. The distribution of profits takes place after the adoption of the financial statements which reveal that such a distribution is justified.

 

  4. No profits on shares are distributed in favour of the company.

 

  5. The calculation of the distribution of profits does not take into account the shares held by the company in its own capital, unless these shares are encumbered with usufruct or depositary receipts for these shares have been issued with the company’s concurrence.

 

  6.

The company may make interim distributions provided that the requirements of the second paragraph of this article are met, as evidenced by an interim statement of assets and liabilities. This statement of assets and liabilities relates to the shareholders’ equity at the earliest on the first day of the third month prior to the month in which the decision relating

 

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to the distribution is announced. It is prepared in compliance with the valuation methods that are generally regarded as acceptable. The amounts of the legal reserves or the reserves provided for by the articles of association are included in the statement of assets and liabilities, which is signed by the directors; if one or several directors fail to sign, this is mentioned with indication of the reason. The company deposits the statement of assets and liabilities at the office of the trade register within eight days following the date on which the decision to distribute profits is announced.

 

  7. The dividend is made payable at a time to be determined by the general meeting of shareholders.

 

  8. Dividends of which receipt was not taken within five years after they have become payable will be paid to the company.

GENERAL MEETINGS OF SHAREHOLDERS

Article 24

 

  1. All general meetings of shareholders are held at Breda, at Dommelen, in the municipality of Valkenswaard or at Amsterdam.

During a general meeting in any municipality other than those mentioned above, valid decisions can only be taken if the entire issued capital is represented at the meeting.

 

  2. A general meeting of shareholders shall take place each hear at a moment to be determined by the Board of Directors in consultation with the Supervisory Board, at the latest six months after the end of the financial year.

During this meeting :

 

  a. the Board of Directors shall submit its report on the affairs of the company and the management pursued during the past financial year;

 

  b. the financial statements shall be discussed;

 

  c. the dividend, if any, and the appropriation of profits shall be discussed;

 

  d. the granting of discharge to the Board of Directors for the policy pursued shall be discussed;

 

  e. the granting of discharge to the Supervisory Board for its supervision shall be discussed;

 

  f. vacancies, if any, shall be filled;

 

  g. proposals and items shall be put forward by the Board of Directors and/or the Supervisory Board in order to come to a decision of the general meeting;

Article 25

 

  1. Except in the cases where the law of the present articles of association require a larger majority, decisions of the general meeting are taken by an absolute majority of votes.

 

  2. Votes with regard to matters are cast orally, votes with regard to persons are cast by ballot. If no absolute majority is obtained after the first vote with regard to a person, a new vote is held between the two persons who acquired the largest number of votes.

 

  3. In case of equality of votes with regard to matters, the proposal is deemed to have been rejected.

In case of equality of votes with regard to persons, fate decides.

 

  4. Blank votes are regarded as votes not cast.

 

  5. Voting by acclamation is allowed if none of the persons present object.

Article 26

 

  1. Shareholders and holders of depositary receipts for shares are authorised to attend the general meetings, either personally or by proxy, to speak at the meetings and to exercise their voting right.

Only shareholders, their spouses, as well as lawyers, civil-law notaries, tax advisors and accountants of their choice can act as authorised representatives.

 

  2. The general meeting of shareholders is convened, also for the holders of depositary receipts for shares, by means of convening notices sent at least fifteen days before the date of the meeting to the addresses entered in the register referred to in article 8.

 

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If depositary receipts for bearer shares have been issued with the company’s concurrence, the general meeting can only be convened by means of an announcement in a national newspaper.

 

  3. The convening notice is to include the items on the agenda or an announcement that the shareholders – including holders of depositary receipts – can take cognisance of the items on the agenda at the company’s registered office.

 

  4. One or several holders of shares representing, either individually or jointly, at least one hundredth of the issued capital are entitled to request the Board of Directors and the Supervisory Board to put one or several items on the agenda of the general meeting of shareholders.

These items are put on the agenda by the Board of Directors and the Supervisory Board provided that :

 

  a. they are not contradictory to any major interest of the company;

and

 

  b. the request was submitted in writing to the Board of Directors at the latest sixty days before the date of the general meeting of shareholders.

 

  5. All members of the Board of Directors and the Supervisory Board are equally authorised to convene a meeting.

 

  6. If all shareholders or their representatives are present, decisions can be validly taken without convening notices having been sent, provided that these decisions are taken unanimously and that there are no holders of depositary receipts.

Article 27

 

  1. Each share will confer the right to cast one vote.

 

  2. Valid votes can be cast for shares of shareholders to whom a right vis-à-vis the company would be granted as a result of the decision in a capacity other than that of shareholder of the company, or who may be discharged from any obligation vis-à-vis the company as a result of the decision.

Article 28

 

  1. Extraordinary general meetings of shareholders take place whenever required necessary by the Board of Directors or the Supervisory Board or whenever one or several holders of shares and/or depositary receipts, representing at least one/tenth of the issued capital, make a request for such a meeting in writing, with clear indication of the items on the agenda, to the Board of Directors and the Supervisory Board.

 

  2. Articles 110, 111 and 112, Volume 2 of the Civil Code apply.

Article 29

 

  1. The general meeting is chaired by the Chairman of the Supervisory Board. If the Chairman of the Supervisory Board is not present at the meeting, the meeting appoints a chairman.

 

  2. If no report is drawn up by a civil-law notary, the minutes of the general meeting are signed by the chairman and by a second person – preferably a shareholder – attending the meeting and requested to do so by the chairman.

Article 30

 

  1. Shareholders can also take all decisions which they can take during the meeting outside the meeting, unless there are holders of depositary receipts for shares.

 

  2. Decisions can only be taken outside a meeting if all shareholders have accepted the proposal in writing.

 

  3. The Board of Directors announces the result of the vote during the next general meeting, in the minutes of which this announcement is mentioned. During this meeting the written statements can be inspected.

 

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AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND DISSOLUTION

Article 31

 

  1. Decisions to amend the present articles of association or to dissolve the company can be taken by absolute majority of votes upon the proposal of the Board of Director, without prejudice to the provisions of article 16, paragraph 5, item g.

 

  2. If a proposal to amend the articles of association is put forward during a general meeting, a copy of this proposal, containing the text of the proposed amendment, is to be submitted at the company’s registered office for inspection by each shareholder and holder of depositary receipts, until after the meeting.

If the proposal is not submitted at the registered office, no valid decision can be taken if holders of shares representing at least one/tenth of the capital represented at the meeting object to the discussion of the proposal.

 

  3. All matters relating to an amendment to the articles of association, with the exception of the ministerial decree referred to in article 125, Volume 2 of the Civil Code.

DISSOLUTION AND LIQUIDATION

Article 32

 

  1. In case of dissolution of the company the Board of Directors is responsible for the liquidation, under the supervision of the Supervisory Board, unless decided otherwise by the general meeting.

 

  2. The general meeting determines the remuneration of the liquidators and of those entrusted with the supervision of the liquidation.

 

  3. During the liquidation the present articles of association remain applicable to the largest possible extent.

 

  4. Any assets remaining after payment of all debts of the company will be distributed among the shareholders in proportion to the nominal amount of their shares.

 

  5. The books, records and other data carriers of the dissolved company are to be kept during a period of time provided for by law, by the person designated to that effect by the general meeting.

Eindhoven, 2 January 2006

 

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EXHIBIT 3.9

CONTINUOUS TEXT

of

the articles of association of the private limited liability company: Interbrew Central European Holding B.V. , having its registered office in Breda (prior to the amendment to the articles of association trading as Interbrew Services B.V.), the articles of association of which company were most recently amended by deed executed before Mr O.B. Okkinga, civil-law notary in Rotterdam, on the twenty-ninth day of May nineteen hundred and ninety-seven, on the draft of which the Ministerial certificate of no objection was granted on the twenty-second day of May nineteen hundred and ninety-seven, number B.V. 284.322.

ARTICLES OF ASSOCIATION

NAME AND REGISTERED OFFICE

Article 1.

 

1. The name of the company is: Intrebrew Central European Holding B.V.

 

2. The company has its registered office in Breda.

OBJECTS

Article 2.

The company’s objects are:

 

a. to acquire, own and dispose of shares in other companies and also to acquire, hold and shed participating interests in, or to participate in other companies in an alternative way and to acquire, own and dispose of other securities;

 

b. to conduct the administration and the management of, or advise other companies or enterprises;

 

c. to borrow or lend moneys and also to provide securities (including guarantees) and to issue, acquire and dispose of negotiable instruments for the epitomisation of rights and/or obligations and other asset values and to acquire, dispose of, lease, rent, conduct the management of, administrate, establish and operate (or arrange for others to establish and operate) immovable property, all this in the broadest sense of the word;

 

d. to exploit industrial and intellectual property rights – including any patented know-how or otherwise;

 

e. to trade in drinks and foodstuffs;

 

f. to conduct the international and domestic forwarding business, including the customs-forwarding business;


g. as well as all other activities that are connected with, or that may be conducive to the realisation of the company’s objects.

CAPITAL AND SHARES

Article 3.

 

1. The company’s authorised capital amounts to eight hundred thousand guilders (NLG 800,000.—). It is divided into eight hundred (800) shares with a par value of one thousand guilders (NLG 1,000.—).

 

2. The general meeting of shareholders shall decide on the times and terms of issue of as yet unissued shares. When subscribing for shares, its par value must be paid up in full.

 

3. In pursuance of a resolution of and on the terms to be stipulated by the general meeting of shareholders, the company shall be entitled to acquire paid-up shares in its own capital for a valuable consideration to a nominal amount equal to up to half its subscribed capital. Said acquisition shall not be permitted in so far as the amount paid on the shares that are held by a third party or parties would consequently fall to below the amount referred to in article 2:178, paragraph 2 of the Netherlands Civil Code, nor shall such an acquisition be permitted if the amount paid on said shares is less than this amount. The company shall not be permitted to exercise the rights attaching to the shares held by the company in its own capital.

 

4. In the event that the sum of the paid-in and called-up part of the capital and the reserves that must be maintained by law or these Articles, is lower than the latest statutory minimum capital determined in pursuance of article 2:178, paragraph 2 of the Netherlands Civil Code, the company shall be obliged to maintain a reserve amounting to the difference.

 

5. The provisions of the first sentence of paragraph 2 of this article shall be applicable mutatis mutandis to the alienation of own shares by the company. The provisions of article 5 shall not apply to this alienation.

 

6. The company shall not render its cooperation to the issue of share certificates in its capital.

 

7. In the event of the establishment of a right of usufruct on a share, no voting rights can be vested in the usufructuary.

 

8. No right of pledge can be established on the shares.

Article 4.

 

1. The shares are registered and numbered consecutively. No share certificates shall be issued.

 

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2. Concerning each share the company’s Management Board shall keep a register, containing the names and addresses of all shareholders, stating the amount paid on each share, at the company’s office. The names and addresses of any usufructuaries, stating the rights conferred on them in accordance with the provisions of paragraphs 2 and 4 of article 2:197 of the Netherlands Civil Code shall also be included in the register.

 

3. Every entry in the register must be signed by a Managing Director. Every transfer or passing of ownership of a share, as well as every establishment or transfer of a right of usufruct on a share and every change of address the Management Board is notified of by a shareholder or, where appropriate, a usufructuary, must be entered in the register and any such entry must be signed by a Managing Director.

 

4. The transfer of shares may be effected only with due observance of the provisions of article 2:196 of the Netherlands Civil Code.

 

5. Without prejudice to the provisions of article 3 paragraph 5, the transfer of shares shall be permitted only with due observance of the provisions of article 5.

Article 5.

 

1. The transfer of shares requires the prior approval of the general meeting of shareholders.

 

2. The transfer must take place within three months after the approval has been granted, or is deemed to have been granted.

 

3. The approval shall be deemed to have been granted in the event that the general meeting of shareholders fails to take a decision on a petition to that effect within one month from the date of receipt of such a petition and furthermore if the general meeting of shareholders fails to notify the proposing transferor, simultaneously with its refusal, of the name(s) of the prospective buyer(s) who is/are willing to purchase all the shares the request for approval pertains to for cash.

 

4. In the event that the proposing transferor accepts the prospective buyer(s) referred to in paragraph 3 and the parties fail to reach agreement on the share price, the purchase price of the share(s) shall, if so desired, be determined by a registered accountant, to be appointed by the parties by mutual agreement, or if the parties fail to reach agreement on this, to be appointed by the Chairman of the Chamber of Commerce and Industry in whose district the company has its registered office, all this at the request of the party that is the first to take action. The costs of the price determination shall be borne by the company.

 

5. Every prospective buyer shall at all times be entitled to withdraw, provided that he does so within one month from having been informed of the outcome of the price determination as referred to in the preceding paragraph. In the event that, as a consequence of this, not all the offered shares are bought for cash, because:

 

  a. all the prospective buyers have withdrawn; or

 

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  b. the remaining prospective buyers or one or more of them have not declared themselves willing to acquire the shares that have become available with due observance of the criteria for allocation specified by the general meeting of shareholders, within six weeks from the date of receipt of the aforementioned notification,

the proposing transferor shall be free to transfer all the shares the request for approval pertains to, provided that the transfer takes place within three months after this was established.

 

6. The proposing transferor shall at all times be entitled to withdraw his offer, provided that he does so within one month from having been informed of the name(s) of the prospective buyer(s) to whom he could have transferred all the shares the offer relates to and at what price.

 

7. In pursuance of the provisions of this article, the company may be a prospective buyer only with the proposing transferor’s consent.

MANAGEMENT

Article 6.

 

1. The company shall be run by a Management Board, consisting of one or more Managing Directors. The number of Managing Directors shall be determined by the general meeting of shareholders. A company may also be appointed Managing Director.

 

2. The Managing Director(s) shall be appointed by the general meeting of shareholders. The general meeting of shareholders shall at all times have the authority to suspend or dismiss the Managing Director(s).

 

3. In the event that the general meeting of shareholders fails to take a decision on the dismissal of a suspended Managing Director within three months, the suspension shall lapse. The suspended Managing Director shall be given the opportunity to account for his actions and to be represented by counsel in the general meeting of shareholders.

 

4. The remuneration and the other terms of employment of the Managing Director(s) shall be determined by the general meeting of shareholders. In addition, the general meeting of shareholders shall be entitled to grant the Management Board, or one or more Managing Directors a share in the profits.

MANAGEMENT BOARD

Article 7.

 

1. Except for the restrictions laid down in these Articles, the Management Board shall be charged with the management of the company.

 

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2. If there is more than one Managing Director, resolutions are passed by an absolute majority of the votes cast. In the event of a tie, the general meeting of shareholders shall have the deciding vote, on the condition that the Management Board requests them to do so.

 

3. The Management Board shall be obliged to follow the instructions of the general meeting of shareholders with respect to the general guidelines of the financial, social, economic and staffing policy to be pursued within the company.

 

4. The Management Board shall represent the company, unless the law prescribes otherwise. The authority to represent the company shall also be vested in two jointly acting Managing Directors. In the event that there is only one Managing Director in office, said Managing Director shall have independent authority to represent the company.

 

5. In the event of any vacancies, or the prolonged absence of one or more Managing Directors, the remaining Managing Director(s) shall be temporarily entrusted with the management of the company. In the event of any vacancies or the prolonged absence of the entire Management Board or the sole Managing Director, the person to be appointed for that purpose by the general meeting of shareholders shall be temporarily entrusted with the management of the company.

GENERAL MEETINGS OF SHAREHOLDERS

Article 8.

 

1. General meetings of shareholders shall be held in the municipality in which the company has its registered office. The annual general meeting of shareholders shall be held within six months of the end of the company’s financial year.

 

2. General meetings of shareholders shall be called by the Management Board at least fourteen days prior to the day of the meeting, not including the day of the convocation and the day of the meeting, by means of convening notices to the addresses of the shareholders as set out in the register referred to in article 4.

 

3. The Management Board shall be obliged to call a general meeting of shareholders upon receipt of a petition to that effect from one or more shareholders, who collectively represent at least ten percent (10%) of the issued capital, stating the business to be transacted at such a meeting. If the Management Board fails to call a general meeting of shareholders to be held within four weeks from the date of receipt of such a petition, the petitioners may call a meeting themselves, with due observance of the relevant provisions of these Articles.

 

4. The general meeting of shareholders shall elect its own chairman.

 

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5. A secretary, to be appointed by the chairman from those present, shall keep minutes of all the business transacted at the general meetings. The minute shall be signed by the chairman and the secretary in witness of their adoption.

 

6. A shareholder may have himself represented at the meeting by a person holding a written power of attorney.

Article 9.

 

1. Every share shall confer the right to cast one vote.

 

2. All resolutions are adopted by an absolute majority of the valid votes cast.

 

3. The voting right attaching to shares that belong to the company and/or its subsidiaries may not be exercised; these shares shall not be taken into account when it comes to determining whether there is a majority or a quorum.

Article 10.

A resolution of the general meeting of shareholders shall be equal to a statement signed by all the shareholders, in which the resolution in question has been included.

FINANCIAL YEAR, ANNUAL ACCOUNTS AND PROFIT APPROPRIATION

Article 11.

 

1. The company’s financial year, which commenced on the first day of January nineteen hundred and ninety-seven, shall run to the thirty-first day of May nineteen hundred and ninety-seven inclusive. The next financial year shall run from the first day of June nineteen hundred and ninety-seven to the thirty-first day of December nineteen hundred ninety-seven inclusive. The subsequent financial years shall coincide with the calendar year.

 

2. The Management Board shall draw up the annual accounts within four months of the end of the company’s financial year – except where this period has been extended by the general meeting of shareholders by up to seven months on the ground of exceptional circumstances – and present these documents to the general meeting of shareholders for adoption.

 

3. The annual accounts shall be signed by all the Managing Directors. If the signature of any of them is missing, the mere fact that it is missing and the underlying reasons for this shall be stated on the document.

 

4. The Management Board shall submit the annual report on presentation of the documents referred to in the preceding paragraph to the general meeting of shareholders.

 

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5. The provisions of the preceding paragraph with respect to the annual report and the additional information prescribed in article 2:392 paragraph 1 of the Netherlands Civil Code, shall not be applicable if the provisions of article 2:403 of the Netherlands Civil Code apply to the company.

 

6. The general meeting of shareholders shall adopt the annual accounts. The unqualified adoption of the annual accounts by the general meeting of shareholders shall discharge the Managing Directors from all liability in respect of their management during the previous financial year, in so far as this appears from these documents, or the results of this are incorporated herein and without prejudice to the relevant statutory provisions.

Article 12.

 

1. The profits that appear from the adopted annual accounts shall be placed at the disposal of the general meeting of shareholders for payment of a dividend, allocation to a reserve or any such other purpose falling under the scope of the company’s objects as the meeting may resolve.

 

2. Distributions from the distributable profits to shareholders and other persons entitled to such a distribution shall be permitted only in so far as the shareholders’ equity exceeds the paid-in and called-up part of the capital increased by the reserves that must be maintained by law. A distribution of profits on shares held by the company in its own capital shall not be permitted.

 

3. The Management Board shall be authorised, in so far as the company has made a profit, to distribute one or more interim dividends at the expense of the anticipated dividend.

 

4. Distributions of profits shall be made only after the adoption of the annual accounts that permit such a distribution.

Article 13.

 

1. The dividends must be made payable within fourteen days after the adoption of the annual accounts, unless the general meeting of shareholders provides otherwise.

 

2. Dividends that have not been claimed within five years after they became payable shall fall to the company.

DISSOLUTION AND LIQUIDATION

Article 14.

 

1. If the company is dissolved pursuant to a resolution of the general meeting of shareholders, the Management Board shall be charged with its liquidation, unless the general meeting of shareholders provides otherwise.

 

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2. The general meeting shall determine the remuneration of the liquidators and those charged with the supervision of the liquidation.

 

3. The provisions set out in these Articles shall – where possible – remain in force during the liquidation.

 

4. The balance of the company’s assets after payment of all debts shall be distributed to the shareholders in proportion to the amount that has been paid on the shares. No liquidation dividend shall be paid on shares that are held by the company in its own capital.

 

5. The dissolved company’s books and records shall be held by the person to be appointed for that purpose by the general meeting of shareholders for a period of ten years from the completion of the company’s liquidation.

 

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EXHIBIT 3.10

DEED OF AMENDMENT OF THE ARTICLES OF ASSOCIATION OF INTERBREW

INTERNATIONAL B.V.

On this day, the twenty-third day of October two thousand appears before me, Professor Martin van Olffen, notaris (civil law notary) practising in Amsterdam: Allard Reinar van der Veen, employed by De Brauw Blackstone Westbroek N.V., a limited liability company, with corporate seat in The Hague, with address at Zuid-Hollandlaan 7, 2596 AL The Hague, The Netherlands, at the office in Amsterdam, born in Bergen (Noord Holland) on the sixteenth day of August, nineteen hundred and seventy-three. The person appearing declares that on sixteenth day of October two thousand the general meeting of shareholders of Interbrew International B.V. , a private company with limited liability organised under the laws of the Netherlands, with corporate seat in Breda, the Netherlands and address at: 4811 CA Breda, Ceresstraat 19, the shareholders resolved outside a meeting to amend the articles of association of this company and to authorise the person appearing to execute this deed. Pursuant to those resolutions the person appearing declares that he amends the company’s articles of association such that these shall read in full as follows.

ARTICLES OF ASSOCIATION :

Name. Corporate Seat.

Article 1.

The name of the company is: Interbrew International B.V. Its corporate seat is in Breda.

Objects.

Article 2.

The objects of the company are:

 

a. the acquisition, holding and selling of shares in other companies, as well as acquiring, holding and selling off participations in or by another means participating in other companies and the acquiring, holding and selling of other stocks;


b. carrying out management or consultancy activities for other companies or organisations;

 

c. lending monies, as well as providing collateral (including guarantees) and furnishing, acquiring and selling negotiable interests which incorporate rights and/or obligations and of other capital values, and the acquisition, selling, renting, managing, administrating, founding of real estate, all this in the broadest senses of the words;

 

d. the administration of rights of industrial intellectual property, this including all know-how regardless of whether it is patented or not;

 

e. the trade in drinks and foods;

 

f. carrying out the company activities of the international and national forwarding agents; as well as

 

g. doing anything which is connected with the above and which could benefit it.

Share capital and shares.

Article 3.

 

3.1. The authorised share capital of the company amounts to one billion Dutch guilders (NLG l,000,000,000). It is divided into three hundred thousand (300,000) class A shares of one thousand Dutch guilders (NLG 1,000) each and seven hundred thousand (700,000) class B shares of also one thousand Dutch guilders (NLG 1,000) each.

 

3.2. The shares shall be in registered form and shall consecutively be numbered, class A shares from Al onwards and class B shares from Bl onwards.

 

3.3. No share certificates shall be issued.

 

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3.4. Where in these articles of association reference is made to shares and shareholders this shall include the shares of each class as well as the holders of shares of each class respectively, unless explicitly provided otherwise.

 

3.5. In respect of the subscription for or acquisition of shares in its share capital or depositary receipts for shares by other persons, the company may neither grant security rights, give a guarantee as to the price of the shares, grant guarantees in any other manner, nor bind itself either jointly or severally in addition to or for other persons. The company may make loans in respect of a subscription for or an acquisition of shares in its share capital or depositary receipts for shares up to an amount not exceeding the amount of its distributable reserves. A resolution by the managing board to make a loan as referred to in the preceding sentence shall be subject to the approval of the general meeting of shareholders, hereinafter also to be referred to as: the general meeting. The company shall maintain a non-distributable reserve for an amount equal to the outstanding amount of the loans as referred to in this paragraph.

 

3.6. If the aggregate amount of the issued share capital and the reserves required to be maintained by law is less than the minimum share capital as then required by law, the company must maintain a reserve up to an amount equal to the difference.

 

3.7. The general meeting may decide upon rerubrication of shares and as such has the power to convert shares from one kind to another. After the shares of one kind have been converted by virtue of a resolution to that effect into another kind, the number of shares of one kind included in the authorised share capital will diminish and the number of shares of the other kind included in the authorised which have become shares of the other kind.

 

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3.8. The company will register the amendment referred to in the previous paragraph within eight days with the trade register.

 

3.9. The managing board will amend the shareholders register correspondingly.

Issue of shares.

Article 4.

 

4.1. Shares shall be issued pursuant to a resolution of the general meeting; the general meeting shall determine the price and further terms and conditions of the issue.

 

4.2. The previous paragraph shall equally apply to a grant of rights to subscribe for shares, but shall not apply to an issue of shares to a person who exercises a previously acquired right to subscribe for shares.

 

4.3. Shares shall never be issued at a price below par.

 

4.4. Shares shall be issued by notarial deed, in accordance with the provisions set out in section 2:196 of the Civil Code.

 

4.5. The company is not authorised to cooperate in the issue of depositary receipts for shares.

 

4.6. No right of pledge may be vested on the shares.

 

4.7. The voting rights on shares may not be conferred on holders of a right of usufruct on such shares.

Payment for shares.

Article 5.

 

5.1. Shares shall only be issued against payment in full.

 

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5.2. Payment must be made in cash, providing no alternative contribution has been agreed.

 

5.3. Payment in cash may be made in a foreign currency, subject to the company’s consent.

Pre-emption rights.

Article 6.

 

6.1. Upon issue of shares, each holder of shares of the same class as the shares to be issued shall have a pre-emption right in proportion to the aggregate amount of his shares of that class, subject to the provisions of paragraph 2 and subject to the provisions set out in section 2:206a paragraph 1, second sentence of the Civil Code.

Should a shareholder who is entitled to a pre-emption right not or not fully exercise such right, the remaining holders of shares of the same class shall be similarly entitled to pre-emption rights in respect of those shares which have not been claimed. If these shareholders collectively do not or do not fully exercise their pre-emption right, the holders of shares of the other class shall be entitled to a pre-emption right in respect of the shares which have not been claimed, in proportion to the aggregate amount of their shares of that other class. If the latter collectively do not or do not fully exercise their pre-emption rights either, then the general meeting shall be free to decide to whom the shares which have not been claimed shall be issued, and such issue may be made at a higher price.

 

6.2. Pre-emption rights may be limited or excluded by resolution of the general meeting for each specific issue.

 

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6.3. Pre-emption rights may not be separately disposed of.

 

6.4. If pre-emption rights exist in respect of an issue of shares, the general meeting shall determine, with due observance of the provisions set out in this article and simultaneously with the resolution to issue shares, the manner in which and the period within which such pre emption rights may be exercised. Such period shall be at least four weeks from the date the notification referred to in paragraph 5 hereof is sent.

 

6.5. The company shall notify all shareholders of an issue of shares in respect of which pre emption rights exist and of the period of time within which such rights may be exercised.

 

6.6. The provisions of this article shall equally apply to a grant of rights to subscribe for shares, but shall not apply to an issue of shares to a person who exercises a previously acquired right to subscribe for shares.

Repurchase of shares.

Article 7.

 

7.1. Subject to authorisation by the general meeting, the managing board may cause the company to acquire fully paid up shares in its own share capital for a consideration, provided:

 

  a. the company’s equity minus the acquisition price is not less than the aggregate amount of the issued share capital and the reserves which must be maintained pursuant to the law; and

 

  b. the aggregate par value of the shares in its share capital to be acquired and already held by the company and its subsidiary companies does not exceed half the issued share capital.

 

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The validity of the acquisition shall be determined on the basis of the company’s equity as shown by the most recently adopted balance sheet, minus the acquisition price for shares in the company’s share capital and any distribution of profits or reserves to other persons which have become due by the company and its subsidiary companies after the balance sheet date. No acquisition pursuant to this paragraph shall be allowed if a period of six months following the end of a financial year has expired without the annual accounts for such year having been adopted.

 

7.2. Articles 4 and 6 shall equally apply to the disposal of shares acquired by the company in its own share capital, with the exception that such disposal may be made at a price below par. A resolution to dispose of such shares shall be deemed to include the approval as referred to in section 2:195, subsection 3 of the Civil Code.

 

7.3. If depositary receipts for shares in the company have been issued, such depositary receipts for shares shall be put on par with shares for the purpose of the provisions of paragraph 1.

 

7.4. In the general meeting no votes may be cast in respect of a share held by the company or a subsidiary company; no votes may be cast in respect of a share the depositary receipt for which is held by the company or a subsidiary company. When determining to what extent the shareholders cast votes, are present or represented or to what extent the share capital is provided or represented, no account shall be taken of shares which are not entitled to voting rights pursuant to the preceding provisions.

 

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7.5. Shares which the company holds in its own share capital shall not be counted when determining the division of the amount to be distributed on shares.

Reduction of share capital.

Article 8.

 

8.1. The general meeting may resolve to reduce the issued share capital by cancelling shares or by reducing the par value of shares by an amendment to the articles of association, provided that the amount of the issued share capital does not fall below the minimum share capital as required by law in effect at the time of the resolution.

 

8.2. Cancellation of shares can apply to shares which are held by the company itself or to shares for which the company holds depositary receipts. Cancellation of shares can also apply to all shares of a specific class, provided their par value is repaid. Partial repayment on shares shall be made either on all shares or exclusively on shares of a specific class. The validity of a resolution to cancel shares with repayment and a resolution to partially repay shares of a specific class requires a preceding or simultaneous approval of the meeting of holders of shares of the relevant class.

 

8.3. Reduction of the par value of shares without repayment or partial repayment on shares shall be effected pro rata to all shares or if it takes place exclusively on shares of a specific class, pro rata to all shares of that class. The pro rata requirement may be waived by agreement of all shareholders concerned.

 

8.4.

The notice of a general meeting at which a resolution referred to in this article is to be adopted shall include the purpose of the reduction of the share capital and the manner in which such reduction shall be effectuated. The resolution to reduce

 

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the share capital shall specify the shares to which the resolution applies and shall describe how such a resolution shall be implemented. The company shall file a resolution to reduce the issued share capital with the trade register and shall publish such filing in a national daily newspaper.

Shareholders register.

Article 9.

 

9.1. The managing board shall maintain a register in which the names and addresses of all shareholders shall be recorded, stating the date on which they acquired the shares, the number and class of shares held by each of them, the date of acknowledgement or service, as well as the amount paid up on each share and any other information that must be recorded under the law.

 

9.2. The register shall be kept up to date.

 

9.3. Upon request and at no cost, the managing board shall provide a shareholder and a holder of a right of usufruct with an extract from the register regarding their respective rights in respect of a share. If a share is encumbered with a right of usufruct, the extract shall specify that the shareholder is entitled to the voting rights pertaining to such shares and that the holder of a right of usufruct is not entitled to the voting rights conferred by law on holders of depositary receipts for shares issued with the cooperation of a company.

 

9.4. The managing board shall make the register available at the office of the company for inspection by the shareholders.

Article 10.

Each shareholder and holder of a right of usufruct shall give his address to the managing board.

 

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Joint holding.

Article 11.

If shares are included in a joint holding, the joint participants may only be represented vis à vis the company by a person who has been designated by them in writing for that purpose. The joint participants may also designate more than one person.

The joint participants may determine at the time of the designation of the representative or thereafter—but only unanimously—that, if a joint participant so wishes, a number of votes corresponding to his interest in the joint holding will be cast in accordance with his instructions.

Notices of meetings and notifications.

Article 12.

 

12.1. Notices of meetings and notifications shall be given by registered or regular letter or by bailiff’s writ.

Notices of meetings and notifications to shareholders receipts shall be sent to the addresses most recently given to the managing board. Notifications by shareholders to the managing board or to the supervisory board shall be sent to the office of the company.

 

12.2. The date of a notice of meeting or a notification shall be deemed to be the date stamped on the receipt issued for a registered letter, or the date of mailing by the company or the date of service of the writ, as the case may be.

 

12.3. Notifications which, pursuant to the law or the articles of association, are to be addressed to the general meeting may be included in the notice of such meeting.

 

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Transfer of shares.

Article 13.

Any transfer of shares or of a right of usufruct on shares or the creation or release of a right of usufruct or of a right of pledge on shares shall be effected by notarial deed in accordance with the provisions set out in section 2:196 of the Civil Code.

Save in the event that the company is a party to the transaction the rights attached to a share may only be exercised after:

 

a. the company has acknowledged the transaction;

 

b. the deed has been served upon the company; or

 

c. the company has acknowledged the transaction on its own initiative by recording the same in the shareholders register,

all in accordance with the provisions set out in sections 2:196a and 2:196b of the Civil Code.

Restrictions on the transfer of shares.

Article 14.

A transfer of shares in the company—not including a transfer by the company of shares which it has acquired in its own share capital—may be effected with due observance of the articles 15 up to and including 20.

Article 15.

A shareholder who wishes to transfer one or more shares, shall require the approval of the general meeting to do so.

Article 16.

The transfer must be effected within three months after the approval has been granted or is deemed to have been granted.

 

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Article 17.

The approval shall be deemed to have been granted if the general meeting, simultaneously with the refusal to grant its approval, does not furnish the requesting shareholder with the names of one or more prospective purchasers, who are willing to purchase all the shares referred to in the request for approval, against payment in cash, the price determined in accordance with article 18; the company itself may only be designated as prospective purchaser, with the approval of the requesting shareholder. The approval shall likewise be deemed to have been granted if the general meeting has not made a decision in respect of the request for approval within six weeks of its receipt.

Article 18.

The requesting shareholder and the prospective purchasers accepted by him shall determine the price of the shares by mutual agreement.

Failing agreement, the price shall be determined by an independent expert, to be designated by mutual agreement between the managing board and the requesting shareholder.

Article 19.

Should the managing board and the requesting shareholder fail to reach agreement on the designation of the independent expert, such designation shall be made by the President of the Chamber of Commerce and Industry, within the district in which the company has its seat.

Article 20.

Once the independent expert has determined the price of the shares, the requesting shareholder shall be free, during one month after such determination of the purchase price, to decide whether he will transfer his shares to the designated prospective purchasers.

 

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Management. Supervision on management.

Article 21.

 

21.1. The company shall be managed by a managing board, under the supervision of a supervisory board. The general meeting shall determine the number of managing directors and the number of supervisory directors.

A legal entity may be appointed as a managing director but not as a supervisory director.

 

21.2. Managing directors and supervisory directors shall be appointed by the general meeting. The general meeting may at any time suspend and dismiss managing directors and supervisory directors. The supervisory board may at any time suspend a managing director.

A supervisory director shall cease to hold office at the end of the annual general meeting which is held in the financial year in which he attains the age of seventy-two. A person who is seventy-two years old or older may not be appointed as a supervisory director.

 

21.3. Together with a nomination for the appointment of a supervisory director the following information shall be given in respect of the candidate: his age, his profession, the number of shares in the share capital of the company held by him and the positions he holds or held insofar as relevant to the fulfillment of the duties as a supervisory director. Furthermore mention shall be made of the legal entities for which he serves as a supervisory director whereby, provided that if legal entities are included which belong to the same group, it shall be sufficient to mention such group. The nomination for the appointment of a supervisory director shall include the reasons.

 

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21.4. If either the general meeting or the supervisory board has suspended a managing director, or if the general meeting has suspended a supervisory director, the general meeting shall within three months after the suspension has taken effect resolve either to dismiss such managing director or supervisory director, or to terminate or continue the suspension, failing which the suspension shall lapse. A resolution to continue the suspension may be adopted only once and in such event the suspension may be continued for a maximum period of three months commencing on the day the general meeting has adopted the resolution to continue the suspension.

If within the period of continued suspension the general meeting has not resolved either to dismiss the managing director or supervisory director concerned or to terminate the suspension, the suspension shall lapse.

A managing director or a supervisory director who has been suspended shall be given the opportunity to account for his actions at the general meeting and to be assisted by an adviser.

 

21.5. In the event that one or more managing directors is prevented from acting or is failing, the remaining managing directors or the only remaining managing director shall temporarily be in charge of the management.

In the event that all managing directors are or the only managing director is prevented from acting or are / is failing, the supervisory board shall temporarily be in charge of the management; in such case the supervisory board shall be authorised to designate one or more temporary members of the managing board.

 

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Failing one or more managing directors the supervisory board shall take the necessary measures as soon as possible in order to have a definitive arrangement made.

Article 22.

 

22.1. The supervisory board shall determine the terms and conditions of employment of the managing directors.

 

22.2. The general meeting may grant one or more supervisory directors a fixed remuneration or a remuneration which is entirely or partially dependent on the results of the company. They shall be reimbursed for their expenses.

Managing board.

Article 23.

 

23.1. With due observance of these articles of association, the managing board may adopt rules governing its internal proceedings. Furthermore, the managing directors may divide their duties among themselves, whether or not by rule.

 

23.2. The managing board shall meet whenever a managing director so requires. The managing board shall adopt its resolutions by an absolute majority of votes cast.

In a tie vote, the proposal shall have been rejected.

 

23.3. The managing board may also adopt resolutions without holding a meeting, provided such resolutions are adopted in writing, by cable, by telex or by telefax and all managing directors have expressed themselves in favour of the proposal concerned.

 

23.4. The supervisory board may adopt resolutions pursuant to which clearly specified resolutions of the managing board shall require its approval. The supervisory board shall inform the managing board of adoption of any such resolution without delay.

 

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23.5. The managing board shall adhere to the instructions of the supervisory board in respect of the general financial, economic, social and personnel policies to be followed by the company.

Representation.

Article 24.

 

24.1. The managing board is authorised to represent the company. In the event that more than one managing director is in office, the company may also be represented by two managing directors acting jointly.

 

24.2. If a managing director, acting in his personal capacity, enters into an agreement with the company or conducts any litigation against the company, the company may be represented in that matter by a supervisory director to be designated by the supervisory board, unless the general meeting designates a person for that purpose or the law provides for the designation in a different manner. Such person may also be the managing director in respect of whom there is a conflict of interest. If a managing director has a conflict of interest with the company other than as referred to in the penultimate sentence, he shall, as in the case of the managing board or the other managing directors, have the power to represent the company, with due observance of the provisions of the first paragraph.

 

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Authorised signatories.

Article 25.

The managing board may grant to one or more persons, whether or not employed by the company, the power to represent the company (“procuratie”) or grant in a different manner the power to represent the company on a continuing basis. The managing board may also grant such titles as it may determine to persons, as referred to in the preceding sentence, as well as to other persons, but only if such persons are employed by the company.

Supervisory board.

Article 26.

 

26.1. Supervision of the policies of the managing board and of the general course of the company’s affairs and its business enterprise shall be exercised by the supervisory board. It shall support the managing board with advice. In fulfilling their duties the supervisory directors shall serve the interests of the company and the business enterprise which it operates. The managing board shall in due time provide the supervisory board with the information it needs to carry out its duties.

 

26.2. If there is more than one supervisory director, the general meeting shall appoint one of its members as its chairman, who will be called “Chairman of the Board”. The supervisory board shall also appoint a secretary, whether or not from among its members. Furthermore, the general meeting may appoint one or more of its members as delegate supervisory director in charge of communicating with the managing board on a regular basis. They shall report their findings to the supervisory board. The offices of chairman of the supervisory board and delegate supervisory director are compatible.

 

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26.3. With due observance of these articles of association, the supervisory board may adopt rules governing the division of its duties among its various members.

 

26.4. The supervisory board shall have access to all premises of the company and shall be authorised to examine all books, correspondence and other records and to be fully informed of all actions which have taken place.

Article 27.

 

27.1. The supervisory board shall meet whenever one of its members so requests. The supervisory board shall adopt its resolutions by an absolute majority of votes cast. In a tie vote, the proposal shall have been rejected, unless the meeting is attended by more than two supervisory directors, in which case the Chairman of the Board of the supervisory board shall have a casting vote.

 

27.2. Without prejudice to the provisions of paragraph 3 the supervisory board may not adopt resolutions if the majority of its members is not present.

 

27.3. The supervisory board may also adopt resolutions without holding a meeting, provided such resolutions are adopted in writing, by cable, by telex or by telefax and provided that all supervisory directors have expressed themselves in favour of the proposal concerned.

Such resolutions shall be recorded in the minute book of the supervisory board kept by the secretary of the supervisory board; the documents in evidence of the adoption of such resolutions shall be kept with the minute book.

 

27.4. The managing directors shall attend the meetings of the supervisory board, if invited to do so, and they shall provide in such meetings all information required by the supervisory board.

 

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27.5. At the expense of the company, the supervisory board may obtain such advice from experts as the supervisory board deems desirable for the proper fulfillment of its duties.

 

27.6. If there is only one supervisory director in office, such supervisory director shall have all rights and obligations granted to and imposed on the supervisory board and the chairman of the supervisory board by law and by these articles of association.

General meetings.

Article 28.

 

28.1. The annual general meeting shall be held within six months after the end of the financial year.

 

28.2. The agenda for this meeting shall in any case include the following items:

 

  a. the consideration of the written annual report by the managing board concerning the company’s affairs and the management as conducted;

 

  b. the adoption of the annual accounts and the allocation of profits.

The items referred to above need not be included on the agenda if the period for preparing the annual accounts and for presenting the annual report has been extended, or if the agenda includes a proposal to such effect; the item referred to in a. need not be included on this agenda either if section 2:403 of the Civil Code applies to the company. Furthermore, all items which are put on the agenda with due observance of article 29, paragraph 3 shall be discussed at the annual general meeting.

 

28.3.

A general meeting shall be convened whenever the managing board or the supervisory board considers appropriate. In addition a general meeting shall be

 

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convened as soon as one or more persons, entitled to cast at least one-tenth of the total number of votes that may be case, so request the managing board and the supervisory board, stating the items to be discussed.

Article 29.

 

29.1. General meetings shall be held in the municipality where the company has its corporate seat. Resolutions adopted at a general meeting held elsewhere shall be valid only if the entire issued share capital is represented.

 

29.2. Shareholders shall be given notice of the general meeting by the managing board. If in the event as referred to in the second sentence of article 28, paragraph 3, neither a managing director, nor a supervisory director convenes the meeting such that the meeting is held within four weeks of receipt of the request, any of the persons requesting the meeting shall be authorised to convene the same with due observance of that provided in these articles of association. The notice shall specify the items to be discussed.

 

29.3. Notice shall be given not later than on the fifteenth day prior to the date of the meeting. If the notice period was shorter or if no notice was sent, no valid resolutions may be adopted unless the resolution is adopted by unanimous vote at a meeting at which the entire issued share capital is represented.

The provision of the preceding sentence shall equally apply to matters which have not been mentioned in the notice of meeting or in a supplementary notice sent with due observance of the notice period.

Article 30.

 

30.1.

The general meeting shall be presided over by the Chairman of the Board. However, he may charge another person to preside over the general meeting in his

 

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place even if he himself is present at the meeting. If the chairman of the supervisory board is not in office or is absent and he has not charged another person to preside over the meeting in his place, the supervisory directors present at the meeting shall appoint one of them to be chairman. In the absence of all supervisory directors, the meeting shall appoint its chairman. The chairman shall designate the secretary.

 

30.2. Minutes shall be kept of the business transacted at the meeting unless a notarial record is prepared thereof. Minutes shall be adopted and in evidence of such adoption be signed by the chairman and the secretary of the meeting concerned, or alternatively be adopted by a subsequent meeting; in the latter case the minutes shall be signed by the chairman and the secretary of such subsequent meeting in evidence of their adoption.

 

30.3. The chairman of the meeting and furthermore each managing director and each supervisory director may at any time give instructions that a notarial record be prepared at the expense of the company.

Article 31.

 

31.1. Each share confers the right to cast one vote at the general meeting. Blank votes and invalid votes shall be regarded as not having been cast.

 

31.2. Resolutions shall be adopted by an absolute majority of votes cast.

 

31.3. The chairman shall determine the manner of voting provided, however, that if any person present who is entitled to vote so requires, voting in respect of the appointment, suspension and dismissal of persons shall take place by means of sealed, unsigned ballots.

 

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31.4. In a tie vote concerning the appointment of persons, no resolution shall have been adopted. In a tie vote concerning other matters, the proposal shall have been rejected; without prejudice to the provisions of article 36, paragraph 2.

 

31.5. Shareholders may be represented at a meeting by a proxy authorised in writing.

 

31.6. Managing directors and supervisory directors are authorised to attend general meetings and as such they have an advisory vote at the general meetings.

Article 32.

 

32.1. Shareholders may adopt any resolutions which they could adopt at a meeting, without holding a meeting, provided that the managing directors and supervisory directors have been able to advice regarding such resolution. Such a resolution shall only be valid if all shareholders entitled to vote have cast their votes in writing, by cable, by telex or by telefax in favour of the proposal concerned. Those shareholders shall forthwith notify the managing board and the chairman of the supervisory board of the resolution so adopted.

 

32.2. A resolution as referred to in paragraph 1 shall be recorded in the minute book of the general meeting by the chairman of the supervisory board; at the next general meeting the entry shall be read out by the chairman of that meeting. Moreover, the documents in evidence of the adoption of such a resolution shall be kept with the minute book of the general meeting and as soon as the resolution has been adopted, all shareholders shall be notified thereof.

Class meetings.

Article 33.

 

33.1. A class meeting shall be held whenever a resolution by such meeting is required.

 

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Furthermore, such meeting shall be held if required by either the managing board, the supervisory board, or one or more holders of shares of a specific class representing in the aggregate at least one-tenth of the share capital issued as shares of that class.

 

33.2. If one or more holders of shares of a specific class, referred to in paragraph 1, requires that a class meeting be held, he/they shall so notify the managing board and the supervisory board.

If in that event neither a managing director nor a supervisory director convenes the meeting such that the meeting is held within ten days of receipt of the request, each of the persons requesting shall be authorized to convene the same with due observance of that provided in these articles of association.

 

33.3. Articles 29 up to and including 32 shall be equally applicable to resolutions to be adopted by the holders of shares of a specific class, provided that the notice shall be sent not later than on the sixth day prior to the meeting.

Financial year. Annual accounts.

Article 34.

 

34.1. The financial year shall coincide with the calendar year.

 

34.2. Annually, within five months after the end of each financial year—subject to an extension of such period not exceeding six months by the general meeting on the basis of special circumstances—the managing board shall prepare annual accounts and shall make these available at the office of the company for inspection by the shareholders.

The annual accounts shall be accompanied by the auditor’s certificate, referred to in article 35, if the assignment referred to in that article has been given, by the

 

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annual report, unless section 2:403 of the Civil Code is applicable to the company, and by the additional information referred to in section 2:392, subsection 1 of the Civil Code, insofar as the provisions of that subsection apply to the company.

The annual accounts shall be signed by all managing directors and by all supervisory directors; if the signature of one or more of them is lacking, this shall be disclosed, stating the reasons thereof.

 

34.3. The company shall ensure that the annual accounts as prepared, the annual report and the additional information referred to in paragraph 2 shall be available at the office of the company as of the date of the notice of the general meeting at which they are to be discussed.

The shareholders may inspect the above documents at the office of the company and obtain a copy thereof at no cost.

 

34.4. Adoption of the annual accounts by the general meeting shall constitute a discharge of the managing board for its management and a discharge of the supervisory board for its supervision during the financial year concerned, unless a proviso is made by the general meeting and without prejudice to the provisions of sections 2:248 and 2:259 of the Civil Code.

If the company is required, in conformity with article 35, paragraph 1, to give an assignment to an auditor to audit the annual accounts and the general meeting has been unable to review the auditor’s certificate, the annual accounts may not be adopted, unless the additional information referred to in paragraph 2, second sentence, mentions a legal ground why such certificate is lacking.

 

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34.5. If the annual accounts are adopted in an amended form, a copy of the amended annual accounts shall be made available to the shareholders at no cost.

Auditor.

Article 35.

 

35.1. The company may give an assignment to an auditor, as referred to in section 2:393 of the Civil Code, to audit the annual accounts prepared by the managing board in accordance with subsection 3 of such section provided that the company shall give such assignment if the law so requires.

If the law does not require that the assignment mentioned in the preceding sentence be given the company may also give the assignment to audit the annual accounts prepared by the managing board to another expert; such expert shall hereinafter also be referred to as: auditor.

The general meeting shall be authorised to give the assignment referred to above. If the general meeting fails to do so, then either the supervisory board shall be so authorised, or the managing board if temporarily none of the supervisory directors are in office or the supervisory board fails to do so.

The assignment given to the auditor may be revoked at any time by the general meeting and by the corporate body which has given such assignment; furthermore, the assignment given by the managing board may be revoked by the supervisory board. The auditor shall report on his audit to the supervisory board and the managing board and shall issue a certificate containing its results.

 

35.2. The managing board as well as the supervisory board may give assignments to the auditor or any other auditor at the expense of the company.

 

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Profit and loss. Profit reserve A and B.

Article 36.

 

36.1. The company shall have, in addition to any other reserves, a profit reserve A and a profit reserve B, to which reserve only the holders of class A shares and class B shares, respectively, are entitled.

 

36.2. Insofar as the profit made in any financial year is not used for the clearance referred to in the last sentence of paragraph 8, it shall first be used to add to profit reserves A and to the profit reserve B as profit reservation a percentage equal to the weighted balance of the (twelve months-) EURIBOR percentage during the financial year, increased with a quarter percent (0.25%) calculated on the weighted average balance of the profit reserve A and B during that financial year. Should the profits made in any financial year be insufficient to add the aforementioned amount as principal profit to the profit reserve A and the profit reserve B respectively, paragraph 3 shall only apply after the deficit has been met.

 

36.3. The remaining profit shall be added to the profit reserve A and the profit reserve B in the proportion existing between the par value of all issued class A shares and the par value of all issued class B shares.

Shares held by the company or any subsidiary, from which no right to dividend can be derived, shall not be taken into account in determining the proportion referred to in the preceding sentence.

 

36.4. The additions and clearance referred to in paragraphs 2, 3 and 8 shall take place after the adoption of the annual accounts which show the profit available for such additions and clearance.

 

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36.5. An addition similar to that referred to in paragraph 3 shall be made if the general meeting resolves to cancel all or part of a reserve.

 

36.6. Distributions from a profit reserve referred to in paragraph 1 may be made at any time pursuant to a resolution of the general meeting adopted with an absolute majority of both the class A shares and the class B shares, with due observance of paragraph 9. The general meeting may not resolve to cancel any dividend reserve.

 

36.7. If shares are repurchased by the company, the repurchased shares shall not be shown as assets in the company’s books, but amounts totaling the amount of the purchase price of the shares shall be debited from the reserves. In the event of any dispute between one or more shareholders regarding such debiting, the auditor referred to in article 35, shall take a binding decision with respect thereto.

 

36.8. Losses shall not be charged against a profit reserve, unless it concerns losses which cannot be met or paid out of a reserve—not being a profit reserve—and the general meeting resolves, with the approval of all holders of shares corresponding with the relevant dividend reserve, to debit losses from the balance of the profit reserves concerned. Losses shall, if and insofar as possible, be debited from the profit reserves in proportion to the number of class A shares and class B shares issued at the time of the resolution to debit. If one or both profit reserves have been debited as referred to in the previous sentence, the profit made in subsequent years shall first be allocated to clear the amount which was debited from the profit reserve(s).

 

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36.9. Dividend distributions from a profit reserve shall only be made to the extent that the company’s equity exceeds the amount of its issued share capital plus the reserves which must be maintained by law.

 

36.10. A deficit may be paid out of the reserves prescribed by law only to the extent permitted by law.

Article 37.

 

37.1. Dividends shall be due four weeks after a resolution has been adopted to make a dividend distribution from a profit reserve, unless the general meeting sets another date for this on the proposal of the managing board. Such date may not be later than three months after the resolution to distribute dividend.

 

37.2. Dividends which have not been collected within five years of the start of the second day on which they became due shall revert to the company.

 

37.3. The general meeting may resolve that a dividend distribution from the profit reserves shall be made, in whole or in part, in a form other than in cash.

 

37.4. In derogation from the provisions in article 36 paragraph 4 regarding adoption of the annual accounts and if the general meeting so determines on the proposal of the managing board, an interim addition to the profit reserves shall be made either from the profits or from a reserve.

 

37.5. Without prejudice to article 36, paragraph 3, interim distributions shall be made if the general meeting so determines on the proposal of the managing board.

 

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Share premium reserves A and B.

Article 38.

 

38.1. In addition to any other reserves, the company has a share premium reserve A and a share premium reserve B to which reserve only the holders of class A shares and class B shares, respectively, are entitled.

 

38.2. The share premium paid on the class A shares and the class B shares shall be booked on the share premium reserve A and on the share premium reserve B, respectively.

 

38.3. In the event of any issue—other than to the debit of a reserve of the company—or disposal by the company of shares of a specific class, amounts totaling the value of the consideration received by the company for the issued or disposed shares shall be credited to the share premium of the particular class reserves.

In the case of any dispute between one or more shareholders regarding such crediting, the auditor referred to in article 35 shall take a binding decision with respect thereto.

 

38.4. Article 36 paragraphs 4, 6, 7, 8, 9 and 10 shall be mutatis mutandis applicable to the share premium reserves A and B.

Liquidation.

Article 39.

 

39.1. If the company is dissolved pursuant to a resolution of the general meeting, it shall be liquidated by the managing board, under the supervision of the supervisory board, if and to the extent that the general meeting shall not resolve otherwise.

 

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39.2. The general meeting shall determine the remuneration of the liquidators and of the persons charged with the supervision of the liquidation.

 

39.3. The liquidation shall take place with due observance of the provisions of the law. During the liquidation period these articles of association shall, wherever possible, remain in full force.

 

39.4. From the balance of the assets of the company remaining after all liabilities have been paid, the following payments shall be made successively by way of liquidation payment:

 

  a. to each shareholder an amount equal to the par value of his shares;

 

  b. if the proportion between the amounts of the profit reserve A and profit reserve B—after the relevant profit reserve has been increased by the amounts to be cleared pursuant to article 36 paragraph 8 and has furthermore been increased by the amounts to be added pursuant to article 36 paragraph 2—is not the same as the proportion between the par value amounts of all issued shares corresponding with those profit reserves, to the holders of the shares corresponding with whichever dividend reserve is proportionately too large the amount of the relative difference between the amounts of the profit reserves;

 

  c. to the holders of class A shares the amount of the profit reserve A and to the holders of class B shares the amount of the profit reserve B, after the relevant profit reserve has been increased as referred to in b, and has been reduced by the amount of the distribution referred to in b; and

 

  d. the remaining balance to all shareholders.

 

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39.5. After the legal entity has ceased to exist, the books and records of the company shall remain in the custody of the person designated for that purpose by the liquidators for a period of seven years.

The shares, numbered 70,001 up to and including 100,000 and 142,001 up to and including 191,000 outstanding before the execution of this deed, are herewith converted into seventy-nine thousand (79.000) shares A, numbered Al up to and including A79.000.

The shares, numbered 1 up to and including 70,000, 100,001 up to and including 142,000 and 191,001 up to and including 230,900 outstanding before the execution of this deed, are herewith converted into one hundred and fifty one thousand nine hundred (151.900) shares B, numbered Bl up to and including B151.900.

The general reserve existing before the execution of this deed will be added in the proportion existing between the par value of the issued class A shares and class B shares, respectively, and the amount of the issued share capital, to the share premium reserve with the corresponding letter. Furthermore the profit reserve existing before the execution of this deed will be added in the proportion existing between the par value of all issued class A shares and class B shares, respectively, and the amount of the issued share capital, to the profit reserve with a corresponding letter.

The required ministerial declaration of no-objection was granted day on the twentieth day of October two thousand, number B.V. 193454.

The ministerial declaration of no-objection and a document in evidence of the resolutions, referred to in the head of this deed, are attached to this deed.

In witness whereof the original of this deed, which will be retained by me, notaris, is executed in Amsterdam, on the date first mentioned in the head of this deed.

 

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Having conveyed the substance of the deed and given an explanation thereto and following the statement of the person appearing that he has taken cognisance of the contents of the deed and agrees with the same, this deed is signed immediately after reading of those parts of the deed which the law requires to be read, by the person appearing, who is known to me, and by myself, notaris.

 

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EXHIBIT 3.11

THE COMPANIES ACT 1985

PRIVATE COMPANY LIMITED BY SHARES

MEMORANDUM OF ASSOCIATION

of

NIMBUSPATH LIMITED

 

1. Name

 

1.1 The Company’s name is “Nimbuspath Limited”.

 

2. Registered Office

 

2.1 The Company’s registered office is to be situated in England and Wales.

 

3. Objects

 

3.1 The Company’s object is to carry on business as a general commercial company and accordingly to carry on any trade or business whatsoever and so that the company has power to do all such things as are incidental or conducive to the carrying on of any trade or business by it and in addition and without prejudice to the generality of the foregoing the further objects for which the Company is established are:

 

  (A) To carry on all or any of the businesses of general merchants and traders, cash and credit traders, manufacturers agents and representatives, insurance brokers and consultants, estate and advertising agents, mortgage brokers, financial agents, advisers, managers and administrators, hire purchase and general financiers, brokers and agents, commission agents, importers and exporters, manufacturers, retailers, wholesalers, buyers, sellers, distributors and shippers of, and dealers in all products, goods, wares, merchandise and produce of every description, to participate in, undertake, perform and carry on all kinds of commercial, industrial, trading and financial operations and enterprises; to carry on all or any of the businesses of marketing and business consultants, advertising agents and contractors, general storekeepers, warehousemen, discount traders, mail order specialists, railway, shipping and forwarding agents, shippers, traders, capitalists and financiers either on the Company’s own account or otherwise, printers and publishers; haulage and transport contractors, garage proprietors, operators, hirers and letters on hire of, and dealers in motor and other vehicles, craft, plant, machinery, tools and equipment of all kinds; and to purchase or otherwise acquire and take over any businesses or undertakings which may be deemed expedient, or to become interested in, and to carry on or dispose of, remove or put an end to the same or otherwise deal with any such businesses or undertakings as may be thought desirable.


  (B) To acquire and assume for any estate or interest and to take options over, construct, develop or exploit any property real or personal, and rights of any kind and the whole or any part of the undertaking, assets and liabilities of any person and to act and carry on business as a holding company.

 

  (C) To manufacture, process, import, export, deal in and store any goods and other things and to carry on the business of manufacturers, processors, importers, exporters and storers of and dealers in any goods and other things.

 

  (D) To acquire and exploit lands, mines and mineral rights and to acquire, explore for and exploit any natural resources and to carry on any business involving the ownership or possession of land or other immovable property or buildings or structures thereon and to construct, erect, install, enlarge, alter and maintain buildings, plant and machinery and to carry on business as builders, contractors and engineers.

 

  (E) To provide services of all descriptions and to carry on business as advisers, consultants, brokers and agents of any kind.

 

  (F) To advertise, market and sell the products of the Company and of any other person and to carry on the business of advertisers or advertising agents or of a marketing and selling organisation or of a supplier, wholesaler, retailer, merchant or dealer of any kind.

 

  (G) To provide technical, cultural, artistic, educational, entertainment or business material, facilities or services and to carry on any business involving any such provision.

 

  (H) To lend money, and grant or provide credit and financial accommodation, to any person and to carry on the business of a banking, finance or insurance company.

 

  (I) To invest money of the Company in any investments and to hold, sell or otherwise deal with such investments, and to carry on the business of a property or investment company.

 

  (J) To acquire and carry on any business carried on by a subsidiary or a holding company of the Company or another subsidiary of a holding company of the Company.

 

  (K) To enter into any arrangements with any government or authority or person and to obtain from any such government or authority or person any legislation, orders, rights, privileges, franchises and concessions and to carry out, exercise and comply with the same.

 

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  (L) To borrow and raise money and accept money on deposit and to accept, draw, make, create, issue, execute, discount, endorse, negotiate and deal in bills of exchange, promissory notes and other instruments and securities, whether negotiable or otherwise and to engage in currency exchange and interest rate transactions, including but not limited to dealings in foreign currency, spot and forward rate exchange contracts, futures, options, forward rate agreements, swaps, caps, floors, collars and any other foreign exchange or interest rate hedging arrangements and such other instruments as are similar to, or derived from any of the foregoing whether for the purpose of making a profit or avoiding a loss or managing a currency or interest rate exposure or any other exposure or for any other purpose and to enter into any guarantee, contract of indemnity or suretyship.

 

  (M) To enter into any guarantee, contract of indemnity or suretyship and in particular (without prejudice to the generality of the foregoing) to guarantee, support or secure, with or without consideration, the performance of any obligations or commitments of, and the repayment or payment of the principal amounts of and any premiums, interest, dividends and other moneys payable on or in respect of any securities or liabilities of, any person, including (without prejudice to the generality of the foregoing) any subsidiary or holding company of the Company or another subsidiary of a holding company of the Company or otherwise associated with the Company, and to secure or discharge any debt or obligation in any manner and in particular (but without prejudice to the generality of the foregoing) by mortgages of or charges upon all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company or by the creation and issue of securities or in any other manner or any combination thereof.

 

  (N) To amalgamate or enter into partnership or any profit-sharing arrangement with, or to co-operate or participate in any way with, or to take over or assume any obligation of, or to assist or subsidise any person.

 

  (O) To apply for and take out, purchase or otherwise acquire any trade and service marks and names, designs, patents, patent rights, inventions and secret processes and to carry on the business of an inventor, designer or research organisation.

 

  (P) To sell, exchange, mortgage, charge, let on rent, share of profit, royalty or otherwise, grant licences, easements, options, servitudes and other rights over, and in any other manner deal with, or dispose of, all or any part of the undertaking, property and assets (present and future) of the Company for any consideration and in particular (without prejudice to the generality of the foregoing) for any securities.

 

  (Q) To issue and allot securities of the Company for cash or in payment or part payment for any real or personal property purchased or otherwise acquired by the Company or any services rendered to the Company or as security for any obligation or amount (even if less than the nominal amount of such securities) or for any other purpose.

 

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  (R) To give any remuneration or other compensation or reward for services rendered or to be rendered in placing or procuring subscriptions of, or otherwise assisting in the issue of, any securities of the Company or in or about the formation of the Company or the conduct or course of its business, and to establish or promote, or concur or participate in establishing or promoting, any company, fund or trust and to subscribe for, underwrite, purchase or otherwise acquire securities of any company, fund or trust and to carry on the business of company, fund, trust or business promoters or managers and of underwriters or dealers in securities, and to act as director of and as secretary, manager, registrar or transfer agent for any other company and to act as trustees of any kind and to undertake and execute any trust.

 

  (S) To pay all the costs, charges and expenses preliminary or incidental to the promotion, formation, establishment and incorporation of the Company, and to procure the registration or incorporation of the Company in or under the laws of any place outside England.

 

  (T) To grant pensions, annuities, gratuities and superannuation or other allowances and benefits, including allowances on death, to any directors, officers or employees or former directors, officers or employees of the Company or any company which at any time is or was a subsidiary or a holding company of the Company or another subsidiary of a holding company of the Company or otherwise associated with the Company or of any predecessor in business of any of them, and to the relations, connections or dependants of any such persons, and to other persons whose service or services have directly or indirectly been of benefit to the Company or who the Company considers have any moral claim on the Company or to their relations, connections or dependants, and to establish or support any associations, institutions, clubs, schools, building and housing schemes, funds and trusts, and to make payments towards insurances or other arrangements likely to benefit any such persons or otherwise advance the interests of the Company or of its Members, and to subscribe, guarantee or pay money for any purpose likely, directly or indirectly, to further the interests of the Company or of its Members or for any national, charitable, benevolent, educational, social, public, general or useful object.

 

  (U) To purchase and maintain for any director, other officer or auditor of the Company insurance against any liability against which the Company may lawfully insure any such persons including (without prejudice to the generality of the foregoing) any liability which by virtue of any rule of law would attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company.

 

  (V) To cease carrying on or wind up any business or activity of the Company, and to cancel any registration of and to wind up or procure the dissolution of the Company in any state or territory.

 

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  (W) To distribute any of the property of the Company among its creditors and Members in specie or kind.

 

  (X) To do all or any of the things or matters aforesaid in any part of the world and either as principals, agents, contractors, trustees or otherwise and by or through trustees, agents or otherwise and either alone or in conjunction with others.

 

  (Y) To carry on any other business or activity and do anything of any nature which in the opinion of the Company is or may be capable of being conveniently carried on or done in connection with the above, or likely directly or indirectly to enhance the value of or render more profitable all or any part of the Company’s undertaking, property or assets or otherwise to advance the interests of the Company or of its Members.

 

  (Z) To do all such other things as in the opinion of the Company are or may be incidental or conducive to the attainment of the above objects or any of them.

AND it is hereby declared that in this clause “ company ”, except where used in reference to this Company, shall include any partnership or other body of persons, whether incorporated or not incorporated, and whether formed, incorporated, domiciled or resident in the United Kingdom or elsewhere, “ person ” shall include any company as well as any other legal or natural person, “ subsidiary ” and “ holding company ” shall include, respectively, “ subsidiary undertaking ” and “ parent undertaking ”, “ securities ” shall include any fully, partly or nil paid or no par value share, stock, unit, debenture, debenture or loan stock, deposit receipt, bill, note, warrant, coupon, right to subscribe or convert, or similar right or obligation, “ and ” and “ or ” shall mean “ and/or ” where the context so permits, “ other ” and “ otherwise ” shall not be construed ejusdem generis where a wider construction is possible, and the objects specified in the different paragraphs of this clause shall not, except where the context expressly so requires, be in any way limited or restricted by reference to or inference from the terms of any other paragraph or the name of the Company, but may be carried out in as full and ample a manner and shall be construed in as wide a sense as if each of the said paragraphs defined the objects of a separate, distinct and independent company.

 

4. Members’ Liability

 

4.1 The liability of the Members is limited.

 

5. Share Capital

 

5.1 The Company’s share capital is £1,000 divided into 1000 shares of £1 each, and the Company shall have the power to divide the original or any increased capital into several classes, and to attach thereto any preferential, deferred, qualified or other special rights, privileges, restrictions or conditions.

 

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THE COMPANIES ACT 1985

PRIVATE COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION

of

NIMBUSPATH LIMITED

 

1. Table A

 

1.1 The Regulations in Table A in the schedule to the Companies (Tables A to F) Regulations 1985, as amended at the date of adoption of these Articles (“ Table A ”), shall except where the same are excluded or varied by or inconsistent with these Articles apply to the Company. No other regulations set out in any statute or statutory instrument concerning companies shall apply as regulations of the Company.

 

2. Interpretation

 

2.1 In these Articles unless the context otherwise requires:

an Address ” in relation to electronic communications includes any number or address used for the purposes of such communications;

these Articles ” means these Articles of Association in their present form or as from time to time altered;

the “ Companies Acts ” means every statute from time to time in force concerning companies insofar as the same applies to the Company;

Member ” means a member of the Company;

every reference in Table A to the “ Act ” shall be construed as if the reference were to the Companies Acts;

any words or expressions defined in the Companies Act 1985 in force at the date when these Articles or any part thereof are adopted shall bear the same meaning in these Articles or such other part (as the case may be);

where for any purpose an ordinary resolution of the Company is required, a special or extraordinary resolution shall also be effective, and where an extraordinary resolution is required a special resolution shall also be effective.

 

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3. Unissued share capital

 

3.1 Subject to the provisions of the Companies Acts and these Articles and to any direction to the contrary which may be given by ordinary or other resolution of the Company, any unissued shares of the Company (whether forming part of the original or any increased capital) shall be at the disposal of the Directors who may offer, allot, grant options over or grant any right or rights to subscribe for such shares or any right or rights to convert any security into such shares or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as the Directors may determine.

 

3.2 For the purposes of section 80 of the Companies Act 1985, the Directors are generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities as defined in the said section up to an aggregate nominal amount of £1,000. This authority shall expire five years from the date of incorporation of the Company but may be previously revoked or varied by the Company in general meeting and may from time to time be renewed by the Company in general meeting for a further period not exceeding five years. The Company may make an offer or agreement before the expiry of this authority that would or might require relevant securities to be allotted after this authority has expired and the Directors may allot relevant securities in pursuance of any such offer or agreement as if this authority had not expired.

 

3.3 This Article shall not apply to redeemable shares which shall be governed by the provisions of Article 4 of these Articles.

 

3.4 Sub-section (1) of section 89 and sub-sections (1) to (6) (inclusive) of section 90 of the Companies Act 1985 shall not apply.

 

4. Redeemable shares

 

4.1 Subject to the provisions of the Companies Acts, any shares may, with the sanction of a special resolution, be issued on terms that they are, or at the option of the Company or the Member registered in respect of such shares are liable, to be redeemed on such terms and in such manner as may be provided for by these Articles. Regulation 3 of Table A shall not apply.

 

5. Transfers of shares

 

5.1 The directors may, in their absolute discretion and without assigning any reason therefor, decline to register any transfer of any share, whether or not it is a fully paid share. Regulation 24 of Table A shall not apply.

 

6. Notice of general meetings

 

6.1 Notice of every general meeting shall be given in any manner authorised by or under these Articles to all Members other than such as, under the provisions of these Articles or the terms of issue of the shares they hold, are not entitled to receive such notices from the Company, Provided that any Member may in writing or by electronic communication waive notice of any meeting either prospectively or retrospectively and if he shall do so it shall be no objection to the validity of such meeting that notice was not given to him.

 

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7. Proceedings at general meetings

 

7.1 At any general meeting a poll may be demanded by the Chairman or by any Member present in person or by proxy and Regulation 46 of Table A shall be varied accordingly.

 

8. Votes of Members

 

8.1 Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands every Member present in person and every person present as a proxy for a Member or Members shall have one vote, and on a poll every Member shall have one vote for each share of which he is the holder. Regulation 54 of Table A shall not apply.

 

8.2 The appointment of a proxy and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, shall, in the case of an appointment in writing, be deposited at the registered office of the Company (or at such other place in the United Kingdom as is specified for that purpose in the notice of meeting or any instrument of proxy sent by the Company in relation to the meeting) not less than twenty-four hours before the time for holding the meeting or adjourned meeting at which the person named in the appointment proposes to vote, or handed to the Chairman of the meeting or adjourned meeting before the commencement of such meeting or, in the case of an appointment contained in an electronic communication, where an address has been specified in:

 

  (A) the notice convening the meeting; or

 

  (B) in any instrument of proxy sent out by the Company in relation to the meeting; or

 

  (C) in any invitation contained in an electronic communication to appoint a proxy issued by the Company in relation to the meeting

shall be received at such address not less than twenty-four hours before the time for holding the meeting or adjourned meeting. In default, the appointment shall not be treated as valid. Regulation 62 of Table A shall not apply.

 

9. Alternate Directors

 

9.1 An alternate Director may be paid expenses and shall be entitled to be indemnified by the Company to the same extent mutatis mutandis as if he were a Director but shall not be entitled to receive from the Company any fee in his capacity as an alternate Director except only such part (if any) of the remuneration otherwise payable to the Director appointing him as such Director may by notice in writing to the Company from time to time direct and Regulation 66 of Table A shall be varied accordingly.

 

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10. The seal

 

10.1 The Company may exercise all the powers conferred by the Companies Acts with regard to having any official seal, or otherwise in relation to the execution of documents by the Company, and such powers shall be vested in the Directors. Any document to which an official seal is affixed shall be signed by such persons, if any, as the Directors may from time to time determine and unless otherwise so determined shall be signed by a Director and by the Secretary or a second Director. Any document to which an official seal is affixed or which is otherwise executed by the Company shall be delivered at such time, and in such manner, as the Directors may from time to time determine, and shall not be deemed to be delivered by the Company solely as a result of having been executed by the Company. Regulation 101 of Table A shall not apply.

 

11. Delegation of Directors’ powers

 

11.1 The Directors may delegate any of their powers to committees consisting of such person or persons (whether Directors or not) as they think fit. The Directors may also entrust to and confer upon any Director any of the powers exercisable by them. Any such delegation may be made upon such terms and conditions and with such restrictions as they may think fit, and either collaterally with or to the exclusion of their own powers, and the Directors may from time to time revoke, withdraw, alter or vary all or any of such powers. Subject to any such terms, conditions or restrictions, the proceedings of a committee with two or more members shall be governed by these Articles regulating the proceedings of directors so far as they are capable of applying. Regulation 72 of Table A shall not apply.

 

12. Appointment and retirement of Directors

 

12.1 Without prejudice to any other provisions of or incorporated in these Articles governing the appointment and removal of Directors, any Member or Members holding a majority in nominal value of such of the issued share capital for the time being of the Company as carries the right of attending and voting at general meetings of the Company may by memorandum in writing signed by or on behalf of him or them and delivered to the registered office of the Company or tendered at a meeting of the Board, or of the Company in general meeting, or sent by electronic communication, at any time and from time to time appoint any person to be a Director either to fill a casual vacancy or as an addition to the existing Directors or remove any Director from office howsoever appointed.

 

12.2 The Directors and the Company by ordinary resolution shall each have power at any time and from time to time to appoint any person to be a Director either to fill a casual vacancy or as an addition to the existing Directors. Any Director so appointed shall (subject to Regulation 81 of Table A and to the provisions of the Companies Acts) hold office until he is removed pursuant to these Articles.

 

12.3 Regulations 73 to 80 (inclusive), Regulation 81(e) and the last sentence of Regulation 84 of Table A shall not apply.

 

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13. Directors’ gratuities and pensions

 

13.1 The Directors on behalf of the Company may exercise all the powers of the Company to grant pensions, annuities, gratuities and superannuation or other allowances and benefits in favour of any person including any Director or former Director or the relations, connections or dependants of any Director or former Director. A Director or former Director shall not be accountable to the Company or the Members for any benefit of any kind conferred under or pursuant to this Article and the receipt of any such benefit shall not disqualify any person from being or becoming a Director of the Company.

 

14. Proceedings of Directors

 

14.1 The Directors may meet for the despatch of business, adjourn and otherwise regulate their meetings as they think fit. Questions arising at any meetings shall be determined by a majority of votes. In case of an equality of votes the chairman of the meeting shall have a second or casting vote. A Director may, and the Secretary at the request of a Director shall, at any time call a meeting of the Directors. Notice of any meeting of the Directors may be given by any electronic communication. It shall not be necessary to give notice of a meeting of the Directors to any Director for the time being absent from the United Kingdom unless

 

  (A) he has given to the Company an address, whether within or outside the United Kingdom, at which notices can be served on him, or

 

  (B) in the opinion of the Secretary or Director calling the meeting it is possible at the time notice is to be given to give him such notice by electronic communication and it will be possible for him to participate in the meeting by telephone or other communication equipment as referred to in Regulation 14.3 of these Articles.

Meetings may be held in any part of the world.

 

14.2 The quorum necessary for the transaction of the business of the Directors may be fixed from time to time by the Directors and, unless so fixed at any other number, shall be two. An alternate Director shall, if his appointor is not present, be counted in the quorum. A meeting of the Directors at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors. Any Director who ceases to be a Director at a meeting of the Directors may continue to be present and act as a Director, and be counted in the quorum, until termination of the meeting if no other Director objects and if otherwise a quorum of Directors would not be present.

 

14.3 A Director shall be treated as present in person at a meeting of the Directors notwithstanding that he is not physically present at the place where the meeting is held if he is in communication with the meeting by conference telephone or other communication equipment permitting each person physically present at or so in communication with the meeting to hear and be heard by each other such person. Such a Director shall be counted in the quorum of the meeting and shall be entitled to vote thereat.

 

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14.4 Subject to the provisions of these Articles and provided a Director shall have disclosed such interest in accordance with Regulation 85 of Table A, a Director shall be entitled to vote in respect of any transaction, contract, arrangement or agreement with the Company in which he is in any way, whether directly or indirectly, interested and if he shall do so his vote shall be counted and he shall be taken into account in ascertaining whether a quorum is present. For the purpose of this Article, an interest of a person who is, for any purpose of the Act, connected with a Director shall be treated as an interest of the Director and, in relation to an alternate Director, an interest of his appointor shall be treated as an interest of the alternate Director without prejudice to any interest which the alternate Director has otherwise.

 

14.5 Regulations 88-89 (inclusive) and 94-98 (inclusive) of Table A shall not apply.

 

15. Notices

 

15.1 Any notice or other document (including a share certificate or other document of title) may be served on or delivered to any Member by the Company either personally or by sending it through the post in a prepaid letter addressed to such Member at his registered address as appearing in the Register of Members, or by delivering it to or leaving it at such registered address, addressed as aforesaid, or (except for a share certificate or other document of title) by giving it using electronic communications to an address notified to the company for that purpose by the Member. In the case of joint holders of a share, service or delivery of any notice or other document on or to one of the joint holders shall for all purposes be deemed a sufficient service on or delivery to all the joint holders. Any notice or other document served or delivered in accordance with these Articles shall be deemed duly served or delivered notwithstanding that the Member is then dead or bankrupt or otherwise under any legal disability or incapacity and whether or not the Company had notice thereof. Any such notice or other document sent by first-class post shall be deemed to have been served or delivered on the day after the day when the same was put in the post, and in proving such service or delivery it shall be sufficient to prove that the notice or document was properly addressed, prepaid and put in the post. Any such notice or other document sent by an electronic communication shall be deemed to have been served 48 hours after the same was sent and proof that the same was sent in accordance with guidance issued by the Institute of Chartered Secretaries and Administrators shall be conclusive evidence that the notice was given. Regulations 112, 115 and 116 of Table A shall not apply.

 

16. Winding up

 

16.1

If the Company shall be wound up (whether the liquidation is voluntary, under supervision, or by the Court) the liquidator may, with the authority of an extraordinary resolution and subject to any provision sanctioned in accordance with the provisions of the Companies Acts, divide among the Members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such values as he deems fair upon any assets to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The Liquidator may, with the like

 

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authority, vest the whole or any part of the assets in trustees upon such trusts for the benefit of Members as the Liquidator with the like authority shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability and the Liquidator may make any provision referred to in and sanctioned in accordance with the provisions of the Companies Acts. Regulation 117 of Table A shall not apply.

 

17. Indemnity

 

17.1 Subject to the provisions of the Companies Acts, the Company may purchase and maintain for any of the Company’s Directors, alternate Directors, Auditors, Secretaries and other officers insurance against any liability which by virtue of any rule of law would otherwise attach to any such person in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company and (whether or not any such insurance is effected) every such person shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation thereto including any liability incurred by him in defending any proceedings, civil or criminal, that relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company and in which judgment is given in his favour (or the proceedings otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted by the Court. Regulation 118 of Table A shall not apply.

 

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EXHIBIT 3.12

«Brandbrew S.A.»

limited liability company (société anonyme)

Luxembourg

R.C.S. Luxembourg, section B number 75 696

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COORDINATED ARTICLES OF ASSOCIATION as of 25 July 2007

**********************************************************************************


CHAPTER I.- FORM, NAME, REGISTERED OFFICE, OBJECT, DURATION

Article 1. Form, Name

There is hereby established by the subscribers and all those who may become owners of the shares hereafter created a company (the “Company”) in the form of a limited liability company ( société anonyme ) which will be governed by the laws of the Grand Duchy of Luxembourg and by the present articles of association.

The Company will exist under the name of “ BRANDBREW S.A. ”.

Article 2. Registered Office

The registered office of the Company is located in the municipality of Schuttrange.

The registered office may be transferred to any other place within the City of Luxembourg by a resolution of the board of directors.

If the board of directors would consider that extraordinary political, economic or social developments that would interfere with the normal activities of the Company at its registered office or with the ease of communications with such office or between such office and persons abroad are likely to occur or are imminent, the Company may temporarily transfer the registered office abroad, until the complete cessation of these abnormal circumstances; such temporary measures will have no effect on the nationality of the Company, which, notwithstanding the temporary transfer of the registered office, will remain a company governed by the laws of Luxembourg. Such declaration of transfer will be made and notified to third parties by one of the executive bodies of the Company having powers to bind the Company for ordinary and daily management.

Article 3. Object

The object of the Company is to perform, in Luxembourg or abroad, financing operations by granting loans to companies belonging to the international group of which the Company is a member. Such loans would be refinanced by, amongst other things but without limitation, financial means and instruments such as loans granted by shareholders or group companies or banks.

The Company may also carry out any financial operation for the benefit of companies belonging to the Company’s group.

The Company may also perform any operations directly or indirectly related to the holding of interests under any form whatsoever in any company, as well as the administration, management, control and development of such holdings. The object of the Company is also the holding of trademarks.

The Company may, among others, use its funds to create, manage, enhance and wind-up any portfolio composed of securities and trademarks of any kind, to participate in the creation, in the development and in the control of any company, to acquire by way of contribution, subscription, underwriting, call option or otherwise, any security and trademarks, to transfer these securities and trademarks by way of sale, assignment, exchange or otherwise, to develop these securities and trademarks and to grant support, loans, advances or guarantees to any company in which the Company has an interest.

In general, the Company may carry out any financial, commercial, industrial, moveable or immoveable operation and may take any measure to preserve its rights and to perform any kind of operations which are directly or indirectly related to its object or which are likely to promote the development thereof.

 

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Article 4. Duration

The Company is formed for an unlimited duration.

It may be dissolved at any time by a decision of the general meeting of shareholders, voting in accordance with the provision provided by law.

CHAPTER II.- CAPITAL, SHARES

Article 5. Issued Capital

The issued capital of the Company is set at seven hundred seventeen million five hundred seventy-six thousand euro (EUR 717,576,000.-) represented by seven million one hundred seventy-five thousand seven hundred and sixty (7,175,760) shares without nominal value, all of which are fully paid up.

Article 6. Form of the Shares

The shares are and will remain in registered form and the Company will keep a shareholders register to this effect.

The Company may also issue multiple registered share certificates.

CHAPTER III.- BOARD OF DIRECTORS, STATUTORY AUDITORS

Article 7. Board of Directors

The Company shall be managed by a board of directors, composed of at least three members, who need not be shareholders themselves.

The board members shall be appointed by the general meeting of shareholders, which will determine their number and the duration of their mandate, which may not exceed six years, and the members will remain in office until the appointment of their successors. They are eligible for re-appointment and may be removed at any time, with or without cause, by the shareholders’ meeting.

In the event of one or several vacancies in the board of directors, the remaining board members may elect a new director by a majority vote until the next general meeting of shareholders.

Article 8. Meetings of the board of directors

The board of directors shall elect one of its members to be chairman. It may also appoint a secretary, who need not be a director himself and who will be responsible for keeping the minutes of the meetings of the board of directors and the general shareholders’ meetings.

The board of directors will meet upon call by the chairman. A meeting of the board of directors must be convened if any two of its members so require.

The chairman will preside at all general shareholders’ meetings and all board meetings, except in case of his absence where the general shareholders’ meeting or the board of directors may appoint another member of the board of directors as chairman of the meeting by majority vote.

Written notice of any meeting of the board of directors shall be given to all the directors at least one week prior to the date of the meeting, except in case of emergency or with the consent of all the persons entitled to attend such meeting. The convening notice shall indicate the place and the agenda of the meeting.

 

3


Each director may waive this convening notice by his consent in writing or by means of a telefax, a cable, a telegram or a telex. No separate convening notice is required for meetings held at times and places specified in a resolution previously adopted by the board of directors.

Each meeting of the board of directors shall be held at Luxembourg or at any other place that the board of directors may choose from time to time.

Any member of the board of directors may act at any meeting of the board of directors by appointing in writing or by means of a telefax, a cable, a telegram or a telex another member of the board of directors as his proxy.

The board of directors can deliberate or act validly only if at least the majority of the directors is present or represented.

Decisions shall be taken by a majority of the votes of the directors present or represented at such meeting.

In case of urgency, a written decision, signed by all the members of the board of directors, is proper and valid as though it had been adopted at a meeting of the board of directors which was duly convened and held. Such decision may be documented in a single document or in several separate documents having the same content and each of them signed by one or several directors.

Article 9. Minutes of the Meetings of the Board of Directors

The minutes of any meeting of the board of directors will be signed by the chairman of the meeting. Any proxies will remain attached thereto.

Copies or extracts of these minutes to be produced in judicial proceedings or otherwise may be signed by the chairman or by any two directors.

Article 10. Powers of the Board of Directors

The board of directors is vested with the broadest powers to perform all acts necessary or useful for achieving the Company’s object.

All powers not expressly reserved to the general shareholders’ meeting by law or these articles are within the competence of the board of directors.

Article 11. Delegation of Powers

The board of directors may delegate the daily management of the Company and the representation of the Company within such daily management to one or more directors, managers, attorneys, employees, or other agents who do not need to be shareholders of the Company, or may grant other special powers or proxies or entrust permanent or temporary functions to specific persons of his choice acting individually or jointly.

The delegation of the daily management to a director is subject to the prior authorisation by the general shareholders’ meeting.

Article 12. Conflicts of Interest

No contract or other transaction between the Company and any other company or firm shall be affected or invalidated by the mere fact that one (or several) member(s) of the board of directors, or any officer of the Company, has a personal interest in, or is a director, shareholder proxy, representative or employee of such other company or firm. Any director or officer of the Company who is at the same time director, shareholder, officer or employee of another company or firm with

 

4


which the Company shall contract or otherwise engage in business shall not, by reason of such affiliation with such other company or firm, be prevented from giving its opinion, voting or acting upon any matters with respect to such contract or other business.

If any director or representative of the Company has or may have any personal interest in any transaction of the Company, he/she shall disclose such personal interest to the Board of Directors and shall not take part in the deliberations or vote on any such transaction. Such transaction and the personal interest of the directors or representative therein shall be disclosed in a special report to the next general meeting of shareholders.

The Company shall indemnify any director or officer of the Company, their successors, heirs, executors and administrators, against damages and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been director or officer of the Company, or, at the request of the Company, any other company of which the Company is a shareholder or creditor and by which he/she is not entitled to be indemnified, except in relation to matters in which he/she shall be declared liable for gross negligence or misconduct or for not complying with its duties towards the Company; in the event of a settlement, indemnification shall be provided only in connection with such matters covered by the settlement and only if the Company is advised by its legal counsel that the person to be indemnified has not failed to its duties towards the Company. The foregoing right of indemnification shall not exclude other rights to which the persons to be indemnified may be entitled.

Article 13. Representation of the Company

The Company will be bound towards third parties by the joint signatures of any two directors, or by the single signature of the person to whom the daily management has been delegated within such daily management, or by the joint signatures or single signature of any person(s) to whom such signatory power has been delegated by the board of directors but only within the limits of such power.

Article 14. Statutory Auditors

The operation of the Company shall be reviewed by one or more statutory auditors, who do not need to be shareholders themselves.

The statutory auditor(s) will be appointed by the general meeting of shareholders, which will determine the number of such auditors and the duration of their mandate, which may not exceed six years. They will remain in office until their successors are elected and they are eligible for re-appointment. They may be removed at any time, with or without cause, by a resolution of the general meeting of shareholders.

CHAPTER IV.- GENERAL MEETING OF SHAREHOLDERS

Article 15. Powers of the General Meeting of Shareholders

Any regularly constituted general meeting of shareholders of the Company represents the entire body of shareholders.

The general meeting of shareholders shall have all powers granted to it by law.

Article 16. Annual General Meeting

The annual general meeting of shareholders will be held in the City of Luxembourg at the registered office of the Company or any other place specified in the convening notice on the first Monday of April, each year at 3.00pm.

 

5


If such day is a public holiday, the meeting will be held on the next following business day.

Article 17. Other General Meetings

The board of directors may convene other general meetings of shareholders. Such meetings must be convened if shareholders representing at least one fifth of the Company’s capital so require.

General meetings of shareholders, including the annual general meeting of shareholders, may be held abroad each time the board of directors consider, in its sole discretion, that circumstances of force majeure so require.

Article 18. Procedure, Vote

General meetings shall be convened by the board of directors or by the statutory auditor(s) in compliance with the conditions set forth by law. The convening notice will specify the agenda of the general meeting of the shareholders.

If all the shareholders are present or represented at a general meeting of shareholders and if they state that they have been duly informed of the agenda of the meeting, the meeting may be held without prior notice.

Each shareholder is entitled to attend and speak at any general meeting of shareholders by appointing in writing, by fax, cable, telegram or telex, another person who need not be a shareholder himself, as a proxy holder.

The board of directors may determine any additional conditions that must be fulfilled in order for a shareholder to take part in a general meeting of shareholders.

Unless otherwise provided by law, the decisions are taken at the simple majority, notwithstanding the number of shares represented at the meeting.

Each share entitles to one vote.

Copies or extracts of the minutes of the general shareholders’ meeting to be produced in judicial proceedings or otherwise shall be signed by the chairman of the board of directors or by two directors.

CHAPTER V.- FINANCIAL YEAR, DISTRIBUTION OF PROFITS

Article 19. Financial Year

The Company’s financial year begins on the first day of January and ends on the thirty-first day of December of each year.

The board of directors shall prepare annual accounts in accordance with the requirements of Luxembourg laws and accounting practices.

Article 20. Distribution of Profits

From the annual net profits of the Company, at least five per cent shall each year be allocated to the reserve required by law. That allocation will cease to be required as soon and as long as the legal reserve amounts to one tenth of the issued capital of the Company.

Upon recommendation of the board of directors the general meeting of shareholders shall determine the allocation of the remainder of the annual net profits. The general meeting may decide to allocate the whole or part of the remainder to a reserve or to a provision, to carry it forward to the next following financial year or to distribute it, to the shareholders as dividends.

 

6


The board of directors may pay out an advance payment on dividends to the shareholders in accordance with the conditions provided by law. The board of directors set the amount and the date of payment of any such advance payment.

The Company may repurchase its own shares in accordance with the conditions provided by law.

CHAPTER VI.- DISSOLUTION, LIQUIDATION

Article 21. Dissolution, Liquidation

The Company may be dissolved at any time by a resolution of the general meeting of shareholders adopted in compliance with the quorum and majority required for any amendment of the Articles of Association, unless otherwise provided for by law.

During the dissolution of the Company, one or more liquidators, appointed by the general meeting of the shareholders which will determine their powers and their emoluments, will proceed with the liquidation of the Company.

CHAPTER VII.- APPLICABLE LAW

Article 22. Applicable Law

All matters not governed by the Articles of Association shall be determined in accordance with law of 10 August 1915 on commercial companies, as amended.

Conformed copy of the consolidated articles of association.

Belvaux, 14 August 2007.

 

7

EXHIBIT 3.13

AMENDED AND RESTATED CERTIFICATE

OF

INCORPORATION OF ANHEUSER-BUSCH COMPANIES, INC.

FIRST. The name of the corporation is Anheuser-Busch Companies, Inc.

SECOND. The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.

THIRD. The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH. The total number of shares which the Corporation shall have authority to issue is 100 shares of Common Stock, and the par value of each of such shares is $0.01.

FIFTH. The Board of Directors of the Corporation shall have the power, without the assent or vote of the stockholders, to make By-Laws for the Corporation, and to amend, alter or repeal the same.

SIXTH. The Corporation reserves the right to amend, alter, change or repeal any provisions contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by the statutes of the State of Delaware and this Amended and Restated Certificate of Incorporation, and all rights herein conferred on officers, directors and stockholders are expressly to this reservation.

 

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SEVENTH. Elections of directors need not be by written ballot except and to the extent provided in the By-Laws of the Corporation.

EIGHTH. The number of directors of the Corporation shall be fixed by, or in the manner provided in, the By-Laws of the Corporation.

NINTH. Any action required by law to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

TENTH. The Corporation shall indemnify to the full extent authorized or permitted by law any person made, or threatened to be made, a party to any action or proceeding (whether civil or criminal or otherwise) by reason of the fact that he, his testator or intestate, is or was a director or officer of the Corporation or by reason of the fact that such director or officer, at the request of the Corporation, is or was serving any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in any capacity. Nothing contained herein shall affect any rights to indemnification to which employees other than directors and officers may be entitled by law. No amendment or repeal of this Article TENTH shall apply to or have any effect on any right to indemnification provided hereunder with respect to any acts or omissions occurring prior to such amendment or repeal.

 

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ELEVENTH. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of the law. The Corporation may create a trust fund, grant a security interest and/or use other means (including, without limitation, letters of credit, surety bonds and/or other similar arrangements), as well as enter into contracts providing for indemnification to the fullest extent permitted by law and including as part thereof any or all of the foregoing, to ensure the payment of such sums as may become necessary to effect full indemnification.

 

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EXHIBIT 3.14

BYLAWS

OF

ANHEUSER-BUSCH COMPANIES, INC.

(As Amended and Restated July 22, 2009)

INCORPORATED UNDER THE LAWS OF DELAWARE


TABLE OF CONTENTS

BYLAWS

OF

ANHEUSER-BUSCH COMPANIES, INC.

 

         Page
ARTICLE I: LOCATION AND OFFICES   
Section 1:1   Principal Office    1
Section 1:2   Other Offices    1
ARTICLE II: STOCKHOLDERS   
Section 2:1   Annual Meeting    1
Section 2:2   Business to be Conducted at Annual Meeting    1
Section 2:3   Special Meetings    2
Section 2:4   Place of Meetings    2
Section 2:5   Notice of Meetings    3
Section 2:6   Quorum and Voting    3
Section 2:7   Voting; Proxy    3
Section 2:8   Voting by Fiduciaries, Pledgee and Pledgors    4
Section 2:9   Nomination of Directors    4
Section 2:10   List of Stockholders    5
Section 2:11   Appointment of Inspectors of Election and Resolution of Questions Concerning Right to Vote    5
ARTICLE III: DIRECTORS   
Section 3:1   General Powers    6
Section 3:2   Number and Qualifications    6
Section 3:3   Election    6
Section 3:4   Place of Meetings    6
Section 3:5   Regular Meetings    6
Section 3:6   Special Meetings    7
Section 3:7   Quorum    7
Section 3:8   Waiver of Notice    7
Section 3:9   Consent    7
Section 3:10   Notice to Members of the Board of Directors    8
Section 3:11   Chairman of the Board    8
ARTICLE IV: COMMITTEES   
Section 4:1   Executive Committee - Appointment and Tenure    8
Section 4:2   Executive Committee - Powers    8
Section 4:3   Executive Committee - Notice of Meetings    9
Section 4:4   Executive Committee - Quorum and Powers of Majority    9
Section 4:5   Executive Committee - Reporting    9
Section 4:6   Other Committees    9
ARTICLE V: OFFICERS   
Section 5:1   Appointment    10
Section 5:2   Tenure    10
Section 5:3   Chief Executive Officer    10
Section 5:4   President    10
Section 5:5   Other Officers    10

 

ii


ARTICLE VI: CAPITAL STOCK AND DIVIDENDS   
Section 6:1   Certificates for Shares    10
Section 6:2   Stock Records    11
Section 6:3   Transfers    11
Section 6:4   Regulations Governing Issuance and Transfers of Shares    11
Section 6:5   Transfer Agents and Registrars    11
Section 6:6   Lost or Destroyed Certificates    11
Section 6:7   Fractions of Shares    11
Section 6:8   Determination of Stockholders    12
Section 6:9   Record Date    12
ARTICLE VII: MISCELLANEOUS   
Section 7:1   Voting Shares in Other Corporations    13
Section 7:2   Execution of Other Papers and Documents    13
Section 7:3   Corporate Seal    13
Section 7:4   Amendments    13
Section 7:5   Books and Records    13
Section 7:6   Electronic Transmission    13

 

iii


BYLAWS

OF

ANHEUSER-BUSCH COMPANIES, INC.

(AS AMENDED AND RESTATED JULY 22, 2009)

ARTICLE I: LOCATION AND OFFICES

Principal Office.

SECTION 1:1. The principal office of the corporation shall be at such place as the Board of Directors may from time to time determine, but until a change is effected such principal office shall be at One Busch Place, in the City of St. Louis, Missouri.

Other Offices.

SECTION 1:2. The corporation may also have other offices, in such places (within or without the State of Delaware) as the Board of Directors may from time to time determine.

ARTICLE II: STOCKHOLDERS

Annual Meeting.

SECTION 2:1. An annual meeting of the stockholders of the corporation shall be held at 10:00 o’clock a.m. on the fourth Wednesday in April of each year if not a legal holiday, and if a legal holiday then on the next succeeding day not a legal holiday. The purpose of the meeting shall be to elect directors and to transact such other business as properly may be brought before the meeting. If the corporation shall fail to hold said meeting for the election of directors on the date aforesaid, the Board of Directors shall cause the election to be held by the stockholders as soon thereafter as convenient.

Business to be Conducted at Annual Meeting.

SECTION 2:2.1 At an annual meeting of stockholders, only such business shall be conducted as shall have been brought before the meeting (i) pursuant to the corporation’s notice of the meeting, (ii) by or at the direction of the Board of Directors (or any duly organized committee thereof), or (iii) by any stockholder of the corporation who is a stockholder of record on the date of giving of the notice provided for in this Bylaw and on the record date for the determination of stockholders entitled to vote at such meeting and who has complied with the notice procedures set forth in this Bylaw.

SECTION 2:2.2 In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice in proper written form to the Secretary which notice is not withdrawn by such stockholder at or prior to such annual meeting.

SECTION 2:2.3 To be timely, a stockholder’s notice to the Secretary must be delivered or mailed to and received by the Secretary at the principal executive offices of the corporation, not less than ninety days nor more than one hundred twenty days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the meeting is changed by more than thirty days from such anniversary date, notice by the stockholder must be received not later than the close of business on the tenth day following the earlier of the day on which notice of the date of the annual meeting was mailed or public disclosure was made.

SECTION 2:2.4 To be in proper written form, such stockholder’s notice must set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business to be brought before the annual meeting and the reasons for conducting such business at such meeting; (ii) the name and address, as they appear on the corporation’s books, of the stockholder proposing such business, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the class and the number of shares of the corporation’s stock which are beneficially owned by

 

1


the stockholder, and the beneficial owner, if any, on whose behalf the proposal is made; (iv) any material interest of the stockholder, and of the beneficial owner, if any, on whose behalf the proposal is made, in such business; and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

SECTION 2:2.5 Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Bylaw. The chairman of the meeting may, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with the provisions of this Bylaw; and if the chairman should so determine, the chairman shall so declare to the meeting, and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder with respect to the matters set forth in this Bylaw.

Special Meetings.

SECTION 2:3.1 At any time the Chief Executive Officer may, and either the Chief Executive Officer or the Secretary at the written request of any five members of the Board of Directors shall, issue a call for a special meeting of the stockholders. Such call shall state the purpose or purposes of the meeting.

SECTION 2:3.2 A special meeting of stockholders shall be called by the Board of Directors upon written request (“Request”) to the Secretary of record holders of at least 25% of the outstanding common stock of the corporation.

(a) The Request for a special meeting of stockholders shall be signed by each stockholder of record, or duly authorized agent, requesting the special meeting and must set forth: (i) a statement of the specific purpose of the meeting and the matters proposed to be acted on at the meeting and any material interest in such business of the stockholders requesting the meeting (or of the beneficial owners, if any, on whose behalf the Request is made); (ii) the name and address of each such stockholder as they appear on the corporation’s stock ledger; and (iii) the number of shares of the corporation’s common stock owned of record and beneficially by each such stockholder (or beneficial owners, if any, on whose behalf the Request is made). A stockholder executing the Request may revoke its request at any time by written revocation delivered to the Secretary, any such revocation shall be effective when received and such stockholder shall be deemed not to have joined in the Request.

(b) A special meeting so requested by stockholders shall be held at the date, time and place as may be fixed by the Board of Directors, but not later than 90 days after receipt of the Request.

(c) Notwithstanding the foregoing, the Board of Directors need not call a special meeting of stockholders, if (i) the Board of Directors has already called or calls an annual meeting of stockholders and the purpose of the annual meeting includes the purpose specified in the Request or (ii) the purpose specified in the Request is not the election of directors and the corporation held an annual or special meeting of stockholders during the 12 months preceding receipt of the Request, the purposes of which meeting included the purpose specified in the Request.

SECTION 2:3.3 Only such business may be considered at a special meeting of stockholders as has been stated in the corporation’s notice for such meeting.

Place of Meetings.

SECTION 2:4. All meetings of the stockholders shall be held at the principal office of the corporation, or at such other place, within or without the State of Delaware, as may be determined by the Board of Directors and stated in the notice of the meeting.

 

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Notice of Meetings.

SECTION 2:5. Written notice of each meeting of the stockholders stating the place, date, and hour of the meeting, and, in case of a special meeting or where otherwise required by statute, the purpose or purposes for which the meeting is called, shall be delivered by mail not less than ten nor more than sixty days before the date of the meeting, by or at the direction of the person calling the meeting, to each stockholder entitled to vote at such meeting. The notice of a stockholders’ meeting shall be deemed to be delivered when deposited in the United States mail with postage prepaid, addressed to each stockholder at such stockholder’s address as it appears on the records of the corporation.

Quorum and Voting.

SECTION 2:6.1 The holders of a majority of the outstanding shares (exclusive of treasury stock) entitled to vote at any meeting of the stockholders, when present in person or by proxy, shall constitute a quorum for the transaction of business, except as otherwise provided by statute, the Certificate of Incorporation, or these Bylaws; but in the absence of such a quorum the holders of a majority of the shares represented at the meeting shall have the right successively to adjourn the meeting to a specified date. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

SECTION 2:6.2 The absence from any meeting of the number of shares required by statute, the Certificate of Incorporation or these Bylaws for action upon one matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if the number of shares required in respect of such other matters shall be present.

SECTION 2:6.3 When a quorum is present at any meeting of the stockholders, the vote of the holders (present in person or represented by proxy) of a majority of the shares of stock which are actually voted (and have the power to vote) on any proposition or question properly brought to a vote at such meeting shall decide any such proposition or question, unless the proposition or question is one upon which by express provision of statute or of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and establish the number of votes required to determine such proposition or question.

Voting; Proxy.

SECTION 2:7.1 Whenever the law requires or the chairman orders that a vote be taken by ballot, each stockholder entitled to vote on a particular question at a meeting of stockholders, pursuant to law or the Certificate of Incorporation, shall be entitled to one vote for each share of voting stock held by such stockholder. The date for determining the stockholders entitled to vote at a meeting of the stockholders shall be determined pursuant to Section 6:9.

SECTION 2:7.2 Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent in writing without a meeting may authorize another person or persons to act for such stockholder by proxy; but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.

 

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Voting by Fiduciaries, Pledgee and Pledgors.

SECTION 2:8. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the corporation the pledgor has expressly empowered the pledgee to vote thereon, in which case only the pledgee or the pledgee’s proxy may represent such stock and vote thereon.

If shares or other securities having voting power stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect:

(a) If only one votes, that person’s act binds all;

(b) If more than one vote, the act of the majority so voting binds all;

(c) If more than one vote, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or any person voting the shares, or a beneficiary, if any, may apply to the Court of Chancery or such other court as may have jurisdiction to appoint an additional person to act with the persons so voting the shares, which shall then be voted as determined by a majority of such persons and the person appointed by the Court. If the instrument so filed shows that any such tenancy is held in unequal interest, a majority or even-split for the purpose of this subsection shall be a majority or even-split in interest.

Nomination of Directors.

SECTION 2:9.1 Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the corporation, except as may be otherwise provided in the Certificate of Incorporation of the corporation with respect to the right of holders of preferred stock of the corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors, (i) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (ii) by any stockholder of the corporation who is a stockholder of record on the date of the giving of the notice provided for in this Bylaw and on the record date for the determination of stockholders entitled to vote at such meeting and who complies with the notice procedures set forth in this Bylaw.

SECTION 2:9.2 In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the corporation.

SECTION 2:9.3 To be timely, a stockholder’s notice to the Secretary must be delivered or mailed to and received by the Secretary at the principal executive offices of the corporation (i) in the case of an annual meeting, not less than ninety days nor more than one hundred twenty days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within thirty days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever occurs first, and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever occurs first.

 

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SECTION 2:9.4 To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and the number of shares of capital stock of the corporation which are owned beneficially or of record by the person and (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (ii) as to the stockholder giving the notice or the beneficial owner on whose behalf the nomination is made, (A) the name and address of such stockholder as they appear on the corporation’s books, (B) the class or series and the number of shares of capital stock of the corporation beneficially owned by such stockholder or beneficial owner, (C) a description of all arrangements or understandings between such stockholder or beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder or beneficial owner, (D) a representation that such stockholder or beneficial owner intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (E) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

SECTION 2:9.5 No person shall be eligible for election as a director of the corporation, at any annual meeting of stockholders or at any special meeting of stockholders called for the purpose of electing directors, unless nominated in accordance with the procedures set forth in this Bylaw. If the chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

List of Stockholders.

SECTION 2:10. The Secretary shall prepare and make, or cause to be made, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. In addition, the list shall be produced and kept at the time and place of the meeting during the whole time thereof and subject to the inspection of any stockholder who may be present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this Bylaw or the books of the corporation, or to vote in person or by proxy at any meeting of the stockholders.

Appointment of Inspectors of Election and Resolution of Questions Concerning Right to Vote.

SECTION 2:11. The Board of Directors, in advance of the meeting of stockholders or, if it does not act, the chairman of the meeting, shall appoint not less than two persons who are not directors to serve as inspectors of election. It shall be their duty to receive and canvass the votes for election of directors and on any proposal voted on by ballot and to certify the results to the chairman. In all cases where the right to vote upon any share of the corporation shall be questioned, it shall be the duty of the inspectors to examine the stock ledger of the corporation as evidence of the shares held, and all shares that appear standing thereon in the name of any person or persons may be voted upon by such person or persons. Each inspector of election before entering upon the duties of such office shall take and subscribe the following oath before an officer authorized by law to administer oaths: “I do solemnly swear that I will execute the duties of an inspector of the election now to be held with strict impartiality and according to the best of my ability.”

 

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ARTICLE III: DIRECTORS

General Powers.

SECTION 3:1. The Board of Directors shall control and manage the business and property of the corporation. The Board may exercise all such powers of the corporation and do all lawful acts and things as are not by law, the Certificate of Incorporation, or these Bylaws directed or required to be exercised or done by the stockholders or some particular officer of the corporation.

Number and Qualifications.

SECTION 3:2. The number of directors shall be determined from time to time by resolution of the Board of Directors in accordance with the terms of Article FIFTH of the Certificate of Incorporation. From and after the first public distribution of the Common Stock of the corporation, each director shall be a stockholder of the corporation, except in such specific case or cases as shall be otherwise authorized by the Board of Directors upon a showing of reasonable cause therefor.

Election.

SECTION 3:3. The directors who are to be elected at the annual meeting of the stockholders shall be elected by ballot by the holders of shares entitled to vote.

Place of Meetings.

SECTION 3:4. The place where meetings of the Board of Directors are held shall be as follows:

(a) The annual meeting shall be held in the city of the principal office of the corporation in Missouri, provided that in the event the annual meeting of shareholders is held in a metropolitan area other than St. Louis, Missouri, the annual meeting of the Board of Directors shall be held in the metropolitan area where the annual meeting of stockholders is held.

(b) Regular meetings shall be held at such place within the City or County of St. Louis, Missouri as may be prescribed in the call, provided that any regular meeting may be held elsewhere, either within or without the State of Delaware, pursuant to resolution of the Board of Directors or pursuant to the call of the Chief Executive Officer acting with the consent of a majority of the directors.

(c) Special meetings shall be held at such place as may be prescribed in the notice, provided that if a special meeting is held on less than three days’ notice, it shall be held at the principal office of the corporation unless all directors agree upon a different location.

(d) Members of the Board of Directors may participate in a meeting of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participating in the meeting in this manner shall constitute presence in person at such meeting.

Regular Meetings.

SECTION 3:5. Regular meetings shall be held at such place or places, on such date or dates, and at such times as shall be established by the Board of Directors. A notice of each regular meeting shall not be required, except any meeting at which an amendment to or repeal of these Bylaws is to be considered.

 

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Special Meetings.

SECTION 3:6. Special meetings of the Board of Directors may be held at the call of the Chief Executive Officer or five members of the Board at such time as may be prescribed in the call of the meeting. The purpose of the special meeting need not be stated in the notice of the meeting. Notice of a special meeting may be given by any one or more of the following methods and the method used need not be the same for each director being notified:

(a) Written notice sent by mail at least three days prior to the meeting;

(b) Personal service at least twenty-four (24) hours prior to the date of the meeting;

(c) Telegraphic notice at least twenty-four (24) hours prior to the date of the meeting, said notice to be sent as a straight full-rate telegram;

(d) Telephonic notice at least twenty-four (24) hours prior to the date of the meeting.

(e) Facsimile transmission at least twenty-four (24) hours prior to the date of the meeting.

(f) E-mail notice at least twenty-four (24) hours prior to the date of the meeting.

Quorum.

SECTION 3:7. A majority of the persons serving as directors of the corporation at the time of a meeting of the Board of Directors shall constitute a quorum for the transaction of any business by the Board at such meeting. At any meeting of the Board, no action shall be taken (except adjournment, in the manner provided below) until after a quorum has been established.

The act of a majority of directors who are present at a meeting at which a quorum previously has been established (or at any adjournment of such meeting, provided that a quorum previously shall have been established at such adjourned meeting) shall be the act of the Board of Directors, regardless of whether or not a quorum is present at the time such action is taken. In determining the number of directors who are present at the time any such action is taken (for the purpose of establishing the number of votes required to take action on any proposition or question submitted to the Board), any director who is in attendance at such meeting but who, for just cause, is disqualified to vote on such proposition or question, shall not be considered as being present at the time of such action.

In the event a quorum cannot be established at the beginning of a meeting, a majority of the directors present at the meeting, or the director, if there be only one person, or the Secretary of the corporation, if there be no director present, may adjourn the meeting from time to time until a quorum be present. Only such notice of such adjournment need be given as the Board may from time to time prescribe.

Waiver of Notice.

SECTION 3:8. Any notice which is required by law or by the Certificate of Incorporation or by these Bylaws to be given to any director may be waived in writing, signed by such director, or by electronic transmission by such director, whether before or after the time stated therein. Attendance of a director at any meeting shall constitute waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Consent.

SECTION 3:9. Any action required or permitted to be taken at any meeting of the Board of Directors (or of any committee thereof) may be taken without a meeting if all members of the Board (or committee)

 

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consent thereto in writing, or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of the Board (or committee).

Notice to Members of the Board of Directors.

SECTION 3:10. Each member of the Board of Directors shall file with the Secretary of the corporation an address to which mail or telegraphic notices shall be sent, a telephone number to which a telephonic or facsimile notice may be transmitted, and an e-mail address to which an e-mail notice may be transmitted. A notice mailed, telegraphed, telephoned or transmitted by facsimile or e-mail in accordance with the instructions provided by the director shall be deemed sufficient notice. Such address, telephone number or e-mail address may be changed at any time and from time to time by a director by giving written notice of such change to the Secretary. Failure on the part of any director to keep an address, telephone number and e-mail address on file with the Secretary shall automatically constitute a waiver of notice of any regular or special meeting of the Board which might be held during the period of time that such address, telephone number and e-mail address are not on file with the Secretary. A notice shall be deemed to be mailed when deposited in the United States mail, postage prepaid. A notice shall be deemed to be telegraphed when the notice is delivered to the transmitter of the telegram and either payment or provision for payment is made by the corporation. Notice shall be deemed to be given by telephone if the notice is transmitted over the telephone to some person (whether or not such person is the director) answering the telephone at the number which the director has placed on file with the Secretary. Notice shall be deemed to be given by facsimile transmission when sent to the telephone number which the director has placed on file with the Secretary. Notice shall be deemed to be given by e-mail transmission when sent to the e-mail address which the director has placed on file with the Secretary.

Chairman of the Board.

SECTION 3:11. The Board of Directors shall elect one of its members to be Chairman of the Board. The Chairman of the Board shall preside at all meetings of the Board of Directors at which the Chairman is present. In the Chairman’s absence, the Vice Chairman (if any) shall preside. In the absence of the Chairman and the Vice Chairman, the Board shall select a chairman of the meeting from among the directors present. The Chairman of the Board shall have such other powers, responsibilities, and duties as may be assigned by the Board of Directors.

ARTICLE IV: COMMITTEES

Executive Committee—Appointment and Tenure.

SECTION 4:1. The Board of Directors, by resolution adopted by a majority of the whole Board, may designate three or more directors, including the Chief Executive Officer, to constitute an Executive Committee, provided that a majority of said committee shall at all times be made up of members of the Board who are neither officers nor employees of the corporation and who shall serve at the pleasure of the Board. In the case of the death, resignation or removal of any member of the Executive Committee or in case any such member shall cease to be a member of the Board, the vacancy shall be filled by the Board. The Board shall designate the chairman of the Executive Committee.

Executive Committee—Powers.

SECTION 4:2. The Executive Committee, to the extent provided in the resolution of the Board of Directors appointing such committee or in any subsequent resolution, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it, but shall not have the power or authority with respect to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the Bylaws of the corporation; nor shall

 

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the Executive Committee have the power or authority to declare a dividend or to authorize the issuance of stock; but the designation of such Executive Committee and the delegation of authority thereto shall not operate to relieve the Board, or any member thereof, of any responsibility imposed upon it or them by the provisions of the Delaware General Corporation Law, as amended.

Executive Committee—Notice of Meetings.

SECTION 4:3. A meeting of the Executive Committee may be held on call by the Chief Executive Officer or on the call of any three of the other members of the Committee. Meetings of the Executive Committee may be held, upon notice as short as twenty-four (24) hours, at such place or places as shall be determined by resolution of the Committee, or in the absence of a resolution of the Executive Committee with respect thereto, at such place or places as may be determined by the Chief Executive Officer. If notice is given at least three days prior to the meeting of the Committee, notice may be given in any of the ways set forth in Section 3:6, dealing with special meetings of the Board of Directors. If less than three days’ notice is given, notice shall not be given by mail but shall be given by one of the other methods described in Section 3:6. With respect to any such notice, all the provisions of Section 3:10 shall be equally applicable in the case of notice of an Executive Committee meeting as they are in the case of a notice of a meeting of the Board of Directors. Meetings of the Executive Committee shall be held at such place either within or without the States of Missouri or Delaware as may be designated by a resolution of the Board; or in the absence of such resolution, at such place within the metropolitan St. Louis, Missouri area as may be designated in the notice. Any such notice may be waived in the same manner provided in Section 3:8 with respect to waiver of notice of a directors’ meeting.

Executive Committee—Quorum and Powers of Majority.

SECTION 4:4. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business at any meeting of the Executive Committee. Unless otherwise provided by the Board of Directors, a majority of the members of the Executive Committee shall constitute a quorum, and the acts of a majority of the members present at a meeting at which a quorum is present shall be the acts of the Executive Committee.

Executive Committee—Reporting.

SECTION 4:5. At each regular meeting of the Board of Directors all actions taken by the Executive Committee since the last prior meeting of the Board shall be reported, and the Board shall take such action to approve or rescind such action of the Executive Committee as the Board may deem appropriate, but no rescission of such action shall affect any rights which have attached pursuant to such Executive Committee action.

If no regular meeting of the Board is scheduled within seven days after the date of a meeting of the Executive Committee, then no later than five days after such meeting of the Executive Committee, the minutes thereof (even though they may not as yet have been approved by the Executive Committee) shall be deposited in the mail by the Secretary addressed to each member of the Board at the address on file with the Secretary pursuant to the provisions of Section 3:10, provided that if any member of the Board shall have failed to place an address on file with the Secretary, such member shall be deemed to have waived the right to receive a copy of the minutes of the Executive Committee meeting.

Other Committees.

SECTION 4.6. Other Committees may be established, and their members appointed, from time to time by the Board of Directors. Such other committees shall have such purpose(s) and such power(s) as the Board by resolution may confer. Unless otherwise provided by the Board, a majority of the members of such other Committee shall constitute a quorum, and the acts of a majority of the members present at a meeting at which a quorum is present shall be the act of such other Committee.

 

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ARTICLE V: OFFICERS

Appointment.

SECTION 5:1. The Board of Directors shall appoint a Chief Executive Officer, a President, one or more Vice Presidents, a Controller, a Secretary, a Treasurer, and such other officers as the Board may from time to time deem necessary or appropriate. Any number of offices may be held by the same person. The Board of Directors may appoint a Vice Chairman of the Board, but the person holding that position shall not be considered an officer of the corporation.

Tenure.

SECTION 5:2. Officers appointed by the Board of Directors shall hold their respective offices for the term of one year and until their respective successors shall have been duly appointed and qualified; provided, however, that any officer appointed by the Board may be removed by the Board with or without a hearing and with or without cause whenever in its judgment the best interests of the corporation will be served thereby.

Chief Executive Officer.

SECTION 5:3. The Chief Executive Officer shall have general supervision and control over all the business and property of the corporation and shall be responsible at all times to the Board of Directors and the Executive Committee. The Chief Executive Officer shall also preside at all meetings of the stockholders. In the event the Chief Executive Officer shall fail or for any reason be unable to serve as such, the Board of Directors shall promptly act to fill such vacancy.

President.

SECTION 5:4. The President shall have such powers, responsibilities and duties as shall be assigned by the Board of Directors or the Chief Executive Officer.

Other Officers.

SECTION 5:5. Subject to the ultimate authority of the Board of Directors, all other officers of the corporation shall have such powers, responsibilities and duties as shall be assigned to them from time to time by the Chief Executive Officer.

ARTICLE VI: CAPITAL STOCK AND DIVIDENDS

Certificates for Shares

SECTION 6:1. The shares of the corporation may be represented by certificates or may be issued in uncertificated form. The issuance of shares in uncertificated form shall not affect shares already represented by a certificate until such certificate is surrendered to the corporation. Every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the Chairman or Vice Chairman of the Board of Directors or by the President or a Vice-President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, representing the number of shares in certificate form. The signatures of any such officers thereon may be facsimiles. The seal of the corporation shall be impressed, by original or by facsimile, printed or engraved, on all such certificates. The certificate shall also be signed by the transfer agent and a registrar and the signature of either the transfer agent or the registrar may also be facsimile, engraved or printed. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the corporation with the same effect as if such officer, transfer agent, or registrar had not ceased to be such officer, transfer agent, or registrar at the date of its issue.

 

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Stock Records.

SECTION 6:2. The corporation or a transfer agent shall keep stock books in which shall be recorded the number of shares issued, the names of the owners of the shares, the number owned by them respectively, and the transfer of such shares with the date of transfer.

Transfers.

SECTION 6:3. Transfers of stock shall be made only on the stock transfer records of the corporation and, in the case of shares represented by a certificate or certificates only upon surrender of the certificate or certificates being transferred which certificate shall be properly endorsed for transfer or accompanied by a duly executed stock power. Whenever a certificate is endorsed by or accompanied by a stock power executed by someone other than the person or persons named in the certificate, evidence of authority to transfer shall also be submitted with the certificate. All certificates surrendered to the corporation for transfer shall be cancelled.

Regulations Governing Issuance and Transfers of Shares.

SECTION 6:4. The Board of Directors shall have the power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer and registration of shares of stock of the corporation.

Transfer Agents and Registrars.

SECTION 6:5. Transfer agents and registrars for the corporation’s stock shall be banks, trust companies or other financial institutions located within or without the State of Delaware as shall be appointed by the Board of Directors. The Board shall also define the authority of such transfer agents and registrars.

Lost or Destroyed Certificates.

SECTION 6:6. Where a certificate for shares of the corporation has been lost or destroyed, the Board of Directors may authorize the issuance of a new certificate or uncertificated shares in lieu thereof upon satisfactory proof of such loss or destruction, and upon the giving of an open penalty bond with surety satisfactory to the corporation’s General Counsel and Treasurer, to protect the corporation or any person injured by the issuance of the new certificate or uncertificated shares in lieu thereof from any liability or expense which it or they may incur by reason of the original certificate’s remaining outstanding, and upon payment of the corporation’s reasonable costs incident thereto.

Fractions of Shares.

SECTION 6:7. The corporation shall not issue fractions of a share. It shall, however, (1) arrange for the disposition of fractional interests by those entitled thereto, or (2) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined, or (3) issue scrip or warrants in registered or bearer form which shall entitle the holder to receive a full certificated or uncertificated share upon the surrender of such scrip or warrants aggregating a full share. Scrip or warrants shall not, unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, or to participate in any of the assets of the corporation in the event of liquidation. The Board of Directors may cause scrip or warrants to be issued subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board may impose.

 

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Determination of Stockholders.

SECTION 6:8. The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Delaware or these Bylaws.

Record Date.

SECTION 6:9.1 In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

SECTION 6:9.2 In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the attention of the Secretary of the Corporation, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.

SECTION 6:9.3 In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

12


ARTICLE VII: MISCELLANEOUS

Voting Shares in Other Corporations.

SECTION 7:1. The corporation may vote any and all shares of stock and other securities having voting rights which may at any time and from time to time be held by it in any other corporation or corporations and such vote may be cast either in person or by proxy by such officer of the corporation as the Board of Directors may appoint or, in default of such appointment, the Chief Executive Officer, the President or a Vice President.

Execution of Other Papers and Documents.

SECTION 7:2. All checks, bills, notes, drafts, vouchers, warehouse receipts, bonds, mortgages, deeds, contracts, registration certificates and all other papers and documents of the corporation shall be signed or endorsed for the corporation by such of its officers and other employees and agents (which agents need not be employees of the corporation) as the Board of Directors may from time to time determine, or in the absence of such determination, by the President or a Vice President of the corporation.

Corporate Seal.

SECTION 7:3. The Board of Directors shall provide a suitable seal, containing the name of the corporation, which seal shall be in the custody of the Secretary of the corporation, and may provide for one or more duplicates thereof to be kept in the custody of such other officer of the corporation as the Board may prescribe.

Amendments.

SECTION 7:4. These Bylaws may be amended or repealed, or new Bylaws may be adopted (a) by the affirmative vote of a majority of the shares issued and outstanding and entitled to vote at any annual or special meeting of stockholders, or (b) by the affirmative vote of the majority of the Board of Directors at any regular or special meeting; provided that the notice of such meeting of stockholders or directors, whether regular or special, shall specify as one of the purposes thereof the making of such amendment or repeal, and provided further that any amendment of the Bylaws made by the Board may be further amended or repealed by the stockholders.

Books and Records.

SECTION 7:5. Except as the Board of Directors may from time to time direct or as may be required by law, the corporation shall keep its books and records at its principal office.

Electronic Transmission.

SECTION 7:6. For purposes of these Bylaws, “electronic transmission” shall have the meaning as set forth in Section 232 of the Delaware General Corporation Law, as amended.

 

13

EXHIBIT 4.1

 

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.,

as Company

and

ANHEUSER-BUSCH INBEV NV/SA,

as Parent Guarantor

and

the SUBSIDIARY GUARANTORS party hereto from time to time

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee

 

 

Indenture

Dated as of October 16, 2009

 

 

 

 


Certain Sections of this Indenture relating to Sections 310 through 318, inclusive, of the Trust Indenture Act of 1939:

 

Trust Indenture Act Section

  

Indenture Section

Section 310   (a)(1)    609
  (a)(2)    609
  (a)(3)    Not Applicable
  (a)(4)    Not Applicable
  (b)    608
     610
Section 311   (a)    613
  (b)    613
Section 312   (a)    701
     702
  (b)    702
  (c)    702
Section 313   (a)    703
  (b)    703
  (c)    703
  (d)    703
Section 314   (a)    704
  (a)(4)    101
     1004
  (b)    Not Applicable
  (c)(1)    102
  (c)(2)    102
  (c)(3)    Not Applicable
  (d)    Not Applicable
  (e)    102
Section 315   (a)    601
  (b)    602
  (c)    601
  (d)    601
  (e)    514
Section 316   (a)    101
  (a)(1)(A)    502
     512
  (a)(1)(B)    513
  (a)(2)    Not Applicable
  (b)    508
  (c)    104
Section 317   (a)(1)    503
  (a)(2)    504
  (b)    1003
Section 318   (a)    107

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.


TABLE OF CONTENTS

 

 

 

     P AGE
P ARTIES    1
R ECITALS OF THE C OMPANY AND THE P ARENT G UARANTOR    1
ARTICLE ONE

D EFINITIONS AND O THER P ROVISIONS

OF G ENERAL A PPLICATION

SECTION 101.    Definitions    1
   AB InBev France Subsidiary    2
   Act    2
   Affiliate    2
   AmBrew Guaranteed Facilities    2
   AmBrew Subsidiaries    2
   Anheuser-Busch InBev Group    3
   Applicable Procedures    3
   Authenticating Agent    3
   Board of Directors    3
   Board Resolution    3
   BrandBrew Guaranteed Facilities    3
   BrandBrew Subsidiaries    3
   Business Day    3
   Certificated Security    3
   Clearstream    4
   Commission    4
   Company    4
   Company Request; Company Order    4
   Corporate Trust Office    4
   Corporation    4
   Covenant Defeasance    4
   Defaulted Interest    4
   Defeasance    4
   Depositary    4
   Distribution Compliance Period    4
   Distributor    4
   DTC    4
   Encumbrance    4
   Euroclear    5
   Event of Default    5
   Exchange Act    5
   Existing Target Debt    5
   Expiration Date    5

 

N OTE : This Table of Contents shall not, for any purpose, be deemed to be a part of the Indenture.

 

-i-


   Global Security    6
   Guarantees    6
   Guarantor    6
   Holder    6
   Indenture    6
   Indirect Participant    6
   Interest    6
   Interest Payment Date    6
   Investment Company Act    6
   Judgment Currency    6
   Law of 2002    6
   Luxembourg Guarantor    6
   Maturity    6
   Net Tangible Assets    7
   Notice of Default    7
   Officers’ Certificate    7
   Opinion of Counsel    7
   Original Issue Discount Security    7
   Outstanding    7
   Parent Guarantor    8
   Participant    8
   Paying Agent    8
   Person    8
   Place of Payment    8
   Predecessor Security    9
   Principal Plant    9
   Programme    9
   Redemption Date    9
   Redemption Price    9
   Regular Record Date    9
   Restricted Certificated Security    9
   Restricted Global Security    9
   Restricted Subsidiary    9
   Securities    10
   Securities Act    10
   Security Register; Security Registrar    10
   Senior Facility Agreement    10
   Significant Subsidiary    10
   Special Record Date    10
   Stated Maturity    10
   Subsidiary    10
   Subsidiary Guarantor    10
   Trust Indenture Act    11
   Trustee    11
   U.S. Government Obligation    11
   Unrestricted Certificated Security    11
   Unrestricted Global Security    12
   Vice President    12
SECTION 102.    Compliance Certificates and Opinions    12
SECTION 103.    Form of Documents Delivered to Trustee    12
SECTION 104.    Acts of Holders; Record Dates    13

 

-ii-


SECTION 105.    Notices, Etc., to Trustee, the Company and a Guarantor    15
SECTION 106.    Notice to Holders; Waiver    15
SECTION 107.    Conflict with Trust Indenture Act    16
SECTION 108.    Effect of Headings and Table of Contents    16
SECTION 109.    Successors and Assigns    16
SECTION 110.    Separability Clause    16
SECTION 111.    Benefits of Indenture    16
SECTION 112.    Governing Law; Waiver of Trial by Jury    16
SECTION 113.    Legal Holidays    17
SECTION 114.    Submission to Jurisdiction; Waiver of Immunity    17
SECTION 115.    Appointment of Agent for Service of Process    17
SECTION 116.    Waiver of Claims    18
ARTICLE TWO
S ECURITY AND G UARANTEE F ORMS
SECTION 201.    Forms Generally    18
SECTION 202.    Form of Face of Security    19
SECTION 203.    Form of Reverse of Security    20
SECTION 204.    Form of Legends for Securities    26
SECTION 205.    Form of Trustee’s Certificate of Authentication    27
SECTION 206.    Guarantee by Guarantors    28
SECTION 207.    Additional Guarantees    30
SECTION 208.    Release of Guarantee    30
SECTION 209.    Limitations on Guarantees    31
SECTION 210.    CUSIP Numbers    33
ARTICLE THREE
T HE S ECURITIES
SECTION 301.    Amount Unlimited; Issuable in Series    33
SECTION 302.    Denominations    36
SECTION 303.    Execution, Authentication, Delivery and Dating    36
SECTION 304.    Temporary Securities    38
SECTION 305.    Registration, Registration of Transfer and Exchange    38
SECTION 306.    Mutilated, Destroyed, Lost and Stolen Securities    48
SECTION 307.    Payment of Interest; Interest Rights Preserved    48
SECTION 308.    Persons Deemed Owners    49
SECTION 309.    Cancellation    50
SECTION 310.    Computation of Interest    50
ARTICLE FOUR
S ATISFACTION AND D ISCHARGE
SECTION 401.    Satisfaction and Discharge of Indenture    50
SECTION 402.    Application of Trust Money    51

 

-iii-


ARTICLE FIVE
R EMEDIES
SECTION 501.    Events of Default    52
SECTION 502.    Acceleration of Maturity; Rescission and Annulment    54
SECTION 503.    Collection of Indebtedness and Suits for Enforcement by Trustee    55
SECTION 504.    Trustee May File Proofs of Claim    56
SECTION 505.    Trustee May Enforce Claims Without Possession of Securities    56
SECTION 506.    Application of Money Collected    56
SECTION 507.    Limitation on Suits    57
SECTION 508.    Unconditional Right of Holders to Receive Principal, Premium and Interest    57
SECTION 509.    Restoration of Rights and Remedies    58
SECTION 510.    Rights and Remedies Cumulative    58
SECTION 511.    Delay or Omission Not Waiver    58
SECTION 512.    Control by Holders    58
SECTION 513.    Waiver of Past Defaults    58
SECTION 514.    Undertaking for Costs    59
SECTION 515.    Waiver of Usury, Stay or Extension Laws    59
SECTION 516.    Agents to Act for Trustee    59
ARTICLE SIX
T HE T RUSTEE
SECTION 601.    Certain Duties and Responsibilities    60
SECTION 602.    Notice to Holders of Defaults    60
SECTION 603.    Certain Rights of Trustee    60
SECTION 604.    Not Responsible for Recitals or Issuance of Securities    63
SECTION 605.    May Hold Securities    63
SECTION 606.    Money Held in Trust    63
SECTION 607.    Compensation and Reimbursement    63
SECTION 608.    Conflicting Interests    64
SECTION 609.    Corporate Trustee Required; Eligibility    64
SECTION 610.    Resignation and Removal; Appointment of Successor    65
SECTION 611.    Acceptance of Appointment by Successor    66
SECTION 612.    Merger, Conversion, Consolidation or Succession to Business    67
SECTION 613.    Preferential Collection of Claims Against Company or the Guarantors    67
SECTION 614.    Appointment of Authenticating Agent    67
ARTICLE SEVEN
H OLDERS ’ L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY
SECTION 701.    Company and the Parent Guarantor to Furnish Trustee Names and Addresses of Holders    69
SECTION 702.    Preservation of Information; Communications to Holders    69
SECTION 703.    Reports by Trustee    70
SECTION 704.    Reports by the Parent Guarantor    70

 

-iv-


ARTICLE EIGHT
C ONSOLIDATION , M ERGER , C ONVEYANCE , T RANSFER OR L EASE
SECTION 801.    Company and a Guarantor May Consolidate, Etc., Only on Certain Terms    71
SECTION 802.    Successor Substituted    72
ARTICLE NINE
S UPPLEMENTAL I NDENTURES
SECTION 901.    Supplemental Indentures Without Consent of Holders    72
SECTION 902.    Supplemental Indentures With Consent of Holders    74
SECTION 903.    Execution of Supplemental Indentures    75
SECTION 904.    Effect of Supplemental Indentures    75
SECTION 905.    Conformity with Trust Indenture Act    75
SECTION 906.    Reference in Securities to Supplemental Indentures    75
ARTICLE TEN
C OVENANTS
SECTION 1001.    Payment of Principal, Premium and Interest    76
SECTION 1002.    Maintenance of Office or Agency    76
SECTION 1003.    Money for Securities Payments to Be Held in Trust    76
SECTION 1004.    Statement by Officers as to Default    77
SECTION 1005.    Existence    77
SECTION 1006.    Limitation on Liens    78
SECTION 1007.    Sale-Leaseback Transactions    80
SECTION 1008.    Waiver of Certain Covenants    82
SECTION 1009.    Additional Amounts    82
SECTION 1010.    Additional Information    84
SECTION 1011.    Notice of Event of Default    85
SECTION 1012.    Indemnification of Judgment Currency    85
SECTION 1013.    Further Instruments and Acts    85
ARTICLE ELEVEN
R EDEMPTION OF S ECURITIES
SECTION 1101.    Applicability of Article    85
SECTION 1102.    Election to Redeem; Notice to Trustee    85
SECTION 1103.    Selection by Trustee of Securities to Be Redeemed    86
SECTION 1104.    Notice of Redemption    86
SECTION 1105.    Deposit of Redemption Price    87
SECTION 1106.    Securities Payable on Redemption Date    87
SECTION 1107.    Securities Redeemed in Part    88

 

-v-


ARTICLE TWELVE
S INKING F UNDS
SECTION 1201.    Applicability of Article    88
SECTION 1202.    Satisfaction of Sinking Fund Payments with Securities    88
SECTION 1203.    Redemption of Securities for Sinking Fund    89
ARTICLE THIRTEEN
D EFEASANCE AND C OVENANT D EFEASANCE
SECTION 1301.    Company’s and the Parent Guarantor’s Option to Effect Defeasance or Covenant Defeasance    89
SECTION 1302.    Defeasance and Discharge    89
SECTION 1303.    Covenant Defeasance    90
SECTION 1304.    Conditions to Defeasance or Covenant Defeasance    90
SECTION 1305.    Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions    92
SECTION 1306.    Reinstatement    92
SECTION 1307.    Qualifying Trustee    93

 

-vi-


INDENTURE, dated as of October 16, 2009, between Anheuser-Busch InBev Worldwide Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), Anheuser-Busch InBev NV/SA, a société anonyme duly organized and existing under the laws of the Kingdom of Belgium (herein called the “Parent Guarantor”), the Subsidiaries of the Parent Guarantor party hereto from time to time, as Guarantors, and The Bank of New York Mellon Trust Company, N.A., a national banking association, as Trustee (herein called the “Trustee”).

R ECITALS OF THE C OMPANY AND THE G UARANTORS

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.

The Guarantors have duly authorized the execution and delivery of this Indenture to provide for the issuance of Guarantees with respect to the Securities.

All things necessary to make this Indenture a valid agreement of the Company and the Guarantors, in accordance with its terms, have been done.

Now, T HEREFORE , T HIS I NDENTURE W ITNESSETH :

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

ARTICLE ONE

D EFINITIONS AND O THER P ROVISIONS

OF G ENERAL A PPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, as applied by the Parent Guarantor, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted — at the date of this instrument — at the date of such computation in the jurisdiction of incorporation of the Parent Guarantor;


(4) unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and

(5) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

“AB InBev France Subsidiary” means an entity of which AB InBev France S.A.S. has direct or indirect control or owns directly or indirectly more than 50 percent of the voting share capital or similar right of ownership; and “control” for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise.

“Act”, when used with respect to any Holder, has the meaning specified in Section 104.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“AmBrew Guaranteed Facilities” means: (i) the €2,500,000,000 syndicated credit facility agreement dated December 8, 2005 among the Parent Guarantor, Fortis Bank and others; (ii) the €200,000,000 facility agreement dated April 15, 2008 between BrandBrew S.A. and Fortis Bank as lender; (iii) the €150,000,000 facility agreement dated March 20, 2008 between BrandBrew S.A. and Santander Benelux S.A./NV as lender; (iv) the €250,000,000 facility agreement dated April 3, 2008 between BrandBrew S.A. and Société Générale as lender; (v) the €50,000,000 facility agreement dated as of August 29, 2007 among BrandBrew S.A., the Parent Guarantor and S G Immobel SA as lender; (vi) the €150,000,000 facility agreement dated May 13, 2008 between the Parent Guarantor, Cobrew NV/SA and BNP Paribas as lender; (vii) the €150,000,000 facility agreement dated June 20, 2008 between, amongst others, the Parent Guarantor, Cobrew NV/SA and The Royal Bank of Scotland plc as lender; (viii) the Existing Target Debt; (ix) any notes issued by BrandBrew S.A. or the Parent Guarantor under the Programme; (ix) the Senior Facilities Agreement; and (x) any Securities issued hereunder, or any refinancing (in whole or part) of any of the above items for the same or a lower amount.

“AmBrew Subsidiaries” means each entity of which AmBrew S.A. has direct or indirect control or owns directly or indirectly more than 50 percent of the voting share capital or similar right of ownership; and “control” for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise.

 

-2-


“Anheuser-Busch InBev Group” means the Parent Guarantor or the Parent Guarantor and the group of companies owned and/or controlled by the Parent Guarantor, as the context requires;

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Security, the rules and procedures of the Depositary with respect thereto that apply to such transfer or exchange.

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series.

“Board of Directors” means either the board of directors or other managing body of the Company or the Parent Guarantor, as applicable, or any duly authorized committee of that board or managing body.

“Board Resolution” means a copy of a resolution certified by the Secretary or any Assistant Secretary, in the case of the Company, or a manager or other authorized officer or person, in the case of any Guarantor, to have been duly adopted by the Board of Directors of the Company or the applicable Guarantor, as applicable, and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“BrandBrew Guaranteed Facilities” means: (i) the €2,500,000,000 syndicated credit facility agreement dated December 8, 2005 among the Parent Guarantor, Fortis Bank and others; (ii) the €150,000,000 facility agreement dated May 13, 2008 between the Parent Guarantor, Cobrew NV/SA and BNP Paribas as lender; (iii) the €150,000,000 facility agreement dated June 20, 2008 between, amongst others, the Parent Guarantor, Cobrew NV/SA and The Royal Bank of Scotland plc as lender; (iv) the Existing Target Debt; (v) the $850,000,000 note purchase and guarantee agreement dated October 22, 2003 and entered into between, amongst others, the Parent Guarantor as issuer, Cobrew NV/SA and BrandBrew S.A.; (vi) any notes issued by BrandBrew S.A. or the Parent Guarantor under the Programme; (vii) the Senior Facilities Agreement; and (viii) any Securities issued hereunder, or any refinancing (in whole or part) of any of the above items for the same or a lower amount.

“BrandBrew Subsidiaries” means each entity of which BrandBrew S.A. has direct or indirect control or owns directly or indirectly more than 50 percent of the voting share capital or similar right of ownership; and “control” for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise.

“Business Day”, when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

“Certificated Security” means a certificated Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 204 (or such legends as may be specified as contemplated by Section 301 of such Securities) and that is registered in the name of the Holder thereof.

 

-3-


“Clearstream” means Clearstream Banking, société anonyme , Luxembourg (or any successor securities clearing agency).

“Commission” means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or if at any time after the execution of this instrument such Commission is not existing and performing its duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by its President, Chairman of the Board, any Vice-President, Treasurer, Secretary, Assistant Secretary or other authorized officer and delivered to the Trustee.

“Corporate Trust Office” means the designated office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date hereof is located at 911 Washington Avenue, 3rd Floor, St. Louis, Missouri 63101, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“Corporation” means a corporation, association, company, joint-stock company or business trust.

“Covenant Defeasance” has the meaning specified in Section 1303.

“Defaulted Interest” has the meaning specified in Section 307.

“Defeasance” has the meaning specified in Section 1302.

“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301.

“Distribution Compliance Period” has the meaning specified in Section 305(b)(1)(A).

“Distributor” has the meaning specified in Section 305(b)(1)(A).

“DTC” means The Depository Trust Company, its nominees, successors and assigns.

“Encumbrance” means, any mortgage, pledge, security interest or lien.

 

-4-


“Euroclear” means the Euroclear Bank S.A./N.V. (or any successor securities clearing agency).

“Event of Default” has the meaning specified in Section 501.

“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.

“Existing Target Debt” means the following notes, debentures and bonds of Anheuser-Busch Companies, Inc.: (i) 6.450% debentures due September 1, 2037; (ii) 5.50% notes due January 15, 2018; (iii) 9.0% debentures due December 1, 2009; (iv) 6.75% debentures due December 15, 2027; (v) 6.50% debentures due January 1, 2028; (vi) 5.75% notes due April 1, 2010; (vii) 7.50% notes due March 15, 2012; (viii) 7.55% debentures due October 1, 2030; (ix) 6.80% debentures due January 15, 2031; (x) 6.00% notes due April 15, 2011; (xi) 6.80% debentures due August 20, 2032; (xii) 5.625% notes due October 1, 2010; (xiii) 6.00% debentures due November 1, 2041; (xiv) 6.50% debentures due May 1, 2042; (xv) 6.50% debentures due February 1, 2043; (xvi) 4.375% notes due January 15, 2013; (xvii) 5.95% debentures due January 15, 2033; (xviii) 4.625% notes due February 1, 2015; (xix) 4.50% notes due April 1, 2018; (xx) 5.35% notes due May 15, 2023; (xxi) 4.95% notes due January 15, 2014; (xxii) 5.05% notes due October 15, 2016; (xxiii) 5.00% notes due March 1, 2019; (xxiv) 4.70% notes due April 15, 2012; (xxv) 5.00% notes due January 15, 2015; (xxvi) 5.491% notes due November 15, 2017; (xxvii) 5.75% debentures due April 1, 2036; (xxviii) 5.60% notes due March 1, 2017; (xxix) notes issued on December 1, 1989 by the Development Authority of Cartersville; (xxx) notes issued on November 1, 1990 by the Development Authority of Cartersville; (xxxi) notes issued on May 1, 1991 by The Industrial Development Authority of the City of St. Louis, Missouri; (xxxii) notes issued on April 1, 1997 by the Industrial Development Authority of the County of James City, Virginia; (xxxiii) notes issued on April 1, 1997 by the Development Authority of Cartersville; (xxxiv) notes issued on August 1, 1999 by the Ohio Water Development Agency; (xxxv) notes issued on December 1, 1999 by The Onondaga County Industrial Development Agency; (xxxvi) notes issued on July 1, 2000 by the Ohio Water Development Agency; (xxxvii) notes issued on November 1, 2001 by the Ohio Water Development Agency; (xxxviii) notes issued on March 1, 2002 by the Development Authority of Cartersville; (xxxix) notes issued on 1 April 2002 by the Gulf Coast Waste Disposal Authority; (xl) notes issued on October 1, 2002 by the City of Jonesboro, Arkansas; (xli) notes issued on July 1, 2006 by The Onondaga County Industrial Development Agency; (xlii) notes issued on February 1, 2007 by The Business Finance Authority of the State of New Hampshire; (xliii) notes issued on February 1, 2007 by the Jacksonville Economic Development Commission; (xliv) notes issued on February 1, 2007 by the City of Fort Collins, Colorado; (xlv) notes issued on February 1, 2007 by The Industrial Development Authority of the City of St. Louis, Missouri; (xlvi) notes issued on February 1, 2007 by the California Statewide Communities Development Authority; (xlvii) notes issued on May 31, 2007 by the New Jersey Economic Development Authority; (xlviii) notes issued on August 1, 2007 by the Development Authority of Cartersville; and (xlix) notes issued on September 1, 2007 by the California Enterprise Development Authority.

“Expiration Date” has the meaning specified in Section 104.

 

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“Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 204 (or such legend as may be specified as contemplated by Section 301 for such Securities).

“Guarantees” means the guarantees of the Parent Guarantor and any other Guarantor party hereto from time to time to be endorsed on the Securities authenticated and delivered hereunder.

“Guarantor” means the Parent Guarantor and any Subsidiary Guarantor under this Indenture from time to time.

“Holder” means a Person in whose name a Security is registered in the Security Register.

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 301.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Security through a Participant.

“Interest”, when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

“Interest Payment Date”, when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

“Investment Company Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.

“January Indenture” means the Indenture, dated as of January 12, 2009, among Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev NV/SA, the subsidiary guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York Mellon, New York Branch).

“Judgment Currency” has the meaning specified in Section 1012.

“Law of 2002” has the meaning specified in Section 209(b).

“Luxembourg Guarantor” has the meaning specified in Section 209(b).

“Maturity”, when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

 

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“Net Tangible Assets” means the total assets of the Parent Guarantor and its Restricted Subsidiaries (including, with respect to the Parent Guarantor, its net investment in subsidiaries other than Restricted Subsidiaries) after deducting therefrom (a) all current liabilities (excluding any thereof constituting debt by reason of being renewable or extendable) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense, organization and developmental expenses and other like segregated intangibles, all as computed by the Parent Guarantor in accordance with generally accepted accounting principles applied by the Parent Guarantor as of a date within 90 days of the date as of which the determination is being made; provided that any items constituting deferred income taxes, deferred investment tax credit or other similar items shall not be taken into account as a liability or as a deduction from or adjustment to total assets

“Notice of Default” means a written notice of the kind specified in Section 501(4) or 501(5).

“Officer’s Certificate” means a certificate signed by the Chairman of the Board of Directors, the President, any Vice-President, the Treasurer, a Secretary, an Assistant Secretary or any other authorized officer, in the case of the Company, and, in the case of any Guarantor, any manager or authorized officer or person, and delivered to the Trustee. One of the officers signing an Officer’s Certificate given pursuant to Section 1004 shall, in the case of the Company, be the principal executive, financial or accounting officer.

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company or the applicable Guarantor, and who shall be reasonably acceptable to the Trustee.

“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

“Outstanding”, when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

(1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(2) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company or a Guarantor) in trust or set aside and segregated in trust by the Company (if the Company or a Guarantor shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(3) Securities as to which Defeasance has been effected pursuant to Section 1302; and

 

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(4) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

provided , however , that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 502; (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301; (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause); and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

“Parent Guarantor” has the meaning specified in the first paragraph of this Indenture, and any successor or permitted assign.

“Participant” means, with respect to any Depositary, a Person who is a participant of or has an account with such Depositary, respectively.

“Paying Agent” means any Person authorized by the Company or a Guarantor to pay the principal of or any premium or interest on any Securities on behalf of the Company or Guarantor.

“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Place of Payment”, when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301.

 

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“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

“Principal Plant” means (a) any brewery, or any manufacturing, processing or packaging plant, now owned or hereafter acquired by the Parent Guarantor or any Subsidiary, but shall not include (i) any brewery or manufacturing, processing or packaging plant which the Parent Guarantor shall by Board Resolution have determined is not of material importance to the total business conducted by the Parent Guarantor and its Subsidiaries, (ii) any plant which the Parent Guarantor shall by Board Resolution have determined is used primarily for transportation, marketing or warehousing (any such determination to be effective as of the date specified in the applicable Board Resolution) or (iii) at the option of the Parent Guarantor, any plant that (A) does not constitute part of the brewing operations of the Parent Guarantor and its Subsidiaries and (B) has a net book value, as reflected on the balance sheet contained in the Parent Guarantor’s financial statements of not more than $100,000,000; and (b) any other facility owned by the Parent Guarantor or any of its Subsidiaries that the Parent Guarantor shall, by Board Resolution, designate as a Principal Plant.

“Programme” means the Euro Medium Term Note Programme established by BrandBrew S.A. and the Parent Guarantor, as issuers, in January 2009.

“Redemption Date”, when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

“Redemption Price”, when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.

“Restricted Certificated Security” means a Certificated Security offered and sold pursuant to an exemption from registration under the Securities Act.

“Restricted Global Security” means a Global Security offered and sold pursuant to an exemption from registration under the Securities Act.

“Restricted Subsidiary” means (a) any Subsidiary which owns or operates a Principal Plant, (b) any other subsidiary which the Parent Guarantor, by Board Resolution, shall elect to be treated as a Restricted Subsidiary, until such time as the Parent Guarantor may, by further Board Resolution, elect that such Subsidiary shall no longer be a Restricted Subsidiary, successive such elections being permitted without restriction, and (c) the Company and the Subsidiary Guarantors; provided that each of Companhia de Bebidas das Américas – AmBev and Grupo Model S.A.B. de C.V. shall not be “Restricted Subsidiaries” until and unless the Parent Guarantor owns, directly or indirectly, 100% of the equity interests in such company. Any such election will be effective as of the date specified in the applicable Board Resolution.

 

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“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.

“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.

“Senior Facility Agreement” means the $45 billion senior facilities agreement, dated as of July 12, 2008 as amended as of July 23, 2008, August 21, 2008 and September 3, 2008, for the Parent Guarantor and the Company, arranged by Banco Santander, S.A., Barclays Capital, BNP Paribas, Deutsche Bank AG, London Branch, Fortis Bank SA/NV, ING Bank N.V., J.P. Morgan PLC, Mizuho Corporate Bank, LTD., the Bank of Tokyo-Mitsubishi UFJ, LTD. and The Royal Bank of Scotland PLC, as mandated lead arrangers and bookrunners, and Fortis Bank SA/NV, acting as agent and issuing bank.

“Significant Subsidiary” means any Subsidiary (i) the consolidated revenue of which represents 10% of more of the consolidated revenue of the Parent Guarantor, (ii) the consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) of which represents 10% or more of the consolidated EBITDA of the Parent Guarantor, or (iii) the consolidated gross assets of which represent 10% or more of the consolidated gross assets of the Parent Guarantor, in each case as reflected in the most recent annual audited financial statements of the Parent Guarantor, provided that (A) in the case of a Subsidiary acquired by the Parent Guarantor during or after the financial year shown in the most recent annual audited financial statements of the Parent Guarantor such calculation shall be made on the basis of the contribution of the Subsidiary considered on a pro forma basis as if it had been acquired at the beginning of the relevant period, with the pro forma calculation (including any adjustments) being made by the Parent Guarantor acting in good faith, and (B) EBITDA shall be calculated by the Parent Guarantor in substantially the same manner as it is calculated for the amounts shown in the offering memorandum or circular for the relevant series of Securities.

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

“Stated Maturity”, when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

“Subsidiary” means any corporation of which more than 50% of the issued and outstanding stock entitled to vote for the election of directors (otherwise than by reason of default in dividends) is at the time owned directly or indirectly by the Parent Guarantor or a Subsidiary or Subsidiaries or by the Parent Guarantor and a Subsidiary or Subsidiaries.

“Subsidiary Guarantor” shall initially include each of the following companies and shall subsequently include any Subsidiary of the Parent Guarantor that provides a Guarantee under this Indenture from time to time:

 

   

Anheuser-Busch Companies, Inc., a corporation duly organized and existing under the laws of the State of Delaware;

 

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InBev Belgium SA/NV, a public limited liability company organized and existing under Belgian law;

 

   

BrandBrew S.A., a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696;

 

   

Cobrew NV/SA, a public limited liability company organized and existing under Belgian law;

 

   

AB InBev France S.A.S., a société par actions simplifiée organized and existing under French law;

 

   

Interbrew International B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands;

 

   

Interbrew Central European Holding B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands;

 

   

Nimbuspath Limited, a private limited company organized and existing under United Kingdom law;

 

   

AmBrew S.A., a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525; and

 

   

InBev Nederland N.V., a limited liability company incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands.

“Trust Indenture Act” means the Trust Indenture Act of 1939, including the rules promulgated thereunder, as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended and any statute successor thereto.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

“U.S. Government Obligation” has the meaning specified in Section 1304.

“Unrestricted Certificated Security” means a Certificated Security the restrictions on transfer of which have expired or otherwise been removed.

 

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“Unrestricted Global Security” means a Global Security the restrictions on transfer of which have expired or otherwise been removed.

“Vice President”, when used with respect to the Company or a Guarantor or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president”.

SECTION 102. Compliance Certificates and Opinions.

Upon any application or request by the Company or the Parent Guarantor to the Trustee to take any action under any provision of this Indenture, the Company or the Parent Guarantor, as applicable, shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officer’s Certificate, if to be given by an officer of the Company or the Parent Guarantor, as applicable, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 1004) shall include:

(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

SECTION 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company or the Parent Guarantor, as applicable, may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of

 

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reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or the Parent Guarantor, as applicable, stating that the information with respect to such factual matters is in the possession of the Company or the Parent Guarantor, as applicable, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 104. Acts of Holders; Record Dates.

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company or the Parent Guarantor. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee, the Company or the Parent Guarantor, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

The ownership of Securities shall be proved by the Security Register.

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Company or the Parent Guarantor in reliance thereon, whether or not notation of such action is made upon such Security.

The Company and the Parent Guarantor may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by

 

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Holders of Securities of such series, provided that the Company and the Parent Guarantor may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date, provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company or the Parent Guarantor from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company or the Parent Guarantor, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2), or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s or the Parent Guarantor’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company and the Parent Guarantor in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this

 

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Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

SECTION 105. Notices, Etc., to Trustee, the Company and a Guarantor.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided for or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company or a Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, 911 Washington Ave, 3rd Floor St. Louis, Missouri 63101, USA, Attention: Corporate Trust Administration, or

(2) the Company or a Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company and a Guarantor, as applicable, addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company or a Guarantor.

SECTION 106. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee in its sole discretion shall constitute a sufficient notification for every purpose hereunder.

 

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The costs of any such notice to Holders as provided in this Section 106 shall be paid by the Company.

Any request, demand, authorization, direction, notice, consent or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

SECTION 107. Conflict with Trust Indenture Act.

Until such time, if any, as this Indenture shall be qualified under the Trust Indenture Act, this Indenture, the Company, the Guarantors and the Trustee shall be deemed for all purposes hereof to be subject to and governed by the Trust Indenture Act to the same extent as would be the case if this Indenture were so qualified on the date hereof. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under the Trust Indenture Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

SECTION 108. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

SECTION 109. Successors and Assigns.

All covenants and agreements in this Indenture by the Company and any Guarantor shall bind their successors and assigns, whether so expressed or not.

SECTION 110. Separability Clause.

In case any provision in this Indenture, the Guarantees or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 111. Benefits of Indenture.

Nothing in this Indenture, in the Guarantees or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 112. Governing Law; Waiver of Trial by Jury.

This Indenture, the Guarantees and the Securities shall be governed by and construed in accordance with the laws of the State of New York. Each of the Company, the Guarantors and the Trustee hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Indenture, the Securities or the transactions contemplated hereby.

 

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SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture, of the Guarantees or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity.

SECTION 114. Submission to Jurisdiction; Waiver of Immunity.

For the benefit of the Holders, each of the Company and each Guarantor hereby (i) irrevocably submits to the non-exclusive jurisdiction of any New York State court or United States federal court sitting in the Borough of Manhattan in the City of New York solely for purposes of any legal action or proceeding arising out of or relating to the Securities and (ii) irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any legal action or proceeding in any New York State court or United States federal court sitting in the Borough of Manhattan in the City of New York, and any claim that any such action or proceedings brought in any such court has been brought in an inconvenient forum. Each of the Company and the Parent Guarantor agrees that a final judgment in any such legal action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Any legal action or proceeding arising out of or relating to the Securities may also be brought and enforced in the courts of the Kingdom of Belgium and each of the Company and each Guarantor irrevocably submits to the jurisdiction of each such court in respect of any such action or proceeding.

To the extent that the Company or any Guarantor may in any jurisdiction claim for itself or its assets immunity (to the extent that any immunity may now or hereafter exist) from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process (whether through service or notice or otherwise), and to the extent that in any such jurisdiction there may be attributed to itself or its assets such immunity (whether or not claimed), the Company and each Guarantor irrevocably agree not to claim, and irrevocably waive, such immunity to the full extent permitted by the laws of such jurisdiction.

SECTION 115. Appointment of Agent for Service of Process.

By the execution and delivery of this Indenture, each Guarantor (except for Anheuser-Busch Companies, Inc.) hereby appoints InBev USA LLC as its agent upon which process may be served in any legal action or proceeding which may be instituted in any Federal or State court in the Borough of Manhattan, the City of New York, arising out of or relating to the Securities or the Guarantees or this Indenture, but for that purpose only. Service of process upon such agent at the office of InBev USA LLC at Key Center, North Tower, Suite 900, 50 Fountain Plaza, Buffalo, New York 14202, and written notice of said service to such Guarantor by the Person servicing the same addressed as provided

 

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by Section 105, shall be deemed in every respect effective service of process upon such Guarantor, respectively, in any such legal action or proceeding, and such Guarantor hereby submits to the nonexclusive jurisdiction of any such court in which any such legal action or proceeding is so instituted. Such appointment shall be irrevocable so long as the Holders of Securities shall have any rights pursuant to the terms thereof or of this Indenture until the appointment of a successor by such Guarantor with the consent of the Trustee and such successor’s acceptance of such appointment. Each such Guarantor further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of such agent or successor.

SECTION 116. Waiver of Claims.

Without prejudice to any provisions of this Indenture, each Guarantor hereby irrevocably and unconditionally waives any right it may have at any time or claim under Jersey law: (a) whether by virtue of the droit de discussion or otherwise to require that recourse be had by any holder of a Security, the Trustee or the Paying Agent to the assets of any other person before any claim is enforced against such Guarantor in respect of the obligations assumed by it under this Indenture and each of its Guarantees; and (b) whether by virtue of the droit de division or otherwise to require that any liability under this Indenture or any of its Guarantees be divided or apportioned with any other person or reduced in any manner whatsoever.

ARTICLE TWO

S ECURITY AND G UARANTEE F ORMS

SECTION 201. Forms Generally.

The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by a the Secretary or Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities.

The Guarantees to be endorsed on the Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution of a Guarantor or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers

 

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executing such Securities, as evidenced by their execution of the Securities. If the form of the guarantees to be endorsed on the Securities of any series is established by action taken pursuant to a Board Resolution of a Guarantor, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary, or officer or person serving in a similar capacity, of the applicable Guarantor and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities.

The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

SECTION 202. Form of Face of Security.

[ Insert any legend required by the Internal Revenue Code and the regulations thereunder. ]

Anheuser-Busch InBev Worldwide Inc.

[ Title of Security ]

Payment of Principal [ , Premium, if any, ]

and Interest Irrevocably, Fully and Unconditionally Guaranteed by

Anheuser-Busch InBev NV/SA and Various Subsidiary Guarantors

 

No.   $             

Anheuser-Busch InBev Worldwide Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to                    , or registered assigns, the principal sum of                    dollars on                     [ if the Security is to bear interest prior to Maturity, insert  — , and to pay interest thereon from                    or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on            and            in each year, commencing                    , at the rate of % per annum, until the principal hereof is paid or made available for payment [ if applicable, insert — ; provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand ] . The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the                    or                     (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to

 

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such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture ] .

[ If the Security is not to bear interest prior to Maturity, insert  — The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity, and in such case the overdue principal and any overdue premium shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand. [ Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of % per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment. Interest on any overdue interest shall be payable on demand. ]

Payment of the principal of (and premium, if any) and [ if applicable, insert  — any such ] interest on this Security will be made at the office or agency of the Company maintained for that purpose in                    , in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [ if applicable, insert  —; provided , however , that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register ] .

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

I N W ITNESS W HEREOF , the Company has caused this instrument to be duly executed [ include only if required by applicable law: under its corporate seal].

Dated:

 

 

By    

 

Attest:
   

SECTION 203. Form of Reverse of Security.

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October 16, 2009, (herein called the “Indenture”, which term shall

 

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have the meaning assigned to it in such instrument), among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [ if applicable, insert —, limited in aggregate principal amount to $             ] .

[ If applicable, insert  — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, [ if applicable, insert  — (1) on             in any year commencing with the year            and ending with the year             through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2) ]  at any time [ if applicable, insert  — on or after         , 20 ] , as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [ if applicable, insert  — on or before                    , %, and if redeemed ] during the 12-month period beginning              of the years indicated,

 

Year

  

Redemption

Price

  

Year

  

Redemption

Price

        

and thereafter at a Redemption Price equal to % of the principal amount, together in the case of any such redemption [ if applicable, insert  — (whether through operation of the sinking fund or otherwise) ] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. ]

[ If applicable, insert  — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, (1) on             in any year commencing with the year            and ending with the year            through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [ if applicable, insert  — on or after                     ] , as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning            of the years indicated,

 

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Year

  

Redemption Price
For Redemption
Through Operation
of the
Sinking Fund

  

Redemption Price For
Redemption Otherwise
Than Through Operation
of the Sinking Fund

     

and thereafter at a Redemption Price equal to % of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. ]

[ If applicable, insert  — Notwithstanding the foregoing, the Company may not, prior to             , redeem any Securities of this series as contemplated by [ if applicable, insert  — Clause (2) of ] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than % per annum. ]

[ If applicable, insert  — The sinking fund for this series provides for the redemption on in each year beginning with the year             and ending with the year of [ if applicable, insert  — not less than $             (“mandatory sinking fund”) and not more than ] $             aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [ if applicable, insert  — mandatory ] sinking fund payments may be credited against subsequent [ if applicable, insert  — mandatory ] sinking fund payments otherwise required to be made [ if applicable, insert  — , in the inverse order in which they become due ] . ]

[ If the Security is subject to redemption of any kind, insert  — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. ]

[ If applicable, insert paragraph regarding subordination of the Security. ]

[ If applicable, insert  — The Indenture contains provisions for defeasance at any time of [ the entire indebtedness of this Security ] [ or ] [ certain restrictive covenants and Events of Default with respect to this Security ] [ , in each case ] upon compliance with certain conditions set forth in the Indenture. ]

[ If the Security is not an Original Issue Discount Security, insert  — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. ]

 

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[ If the Security is an Original Issue Discount Security, insert  — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to — insert formula for determining the amount . Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate. ]

[ If applicable, add – In the event that any Guarantor becomes obligated to make payments in respect of the Securities, such Guarantor will make all payments in respect of the Securities without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax (the “Relevant Taxing Jurisdiction”) unless such withholding or deduction is required by law. In such event, such Guarantor will pay to the Holders such additional amounts (the “Additional Amounts”) as shall be necessary in order that the net amounts received by the Holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:

(a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by such Guarantor from payment of principal or interest made by it, or

(b) are payable by reason of the Holder or beneficial owner having, or having had, some personal or business connection with such Relevant Taxing Jurisdiction and not merely by reason of the fact that payments in respect of the Securities or the Guarantees are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in the Relevant Taxing Jurisdiction, or

(c) are imposed or withheld by reason of the failure of the Holder or beneficial owner to provide certification, information, documents or other evidence concerning the nationality, residence, or identity of the Holder and beneficial owner or to make any valid or timely declaration or similar claim or satisfy any other reporting requirements relating to such matters, whether required or imposed by statute, treaty, regulation or administrative practice, as a precondition to exemption from, or a reduction in the rate of withholding or deduction of such taxes, or

(d) consist of any estate, inheritance, gift, sales, excise, transfer, personal property or similar taxes, or

(e) are imposed on or with respect to any payment by the applicable Guarantor to the registered Holder if such Holder is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent that taxes would not have been imposed on such payment had such registered Holder been the sole beneficial owner of such Security, or

 

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(f) are deducted or withheld pursuant to (i) any European Union directive or regulation concerning the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Relevant Taxing Jurisdiction or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such directive, regulation, treaty or understanding, or

(g) are payable by reason of a change in law or practice that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and written notice thereof is provided to the Holders, whichever occurs later, or

(h) are payable because any Security was presented to a particular paying agent for payment if the Security could have been presented to another paying agent without any such withholding or deduction, or

(i) are payable for any combination of (a) through (h) above.

References to principal or interest in respect of the Securities shall be deemed to include any Additional Amounts which may be payable as set forth in the Indenture.

The covenant regarding Additional Amounts will not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States, and will apply to the Company any time it is incorporated in a jurisdiction outside of the United States.]

[ If applicable, add – The Securities may be redeemed at any time, at the Company’s or the Parent Guarantor’s option, as a whole, but not in part, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of the Securities then outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the redemption date, if (i) any change in, or amendment to, the laws, treaties, regulations or rulings of a Relevant Taxing Jurisdiction (as defined below) or in the interpretation, application or administration of any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the issue date (any such change or amendment, a “Change in Tax Law”) would require the Company (or if a payment were then due under a Guarantee, the relevant Guarantor) to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company (or the relevant Guarantor) taking reasonable measures available to it. Additional Amounts are payable by the Company under the circumstances described below under “—Additional Amounts”; provided, however, that the Securities may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Securities to a Substitute Company, unless this assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor. ]

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company or

 

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the Guarantors and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding affected thereby. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity and/or security, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity and/or security. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of this series are issuable only in registered form without coupons in denominations of $             and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

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No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

SECTION 204. Form of Legends for Securities.

Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Security authenticated and delivered hereunder shall bear legends in substantially the following form:

[ If a Global Security: ]

T HIS S ECURITY IS A G LOBAL S ECURITY WITHIN THE MEANING OF THE I NDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A D EPOSITARY OR A NOMINEE THEREOF . T HIS S ECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A S ECURITY REGISTERED , AND NO TRANSFER OF THIS S ECURITY IN WHOLE OR IN PART MAY BE REGISTERED , IN THE NAME OF ANY P ERSON OTHER THAN SUCH D EPOSITARY OR A NOMINEE THEREOF , EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE I NDENTURE .

U NLESS THIS C ERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE D EPOSITORY T RUST C OMPANY , A NEW YORK CORPORATION (“DTC”), TO A NHEUSER -B USCH I N B EV W ORLDWIDE I NC . OR ITS AGENT FOR REGISTRATION OF TRANSFER , EXCHANGE OR PAYMENT , AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF C EDE  & C O . OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC ( AND ANY PAYMENT IS MADE TO C EDE  & C O . OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER , PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF , C EDE  & C O ., HAS AN INTEREST HEREIN .

[ If a Security that is offered and sold pursuant to Rule 144A or Regulation S under the Securities Act: ]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF (I) IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION, (II) WITHIN THE UNITED STATES

 

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TO, OR FOR THE ACCOUNT OR BENEFIT OF, PERSONS OTHER THAN “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (III) OUTSIDE THE UNITED STATES OTHER THAN TO PERSONS WHO ARE U.S. PERSONS IN OFFSHORE TRANSACTIONS IN ACCORDANCE WITH THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT. EACH PERSON ACQUIRING AN OWNERSHIP INTEREST IN THIS SECURITY (1) SHALL BE DEEMED TO REPRESENT AND WARRANT THAT IT EITHER (A) IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) AND IS OUTSIDE THE UNITED STATES OR (C) IS ACQUIRING SUCH OWNERSHIP INTEREST PURSUANT TO A VALID REGISTRATION STATEMENT OR IN ANOTHER TRANSACTION EXEMPT FROM SUCH REGISTRATION; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT IN ACCORDANCE WITH THE FOREGOING RESTRICTIONS, AND IN ANY CASE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION; (3) PRIOR TO SUCH TRANSFER, AGREES THAT IT WILL FURNISH TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS REGISTRAR (OR A SUCCESSOR REGISTRAR, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE REGISTRAR AND THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “UNITED STATES”, “U.S. PERSON” AND “OFFSHORE TRANSACTION” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

[ For all Securities: ]

THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

SECTION 205. Form of Trustee’s Certificate of Authentication.

The Trustee’s certificates of authentication shall be in substantially the following form:

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

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THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

As Trustee

By    
  Authorized Signatory

SECTION 206. Guarantee by Guarantors.

Subject to this Indenture and unless provided otherwise with respect to a series of Securities under any Board Resolution or indenture supplement establishing the terms of such series of Securities, each Guarantor hereby jointly and severally, irrevocably, fully and unconditionally guarantees to the Holder of any Security issued under this Indenture duly authenticated and delivered by the Trustee, the due and punctual payment of the principal, and premium, if any, of (including any amount in respect of original issue discount) and interest, if any (together with any Additional Amounts payable pursuant to the terms of such Security), on such Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of such Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption, repayment or upon declaration of acceleration or otherwise according to the terms of such Security and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), and any premium or interest (together with any Additional Amounts payable pursuant to the terms of such Security), sinking fund payment, or analogous obligation, each Guarantor agrees duly and punctually to pay the same when and as the same shall become due and payable. Each Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety and shall be absolute and unconditional irrespective of any extension of the time for payment of such Security, any modification of such Security, any invalidity, irregularity or unenforceability of such Security or the Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the holder of such Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to such Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium or interest (together with any Additional Amounts payable pursuant to the terms of such Security) thereon.

The Guarantee to be endorsed on the Securities shall, subject to Section 201 and Section 209, be in substantially the form set forth below:

GUARANTEE

For value received, the undersigned (herein called the “Guarantors”, and each, a “Guarantor”, which terms include any successor Person or Persons under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby jointly and severally, irrevocably, fully and unconditionally guarantee to each holder of a Security of each series authenticated and delivered by the Trustee the due and punctual payment of

 

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the principal of (including any amount in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of such Security) on, such Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of such Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption or upon declaration of acceleration or otherwise according to the terms of such Security and of this Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), interest (together with any Additional Amounts payable pursuant to the terms of such Security), sinking fund payment, or analogous obligation, each Guarantor agrees duly and punctually to pay the same. Each Guarantor hereby agrees that its obligations hereunder shall rank pari passu with all other unsecured and unsubordinated obligations of such Guarantor, shall be as principal and not merely as surety, and shall be absolute and unconditional irrespective of any extension of the time for payment of any such Security, any modification of any such Security, any invalidity, irregularity or unenforceability of any such Security or this Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the Holder of such Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to any such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to any such Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of such Security), thereon.

Each Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of a Holder against the Company with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other obligor with respect to such payment.

This Guarantee shall not be valid or become obligatory for any purpose with respect to this Security until the certificate of authentication on this Security shall have been signed by the Trustee.

This Guarantee is subject to certain limitations and waivers set forth in the Indenture, as it may be amended from time to time.

This Guarantee is governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be signed by facsimile by its duly authorized officer or representative and, if required by applicable law, has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

 

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  [GUARANTOR(S)]
By    

SECTION 207. Additional Guarantees.

The form and terms of any Guarantee by any subsequent Subsidiary Guarantor, including any applicable legal, regulatory or contractual restrictions, shall be specified in an indenture supplement hereto pursuant to Section 901(2) and may be changed for any such series of Securities as provided in the applicable indenture supplement.

SECTION 208. Release of Guarantee.

Any Guarantor other than the Parent Guarantor shall be entitled to terminate its Guarantee, and the Trustee shall execute a release and termination agreement effecting such termination, in the event that (i) at substantially the same time as its Guarantee of the Securities is terminated, the relevant Guarantor is released from its guarantee of or is no longer a guarantor under the Senior Facility Agreement and (ii) the aggregate amount of indebtedness for borrowed money for which the relevant Guarantor is an obligor (as a guarantor or borrower) does not exceed 10% of the consolidated gross assets of the Parent Guarantor as reflected in the balance sheet included in its most recent publicly released interim or annual consolidated financial statements. For purposes of this clause, the amount of a Guarantor’s indebtedness for borrowed money shall not include (A) any Securities issued under this Indenture or the January Indenture, (B) any other debt the terms of which permit the termination of the Guarantor’s guarantee of such debt under similar circumstances, as long as such Guarantor’s obligations in respect of such other debt are terminated at substantially the same time as its guarantee of the relevant series of Securities in respect of which its Guarantee is being terminated, and (C) any debt that is being refinanced at substantially the same time that the Guarantee of the relevant series of Securities in respect of which its Guarantee is being terminated, provided that any obligations of the Guarantor in respect of the debt that is incurred in the refinancing shall be included the calculation of the Guarantor’s indebtedness for borrowed money.

Any Subsidiary Guarantor with limitations on its Guarantee pursuant to Section 209 shall be entitled to terminate its Guarantee, and the Trustee shall execute a release and termination agreement effecting such termination, with respect to any or all series of Securities issued under this Indenture, in the event that such Subsidiary Guarantor determines that under the rules, regulations or interpretations of the Commission such Subsidiary Guarantor would be required to include its financial statements in any registration statement filed with the Commission with respect to Securities or Guarantees issued hereunder or in periodic reports filed with or furnished to the Commission (by reason of such limitations or otherwise).

Any Guarantor other than the Parent Guarantor shall be entitled to terminate its Guarantee, and the Trustee shall execute a release and termination agreement effecting such termination, in the event the Guarantor is no longer a Subsidiary of the Parent Guarantor or disposes of all or substantially all of its assets to a Person who is not a Subsidiary of the Parent Guarantor.

 

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SECTION 209. Limitations on Guarantees.

Further, certain of the Guarantees are subject to legal, regulatory or contractual limitations, as specified below or as may be provided in an indenture supplemental hereto by which a Subsidiary Guarantor may accede to this Indenture. Each such Subsidiary Guarantor shall be entitled to amend or modify by execution of an indenture supplemental hereto the terms of its Guarantee or the limitations applicable to its Guarantee, as set forth in this Section 209, in any respect reasonably deemed necessary by such Subsidiary Guarantor to meet the requirements of Rule 3-10 under Regulation S-X under the Securities Act (or any successor or similar regulation or exemption) in order for financial statements of such Subsidiary Guarantor not to be required to be included in any registration statement or in periodic reports filed with or furnished to the Commission.

 

  (a) Notwithstanding anything to the contrary in the Guarantee provided by AB InBev France S.A.S., such Guarantee shall be subject to the following limitations: (i) the obligations and liabilities of AB InBev France S.A.S. under its Guarantee shall not include any obligation or liability which if incurred would constitute the provision of financial assistance within the meaning of article L.225-216 of the French Commercial Code and/or would constitute a “misuse of corporate assets” within the meaning of article L.241-3 or L.242-6 of the French Commercial Code or any other law or regulations having the same effect, as interpreted by French courts; and (ii) the obligations and liabilities of AB InBev France S.A.S. under its Guarantee for the obligations of the Company shall be limited, at any time, to an amount equal to the aggregate nominal amount of all notes issued by the Company to the extent directly or indirectly on-lent or otherwise provided to AB InBev France S.A.S. and/or any AB InBev France Subsidiary(ies) under intercompany loan or similar arrangements and outstanding at the date a payment is to be made by AB InBev France S.A.S. under its Guarantee. For the avoidance of doubt, any obligations or liabilities that may arise from AB InBev France S.A.S. acting jointly and severally with the other Guarantors (including as applicable as “ co-débiteur solidaire ”) are subject always to the limitations set out in this Section 209(a).

 

  (b) With respect to the Guarantees provided by Interbrew International B.V., Interbrew Central European Holding B.V. and InBev Nederland N.V., any such Guarantee will not apply to any liability to the extent that it would result in such Guarantee constituting unlawful financial assistance.

 

  (c)

Notwithstanding anything to the contrary in the Guarantee provided by AmBrew S.A., the maximum aggregate liability of AmBrew S.A. under such Guarantee shall not exceed an amount equal to the aggregate of (without double counting): (i) the aggregate amount of all moneys received by AmBrew S.A. and the AmBrew Subsidiaries as a borrower or issuer under the AmBrew Guaranteed Facilities; (ii) the aggregate amount of all outstanding intercompany loans made to AmBrew S.A. and the AmBrew Subsidiaries by members of the Anheuser-Busch InBev Group which have been directly or indirectly funded using the proceeds

 

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of borrowings under the AmBrew Guaranteed Facilities; and (iii) an amount equal to 100 percent of the greater of (A) the sum of AmBrew S.A.’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (other than any subordinated debt already accounted for under (ii) above) (both as referred to in article 34 of the Luxembourg law of 19 December 2002 on the commercial register and annual accounts, as amended (the “Law of 2002”)) as reflected in AmBrew S.A.’s most recent annual accounts approved by the competent organ of AmBrew S.A. (as audited by its réviseur d’entreprises (external auditor), if required by law) and (B) the sum of AmBrew S.A.’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (both as referred to in article 34 of the Law of 2002) as reflected in its filed annual accounts available as of the date of its Guarantee. For the avoidance of doubt, the limitation on the Guarantee provided by AmBrew S.A. shall not apply to any Guarantee by AmBrew S.A. of any obligations owed by the AmBrew Subsidiaries under the AmBrew Guaranteed Facilities. In addition to the limitation referred to above in respect of the Guarantee provided by AmBrew S.A., the obligations and liabilities of AmBrew S.A. under the Guarantee provided by AmBrew S.A. and under any of the AmBrew Guaranteed Facilities shall not include any obligation which, if incurred, would constitute a breach of the provisions on financial assistance as defined by article 49-6 of the Luxembourg Law on Commercial Companies dated 10 August 1915, as amended, to the extent such or an equivalent provision is applicable to AmBrew S.A.

 

  (d) Notwithstanding the other terms of the Guarantees provided by AB InBev France S.A.S. and AmBrew S.A., the maximum aggregate amount that may be claimed against AmBrew S.A. and AB InBev France S.A.S., collectively, under their respective Guarantees and under the Guarantees given by AmBrew S.A. and AB InBev France S.A.S. in respect of the AmBrew Guaranteed Facilities (excluding their respective Guarantees) shall not exceed €260,000,000 (or its equivalent in any other currency).

 

  (e)

Notwithstanding anything to the contrary in the Guarantee provided by BrandBrew S.A., the maximum aggregate liability of BrandBrew S.A. under such Guarantee and as a guarantor under the BrandBrew Guaranteed Facilities (excluding its Guarantee) shall not exceed an amount equal to the aggregate of (without double counting): (i) the aggregate amount of all moneys received by BrandBrew S.A. and the BrandBrew Subsidiaries as a borrower or issuer under the BrandBrew Guaranteed Facilities; (ii) the aggregate amount of all outstanding intercompany loans made to BrandBrew S.A. and the BrandBrew Subsidiaries by the Anheuser-Busch InBev Group which have been directly or indirectly funded using the proceeds of borrowings under the BrandBrew Guaranteed Facilities; and (iii) an amount equal to 100 percent of the greater of (A) the sum of BrandBrew S.A.’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (other than any subordinated debt already accounted for under (ii) above) (both as referred to in article 34 of the Luxembourg law of 19 December 2002 on the commercial register and annual accounts, as amended (the “Law

 

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of 2002”)) as reflected in BrandBrew S.A.’s most recent annual accounts approved by the competent organ of BrandBrew S.A. (as audited by its réviseur d’entreprises (external auditor), if required by law) and (B) the sum of BrandBrew’s own capital ( capitaux propres ) and its subordinated debt ( dettes subordonnées ) (both as referred to in article 34 of the Law of 2002) as reflected in its filed annual accounts available as of the date of its Guarantee. For the avoidance of doubt, the limitation on the Guarantee provided by BrandBrew S.A. shall not apply to any Guarantee by BrandBrew S.A. of any obligations owed by the BrandBrew Subsidiaries under the BrandBrew Guaranteed Facilities. In addition to the limitation referred to above in respect of the Guarantee provided by BrandBrew S.A., the obligations and liabilities of BrandBrew S.A. under the Guarantee provided by BrandBrew S.A. and under any of the BrandBrew Guaranteed Facilities shall not include any obligation which, if incurred, would constitute a breach of the provisions on financial assistance as defined by article 49-6 of the Luxembourg Law on Commercial Companies dated 10 August 1915, as amended, to the extent such or an equivalent provision is applicable to BrandBrew S.A.

SECTION 210. CUSIP Numbers.

The Company in issuing any series of the Securities may use CUSIP numbers, if then generally in use, and thereafter with respect to such series, the Trustee may use such numbers in any notice of redemption or exchange with respect to such series provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP numbers.

ARTICLE THREE

T HE S ECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officer’s Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

(1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);

(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of,

 

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or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);

(3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;

(4) the date or dates on which the principal of any Securities of the series is payable;

(5) the rate or rates at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable, and the Regular Record Date for any such interest payable on any Interest Payment Date;

(6) the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;

(7) the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;

(8) the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable;

(10) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined;

(11) if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 101;

(12) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or currency units other than that or those in which such

 

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Securities are stated to be payable, the currency, currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);

(13) if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;

(14) if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);

(15) if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 1302 or Section 1303 or both such Sections and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced;

(16) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 204 and any circumstances in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 305 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

(17) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502;

(18) any addition to or change in the covenants set forth in Article Ten which applies to Securities of the series; and

(19) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5)).

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officer’s Certificate referred to above or in any such indenture supplemental hereto.

 

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If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate setting forth the terms of the series.

All Securities of any one series need not be issued at the same time and, unless otherwise so provided by the Company, a series may be reopened for issuances of additional Securities of such series with identical terms and conditions (other than the issue date, issue price and, if applicable, initial interest accrual date and first Interest Payment Date).

SECTION 302. Denominations.

The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 301. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

SECTION 303. Execution, Authentication, Delivery and Dating.

The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President or one of its Vice Presidents and the Guarantees shall be executed on behalf of the applicable Guarantor by an authorized officer or person, in each case under such entity’s corporate seal if required by applicable law, reproduced thereon. The signature of any of these officers or persons on the Securities or Guarantees may be manual or facsimile.

Securities or Guarantees bearing the manual or facsimile signatures of individuals who were at any time the proper officers or authorized representatives of the Company or a Guarantor, as applicable, shall bind the Company and the applicable Guarantor, as applicable, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company and, if applicable, endorsed with the Guarantees of the Guarantors, to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities with the Guarantees endorsed thereon. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,

(1) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture;

 

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(2) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and

(3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantors; provided , however , that a Guarantee shall not be deemed delivered if pursuant to Section 301 the Security is originally issued without a Guarantee; if the Guarantee is thereafter attached pursuant to an order of a Guarantor, then after authentication of the Guarantee, the Guarantee shall be deemed delivered. The Trustee, in accordance with the Company Order and order of the applicable Guarantor, shall authenticate the Guarantee and deliver such Securities.

 

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SECTION 304. Temporary Securities.

Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities having endorsed thereon the Guarantees duly executed by the Guarantors, which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

If temporary Securities of any series are issued, the Company will cause definitive Securities, having endorsed thereon Guarantees duly executed by the Guarantors of that series, to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series, having endorsed thereon the Guarantees duly executed by the Guarantors, upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, having endorsed thereon the Guarantees duly executed by the Guarantors, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor.

SECTION 305. Registration, Registration of Transfer and Exchange.

(a) Registration, Restriction of Transfer and Exchange, Generally . The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office or in any other office or agency of the Company in a Place of Payment being herein sometimes referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, having endorsed thereon the Guarantees duly executed by the Guarantors, of any authorized denominations and of like tenor and aggregate principal amount.

Subject to this Section 305(a) and Section 305(b), at the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, having endorsed thereon the Guarantees duly executed by the Guarantors, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

 

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All Securities and the Guarantees endorsed thereon issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company and the Guarantors, as applicable, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company, the Parent Guarantor and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:

(1) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

(2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security, or (C) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 301.

(3) Subject to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.

 

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(4) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

(b) Certain Transfers and Exchanges . Notwithstanding any other provision of this Indenture or the Securities, transfers and exchanges of Securities and beneficial interests in a Global Security of the kinds specified in this Section 305(b) shall be made only in accordance with this Section 305(b).

(1) Transfer and Exchange of Beneficial Interests in Global Securities. The transfer and exchange of beneficial interests in Global Securities will be effected through the applicable Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Securities will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in Global Securities also will require compliance with either subparagraph (A) or (B) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(A) Transfer of Beneficial Interests in the Same Global Security . Beneficial interests in any Restricted Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Security in accordance with the transfer restrictions set forth in the applicable legends provided thereon; provided, however, that transfers of beneficial interests in the Global Security issued pursuant to Regulation S under the Securities Act may not be made to a U.S. Person or for the account or benefit of a U.S. Person prior to the expiration of the 40-day “Distribution Compliance Period” under Regulation S, unless such person is a “Distributor” as defined in Rule 902 under the Securities Act. Beneficial interests in any Unrestricted Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security. No written orders or instructions shall be required to be delivered to the Security Registrar to effect the transfers described in this Section 305(b)(1)(A).

(B) All Other Transfers and Exchanges of Beneficial Interests in Global Securities . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 305(b)(1)(A) above, the transferor of such beneficial interest must deliver to the Security Registrar both (i) a written order from a Participant or an Indirect Participant given to the applicable Depositary in accordance with the Applicable Procedures directing the applicable Depositary to credit or cause to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to

 

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be transferred or exchanged, and (ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase.

(C) Transfer of Beneficial Interests to Another Restricted Global Security. A beneficial interest in any Restricted Global Security may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Security if the transfer complies with the requirements of Section 305(a) above and the Security Registrar receives the following:

(i) if the transferee will take delivery in the form of a beneficial interest in a Global Security offered and sold pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Annex A hereto, including the certifications in item (1) thereof; and

(ii) if the transferee will take delivery in the form of a beneficial interest in a Global Security offered and sold pursuant to Regulation S under the Securities Act, then the transferor must deliver a certificate in the form of Annex A hereto, including the certifications in item (2) thereof.

(D) Transfer and Exchange of Beneficial Interests in a Restricted Global Security for Beneficial Interests in an Unrestricted Global Security. A beneficial interest in any Restricted Global Security may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Security or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security if the exchange or transfer complies with the requirements of Section 305(a) above and the Security Registrar receives the following: (i) if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Security, a certificate from such holder in the form of Annex B hereto, including the certifications in item (1)(a) thereof; or (ii) if the holder of such beneficial interest in a Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security, a certificate from such holder in the form of Annex A hereto, including the appropriate certifications in item (3) thereof; and, in each such case, if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the applicable legends provided thereon are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to clause (D) above at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of a Company Order in accordance with Section 303 hereof,

 

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the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to clause (3) above.

Beneficial interests in an Unrestricted Global Security cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Security.

(2) Transfer or Exchange of Beneficial Interests for Certificated Securities . If any one of the events listed in Section 305(a) has occurred or the Company has elected to cause the issuance of certificated Securities, transfers or exchanges of beneficial interests in a Global Security for a certificated Security shall be effected, subject to the satisfaction of the conditions set forth in the applicable subclauses of this Section 305(b)(2).

(A) Beneficial Interests in Restricted Global Securities to Restricted Certificated Securities . If any holder of a beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a Restricted Certificated Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Certificated Security, then, upon receipt by the Security Registrar of the following documentation:

(i) if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a Restricted Certificated Security, a certificate from such holder in the form of Annex B hereto, including the certifications in item (2)(a) thereof;

(ii) if such beneficial interest is being transferred to a qualified institutional buyer in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in item (1) thereof;

(iii) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in item (2) thereof;

(iv) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in item (3)(a) thereof; and

(v) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Annex A hereto, including the certifications in item (4) thereof;

 

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the Trustee shall cause the aggregate principal amount of the applicable Global Security to be reduced accordingly pursuant to Section 305(c) hereof, and the Company and the Guarantors shall execute and upon receipt of a Company Order the Trustee shall authenticate and deliver to the Person designated in the instructions a Certificated Security in the appropriate principal amount. Any Certificated Security issued in exchange for a beneficial interest in a Restricted Global Security pursuant to this Section 305(b)(2) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Security Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Certificated Securities to the Persons in whose names such Securities are so registered. Any Certificated Security issued in exchange for a beneficial interest in a Restricted Global Security pursuant to this Section 305(b)(2) shall bear the appropriate legends and shall be subject to all restrictions on transfer contained therein.

(B) Beneficial Interests in Restricted Global Securities to Unrestricted Certificated Securities . A holder of a beneficial interest in a Restricted Global Security may exchange such beneficial interest for an Unrestricted Certificated Security or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Certificated Security only if:

(i) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Annex A hereto, including the certifications in item (3)(a) thereof; or

(ii) the Security Registrar receives the following:

(a) if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for an Unrestricted Certificate Security, a certificate from such holder in the form of Annex B hereto, including the certifications in item (1)(b) thereof; or

(b) if the holder of such beneficial interest in a Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Certificated Security, a certificate from such holder in the form of Annex A hereto, including the appropriate certifications in item (3) thereof;

and, in each such case set forth in this subparagraph (ii), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form

 

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reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the appropriate legends are no longer required in order to maintain compliance with the Securities Act.

(C) Beneficial Interests in Unrestricted Global Securities to Unrestricted Certificated Securities . If any holder of a beneficial interest in an Unrestricted Global Security proposes to exchange such beneficial interest for a Certificated Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Certificated Security, then, upon satisfaction of the conditions set forth in Section 305(b)(1)(B) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Security to be reduced accordingly pursuant to Section 305(c) hereof, and the Company will execute and upon receipt of a Company Order the Trustee will authenticate and deliver to the Person designated in the instructions a Certificated Security in the appropriate principal amount. Any Certificated Security issued in exchange for a beneficial interest pursuant to this Section 305(b)(2)(C) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Security Registrar from or through the applicable Depositary and the Participant or Indirect Participant. The Trustee will deliver such Certificated Securities to the Persons in whose names such Securities are so registered. Any Certificated Security issued in exchange for a beneficial interest pursuant to this Section 305(b)(2)(C) will not bear a Restricted Security legend.

(3) Transfer and Exchange of Certificated Securities for Beneficial Interests.

(A) Restricted Certificated Securities to Beneficial Interests in Restricted Global Securities . If any Holder of a Restricted Certificated Security proposes to exchange such Security for a beneficial interest in a Restricted Global Security or to transfer such Restricted Certificated Security to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Security, then, upon receipt by the Security Registrar of the following documentation:

(i) if the Holder of such Restricted Certificated Security proposes to exchange such Security for a beneficial interest in a Restricted Global Security, a certificate from such Holder in the form of Annex B hereto, including the certifications in item (2)(b) thereof;

(ii) if such Restricted Certificated Security is being transferred to a qualified institutional buyer in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in item (1) thereof;

 

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(iii) if such Restricted Certificated Security is being transferred to a non-U.S. Person (as defined in Regulation S) in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Annex A hereto, including the certifications in item (2) thereof; and

(iv) if such Restricted Certificated Security is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Annex A hereto, including the certifications in item (4) thereof;

the Trustee will cancel the Restricted Certificated Security, increase or cause to be increased the aggregate principal amount of, in the case of clause (i) above, the appropriate Restricted Global Security, in the case of clause (ii) above, the Global Security offered and sold pursuant to Rule 144A under the Securities Act, and in the case of clause (iii) above, the Global Security offered and sold pursuant to Regulation S under the Securities Act.

(B) Restricted Certificated Securities to Beneficial Interests in Unrestricted Global Securities . A Holder of a Restricted Global Security may exchange such Security for a beneficial interest in an Unrestricted Global Security or transfer such Restricted Global Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security only if:

(i) if such Restricted Certificated Security is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Annex A hereto, including the certifications in item (3)(a) thereof; or

(ii) the Security Registrar receives: (A) if the Holder of such Restricted Certificated Security proposes to exchange such Restricted Certificated Security for a beneficial interest in the Unrestricted Global Security, a certificate from such Holder in the form of Annex B hereto, including the certifications in item (1)(c) thereof, or (B) if the Holder of such Restricted Certificated Security proposes to transfer such Restricted Certificated Security to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Security, a certificate from such Holder in the form of Annex A hereto, including the appropriate certifications in item (3) thereof, and, in each such case, if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the applicable legends are no longer required in order to maintain compliance with the Securities Act.

 

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Upon satisfaction of the conditions of any of the subparagraphs in this Section 305(b)(3)(B), the Trustee will cancel the Certificated Security and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Security.

(C) Unrestricted Certificated Securities to Beneficial Interests in Unrestricted Global Securities . A Holder of an Unrestricted Certificated Security may exchange such Security for a beneficial interest in an Unrestricted Global Security or transfer such Unrestricted Certificated Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Certificated Security and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Securities.

If any such exchange or transfer from a Certificated Security to a beneficial interest is effected pursuant to subparagraphs (c) above at a time when an Unrestricted Global Security has not yet been issued, the Company will issue and, upon receipt of a Company Order, the Trustee will authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of Certificated Securities so transferred.

(4) Transfer and Exchange of Certificated Securities for Certificated Securities . Upon request by a Holder of Certificated Securities and such Holder’s compliance with the provisions of this Section 305(b)(4), the Security Registrar will register the transfer or exchange of Certificated Securities. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Security Registrar the Certificated Securities duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Security Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 305(b)(4).

(A) Restricted Certificated Securities to Restricted Certificated Securities . Any Restricted Certificated Security may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Certificated Security if the Security Registrar receives the following:

(i) if the transfer will be made pursuant to Rule 144A under the Securities Act, a certificate in the form of Annex A hereto, including the certifications in item (1) thereof;

(ii) if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, a certificate in the form of Annex A hereto, including the certifications in item (2) thereof; and

 

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(iii) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, a certificate in the form of Annex A hereto, including the certifications required by item (3) thereof.

(B) Restricted Certificated Securities to Unrestricted Certificated Securities . Any Restricted Certificated Security may be exchanged by the Holder thereof for an Unrestricted Certificated Security or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Certificated Security if the Security Registrar receives: (i) if the Holder of such Restricted Certificated Security proposes to exchange such Security for an Unrestricted Certificated Security, a certificate from such Holder in the form of Annex B hereto, including the certifications in item (1)(d) thereof; or (ii) if the Holder of such Restricted Certificated Security proposes to transfer such Security to a Person who shall take delivery thereof in the form of an Unrestricted Certificated Security, a certificate from such Holder in the form of Annex A hereto, including the appropriate certifications in item (3) thereof; and, in each such case, if the Security Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Security Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the appropriate legends are no longer required in order to maintain compliance with the Securities Act.

(C) Unrestricted Certificated Securities to Unrestricted Certificated Securities . A Holder of Unrestricted Certificated Securities may transfer such Securities to a Person who takes delivery thereof in the form of an Unrestricted Certificated Security. Upon receipt of a request to register such a transfer, the Security Registrar shall register the Unrestricted Certificated Securities pursuant to the instructions from the Holder thereof.

(c) Cancellation and/or Adjustment of Global Securities . At such time as all beneficial interests in a particular Global Security have been exchanged for Certificated Securities or a particular Certificated Security has been redeemed, repurchased or canceled in whole and not in part, each such Global Security will be returned to or retained and canceled by the Trustee in accordance with Section 311 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Certificated Securities, the principal amount of Securities represented by such Global Security will be reduced accordingly and an endorsement will be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security will be increased accordingly and an endorsement will be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(d) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer or exchange imposed under this

 

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Indenture or under applicable law with respect to any transfer or exchange of any interest in any Security (including any transfers between or among Participants or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them, the Guarantors and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company and the Guarantors, respectively, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

 

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Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

SECTION 308. Persons Deemed Owners.

Prior to due presentment of a Security for registration of transfer, the Company, the Parent Guarantor, the Trustee and any agent of the Company, the Guarantors or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and

 

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(subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Guarantors, the Trustee nor any agent of the Company, the Guarantors or the Trustee shall be affected by notice to the contrary.

No holder of any beneficial interest in any Global Security held on its behalf by a Depositary shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be treated by the Company, the Parent Guarantor, the Trustee and any agent of the Company, the Guarantors or the Trustee as the owner of such Global Security for all purposes whatsoever. None of the Company, the Guarantors, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

SECTION 309. Cancellation.

All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. The Trustee shall dispose of all cancelled Securities in accordance with its customary procedures.

SECTION 310. Computation of Interest.

Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

ARTICLE FOUR

S ATISFACTION AND D ISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

(1) either

(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and

 

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which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company or a Guarantor and thereafter repaid to the Company or that Guarantor or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

(B) all such Securities not theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity within one year, or

(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company or a Guarantor, as the case may be, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

(2) the Company or a Guarantor, as the case may be, has paid or caused to be paid all other sums payable hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company and the Guarantors to the Trustee under Section 607 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and Guarantees and this Indenture, to the payment, either directly or through any Guarantor (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.

 

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ARTICLE FIVE

R EMEDIES

SECTION 501. Events of Default.

“Event of Default”, wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or

(2) default in the payment of the principal of or any premium on any Security of that series at its Maturity; provided that to the extent any such failure to pay principal or premium is caused by a technical or administrative error, delay in processing payments or event beyond the control of the Company or a Guarantor, no Event of Default shall occur for three days following such failure to pay; provided further that in the case of any redemption payment, no Event of Default shall occur for 30 days following a failure to make such payment; or

(3) default in the performance or observance of any other material obligation of the Company or a Guarantor under any Security or Guarantee endorsed thereon, including any material covenant or warranty in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Parent Guarantor by the Trustee or to the Company, the Parent Guarantor and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

(4) a default with respect to any obligation for the payment or repayment under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company or a Guarantor having an aggregate principal amount outstanding of at least €100,000,000 (or its equivalent in any other currency) that shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled within 30 days; or

 

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(5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of the Parent Guarantor in an involuntary case or proceeding under the applicable laws of their respective jurisdictions of organization or incorporation relating to bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of the Parent Guarantor as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company, the Parent Guarantor or the applicable Guarantor under the applicable laws of their respective jurisdictions of organization or incorporation, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company, the Parent Guarantor or the applicable Guarantor or of any substantial part of their property, or ordering the winding up or liquidation of their affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

(6) the commencement by the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of the Parent Guarantor of a voluntary case or proceeding under the applicable laws of their respective jurisdictions of organization or incorporation relating to bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated as bankrupt or insolvent, or the consent by the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of the Parent Guarantor to the entry of a decree or order for relief in respect of the Company, the Parent Guarantor or the applicable Guarantor, respectively, in an involuntary case or proceeding under the applicable laws of their respective jurisdictions of organization or incorporation relating to bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company, the Parent Guarantor or the applicable Guarantor, or the filing by the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of a petition or answer or consent seeking reorganization or relief under the applicable laws of their respective jurisdictions of organization or incorporation, or the consent by the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of the Parent Guarantor to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company, the Parent Guarantor or the applicable Guarantor or of any substantial part of their property, or the making by the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of the Parent Guarantor of an assignment for the benefit of creditors, or the admission by the Company, the Parent Guarantor or a Guarantor that is a Significant Subsidiary of the Parent Guarantor in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company, the Parent Guarantor or the applicable Guarantor in furtherance of any such action; or

(7) the issuance of any governmental order, decree or enactment in or by Belgium or the jurisdiction of organization of a Guarantor that is a Significant Subsidiary of the Parent Guarantor whereby the Company, Parent Guarantor or applicable Guarantor is prevented from observing and performing in full its obligations pursuant to the Securities and the Guarantees, respectively, and such situation is not cured within 90 days; or

 

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(8) a Guarantee provided by the Parent Guarantor or a Guarantor that is a Significant Subsidiary ceases to be valid and legally binding for any reason or the Parent Guarantor or a Guarantor that is a Significant Subsidiary seeks to deny or disaffirm its obligations under such Guarantee; or

(9) any other Event of Default provided with respect to Securities of that series.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default (other than an Event of Default specified in Section 501(5) or 501(6)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company and the Parent Guarantor (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. If an Event of Default specified in Section 501(5) or 501(6) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company, the Parent Guarantor and the Trustee, may rescind and annul such declaration and its consequences if

(1) the Company or the Guarantors have paid or deposited with the Trustee a sum sufficient to pay

(A) all overdue interest on all Securities of that series,

(B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and

 

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(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents, advisers and counsel;

and

(2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

The Company and the Guarantors covenant that if

(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

(2) default is made in the payment of the principal of or premium on any Security at its Maturity; provided that in case any such failure to pay principal or premium is caused by a technical or administrative error, delay in processing payments or event beyond the control of the Company or a Guarantor, such default continues for more than three days; provided, further, that, in the case of a default in making a redemption payment, such default continues for 30 days,

the Company and the Guarantors will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including compensation, expenses, disbursements and advances of the Trustee, its agents, advisers and counsel that are properly incurred.

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.

If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion, and subject to indemnity and/or security, proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual

 

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to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 504. Trustee May File Proofs of Claim.

In case of any judicial proceeding relative to the Company, any Guarantor (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act and local law in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the compensation, expenses, disbursements and advances of the Trustee, its agents, advisers and reasonable fees and expenses of its counsel, and any other amounts due the Trustee under Section 607.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided , however , that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture, the Securities or any Guarantee may be prosecuted and enforced by the Trustee without the possession of any of the Securities or any Guarantee or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the compensation, expenses, disbursements and advances of the Trustee, its agents, advisers and reasonable fees and expenses of its counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

SECTION 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee and its agents and advisers under Section 607; and

 

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SECOND: the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively.

SECTION 507. Limitation on Suits.

No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, the Securities or any Guarantees or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;

(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee indemnity and/or security satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

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SECTION 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy, hereunder or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver.

No delay or omission by the Trustee or by any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 512. Control by Holders.

The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that

(1) such direction shall not be in conflict with any rule of law or with this Indenture and would not involve the Trustee in personal liability, and

(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

SECTION 513. Waiver of Past Defaults.

The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default

(1) in the payment of the principal of or any premium or interest on any Security of such series, or

 

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(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

SECTION 514. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Trustee or to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date).

SECTION 515. Waiver of Usury, Stay or Extension Laws.

Each of the Company and Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and Guarantors (to the extent that it may lawfully do so) hereby each expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 516. Agents to Act for Trustee.

At any time after the occurrence of an Event of Default the Trustee shall be entitled to require the Authenticating Agent, the Paying Agent or another agent acting on behalf of the Company in relation to any of the Securities to act under its direction.

 

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ARTICLE SIX

T HE T RUSTEE

SECTION 601. Certain Duties and Responsibilities.

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act and this Indenture. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability, including, for the avoidance of doubt, compensation for its services hereunder, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity and/or security against such risk or liability is not reasonably assured to it, nor shall the Trustee be required to do anything which it believes is illegal or contrary to applicable laws. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

SECTION 602. Notice to Holders of Defaults.

If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided , however , that in the case of any default of the character specified in Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

SECTION 603. Certain Rights of Trustee.

Subject to the provisions of Section 601:

(1) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

(2) any request or direction of the Company or the Parent Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or Company Order or order by the Parent Guarantor, and any resolution of the Board of Directors of the Company or the Parent Guarantor shall be sufficiently evidenced by a Board Resolution of the Company or the Parent Guarantor;

(3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, exclusively rely upon an Officer’s Certificate;

(4) the Trustee may consult with counsel and other advisers of its own selection and the advice of such counsel or other advisers or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

 

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(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by, or pursuant to, this Indenture at the request or direction of any of the Holders pursuant to this Indenture or otherwise take any action, unless such Holders shall have offered to the Trustee security and/or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction or the taking of such action;

(6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion acting reasonably, may make such further inquiry or investigation into such facts or matters as it may see fit at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation except for liability resulting from the Trustee’s gross negligence, bad faith or willful misconduct, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney, at the sole cost of the Company;

(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(8) in no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of business, goodwill, opportunity or profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

(9) the Trustee shall not be deemed to have notice of any Event of Default unless an officer of the Trustee responsible for the administration of this Indenture has actual knowledge thereof or unless written notice of any event which is in fact such an Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the relevant Securities and this Indenture;

(10) whether or not expressly provided in any other provision hereof, the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified and all rights provided under Sections 601 and this Section 603, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder, and shall survive the earlier of any removal or resignation, or the termination of this Indenture;

 

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(11) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with an Act of the Holders hereunder, and, to the extent not so provided herein, with respect to any Act requiring the Trustee to exercise its own discretion, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture or any Notes, unless it shall be proved that, in connection with any such action taken, suffered or omitted or any such act, the Trustee was grossly negligent, acted in bad faith or engaged in willful misconduct;

(12) the permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by except in case of gross negligence, bad faith or willful default or misconduct;

(13) the Trustee shall not be required to give any bond or surety with respect to the performance of its duties or the exercise of its powers under this Indenture;

(14) in the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more Holders or groups of Holders, each representing less than a majority in aggregate principal amount of the Securities of a series then outstanding, each pursuant to the provisions of this Indenture, the Trustee, in its sole discretion, may, but shall not be obligated to, determine what action, if any, shall be taken and the Trustee shall suffer no liability from so determining or not determining what action, if any, shall be taken, as the case may be, or otherwise from failing to act;

(15) except as provided herein, the Trustee shall have no duty to inquire as to the performance of the covenants of the Company, the Parent Guarantor, or any other entity and the Trustee shall be entitled to assume without inquiry that the Company, the Parent Guarantor, and any other Guarantor have each performed in accordance with all of the provisions of the Indenture, unless notified to the contrary;

(16) in no event shall the Trustee be liable for any failure or delay in the performance of its obligations hereunder arising out of, or caused by, directly or indirectly, forces or circumstances beyond the Trustee’s control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), civil or military disturbances, terrorism, fire, riot, embargo, strikes, work stoppages, accidents, nuclear or natural catastrophes, government action (including any laws, ordinances or regulations) or interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services, which delay, restrict or prohibit the providing of any services or the taking of any action contemplated by this Indenture;

(17) the Trustee will not be liable to any person if prevented or delayed in performing any of its obligations or discretionary functions under this Indenture by reason of any present or future law applicable to it, by any governmental or regulatory authority or by any circumstances beyond its control; and

 

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(18) the Trustee may request that the Company deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any person as so authorized in any such certificate previously delivered and not superseded.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities and the Guarantees, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company and the Guarantors, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or the Guarantees. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

SECTION 605. May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Trustee, the Company or the Guarantors, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company or the Guarantors with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

SECTION 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

SECTION 607. Compensation and Reimbursement.

Each of the Company and the Parent Guarantor agrees

(1) to pay to the Trustee from time to time compensation for all services rendered by it hereunder, including, if applicable, additional compensation in the event of a default or Event of Default (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all expenses, disbursements and advances properly incurred or made by the Trustee in accordance with any provision of this Indenture or arising out of, or in connection with, the acceptance or administration of the trust or trusts hereunder (including the compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined to have been caused by its willful misconduct, gross negligence or bad faith; and

 

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(3) to indemnify the Trustee, its officers, directors, employees, representatives and agents for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

The Trustee shall have a lien prior to the Securities as to all property and funds held or collected by it hereunder for any amount owing it or any predecessor Trustee pursuant to this Section 607, except with respect to funds held in trust for the benefit of the Holders of particular Securities.

Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services after the occurrence of an Event of Default specified in Section 501(5) or (6), the expenses (including the reasonable charges and expenses of its counsel, agents and advisers) and the compensation for the services are intended to constitute expenses of administration under any applicable bankruptcy, insolvency or other similar law.

The provisions of this Section shall survive the termination of this Indenture and the resignation or removal of the Trustee and shall apply with equal force and effect to any agent under this Indenture.

SECTION 608. Conflicting Interests.

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series.

SECTION 609. Corporate Trustee Required; Eligibility.

There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

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SECTION 610. Resignation and Removal; Appointment of Successor.

No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

The Trustee may resign at any time, without giving explanation as to such resignation, with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company and the Parent Guarantor.

If at any time:

(1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company and the Parent Guarantor or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company and the Parent Guarantor or by any such Holder, or

(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company and the Parent Guarantor by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company and the Parent Guarantor, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor

 

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Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company, the Parent Guarantor and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company and the Parent Guarantor. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company and the Parent Guarantor or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

In no event shall any retiring Trustee be held liable for any acts or omissions of any successor Trustee hereunder.

SECTION 611. Acceptance of Appointment by Successor.

In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and the Parent Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company, the Parent Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Parent Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee; and (3) shall add to or change any of the provisions of this Indenture

 

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as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company, the Parent Guarantor, or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

Upon request of any such successor Trustee, the Company and the Parent Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

SECTION 612. Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

SECTION 613. Preferential Collection of Claims Against Company or the Guarantors.

If and when the Trustee shall be or become a creditor of the Company or a Guarantor (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company or the Guarantor (or any such other obligor).

SECTION 614. Appointment of Authenticating Agent.

The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and

 

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Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and the Parent Guarantor and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company and the Parent Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company and the Parent Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

 

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If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

 

  ,
As Trustee
By  

 

  ,
As Authenticating Agent  
By  

 

 
Authorized Officer  

ARTICLE SEVEN

H OLDERS ’ L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY

SECTION 701. Company and the Parent Guarantor to Furnish Trustee Names and Addresses of Holders.

The Company and the Parent Guarantor will furnish or cause to be furnished to the Trustee

(1) semi-annually, not later than June 30 and December 30 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of the preceding June 15 or December 15, as the case may be, and

(2) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company or the Parent Guarantor of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

SECTION 702. Preservation of Information; Communications to Holders.

The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

Every Holder of Securities, by receiving and holding the same, agrees with the Company, the Guarantors and the Trustee that neither the Company, the Guarantors nor the Trustee nor any agent of any of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

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SECTION 703. Reports by Trustee.

The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted within 60 days after (i) the first anniversary of the first date of issuance of Securities hereunder and (ii) each anniversary of such date.

A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company and the Parent Guarantor. The Company or the Parent Guarantor will notify the Trustee when any Securities are listed on any stock exchange.

SECTION 704. Reports by the Parent Guarantor.

The Parent Guarantor will file with the Trustee, within 15 days after it files the same with the Commission, copies of the annual reports and of the information, documents and other reports that, if it is subject to the reporting requirements of either Section 13 or 15(d) of the Exchange Act, it files with the Commission pursuant to Section 13 or Section 15(d). If the Parent Guarantor is not required to file with the Commission information, documents or reports pursuant to either of those sections of the Exchange Act, then it will file with the Trustee and the Commission such reports, if any, as may be prescribed by the Commission pursuant to the Trust Indenture Act at such time, in each case within 15 days after it files the same with the Commission.

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s or any Guarantor’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

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ARTICLE EIGHT

C ONSOLIDATION , M ERGER , C ONVEYANCE , T RANSFER OR L EASE

SECTION 801. Company and a Guarantor May Consolidate, Etc., Only on Certain Terms.

Either the Company or the Guarantors may, without the consent of the Holders, consolidate with, or merge into, or sell, transfer, lease or convey all or substantially all of their respective assets to, any corporation and the Company may at any time substitute for the Company either a Guarantor or any Affiliate of a Guarantor as principal debtor under the Securities (a “Substitute Company”); provided that:

(1) in the case that a Guarantor or the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which such Guarantor or the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of such Guarantor or the Company substantially as an entirety shall by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, (i) in the case of a Guarantor, expressly guarantee, or (ii) in the case of the Company, expressly assume the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the applicable Guarantor or the Company, as the case may be, to be performed or observed;

(2) the Company is not in default of any payments due under the Securities and immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing;

(3) the Person formed by such consolidation or into which a Guarantor or the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of a Guarantor or the Company substantially as an entirety shall be organized under the laws of a member country of the Organization for Economic Co-Operation and Development;

(4) in the case of a Substitute Company:

(i) the obligations of the Substitute Company arising under or in connection with the Securities and the Indenture are jointly and severally, irrevocably, fully and unconditionally guaranteed by the Guarantors on the same terms as existed immediately prior to such substitution under the Guarantees given by such Guarantors;

(ii) the Parent Guarantor, the Company and the Substitute Company jointly and severally indemnify each Holder for any income tax or other tax (if any) recognized by such Holder solely as a result of the substitution of the Substitute Company (and not as a result of any transfer by such holder);

(iii) each stock exchange on which the Securities are listed shall have confirmed that, following the proposed substitution, such Securities will continue to be listed on such stock exchange; and

(iv) each rating agency that rates the Securities shall have confirmed that, following the proposed substitution of the Substitute Company, such Securities will continue to have the same or better rating as immediately prior to such substitution;

 

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(5) written notice of such transaction shall be promptly provided to the Holders.

SECTION 802. Successor Substituted.

Upon any consolidation of a Guarantor or the Company, as the case may be, with, or merger of such Guarantor or the Company, as the case may be, into, any other Person or any conveyance, transfer or lease of the properties and assets of such Guarantor or the Company, as the case may be, substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which such Guarantor or the Company, as the case may be, is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, such Guarantor or the Company, as the case may be, under this Indenture with the same effect as if such successor Person had been named as such Guarantor or the Company, as the case may be, herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE NINE

S UPPLEMENTAL I NDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders, the Company, the Parent Guarantor and the Guarantors party hereto from time to time, when authorized by their respective boards of directors or other governing bodies, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1) to evidence the succession of another Person to the Company or a Guarantor, or successive successions, and the assumption by any such successor of the covenants of the Company or such Guarantor herein and in the Securities; or

(2) to add any Subsidiary of the Parent Guarantor as a Guarantor with respect to any series of Securities, subject to applicable regulatory or contractual limitations relating to such Subsidiary’s Guarantee; or

(3) to add to the covenants of the Company or the Guarantors for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company or the Guarantors; or

(4) to modify the restrictions on and procedures for resale and the transfers of the Securities pursuant to law, regulation or practice relating to the resale or transfer of restricted securities generally; or

 

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(5) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or

(6) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or

(7) to convey, transfer, assign, mortgage or pledge any property or assets to the Trustee or another person as security for the Securities; or

(8) to provide for the issues of Securities in exchange for one or more series of outstanding Securities; or

(9) to provide for the issuance and terms of any particular series of Securities or Guarantees as permitted by Sections 201, 206, 301 and 312, the rights and obligations of the Guarantors and the Holders of the Securities of such series, the form or forms of the Securities of such series and such other matters in connection therewith as the Company and the Guarantors shall consider appropriate, including, without limitation, provisions for (a) additional or different covenants, restrictions or conditions applicable to such series, (b) additional or different events of default in respect of such series, (c) a longer or shorter period of grace and/or notice in respect of any provision applicable to such series than is otherwise provided, (d) immediate enforcement of any event of default in respect of such series, or (e) limitations upon the remedies available in respect of any events of default in respect of such series or upon the rights of the holders of securities of such series to waive any such event of default; or

(10) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or

(11) to cure any ambiguity, to correct or supplement any provision herein or in the Securities or Guarantees or in any supplemental agreement, which may be defective or inconsistent with any other provision herein or therein or any supplemental agreement, to eliminate any conflict between the terms hereof and the Trust Indenture Act or to make any other provisions with respect to matters or questions arising under this Indenture or any supplemental agreement as the Company may deem necessary or desirable, provided that in either case such action pursuant to this Clause (11) shall not adversely affect the interests of the Holders of Securities of any series to which such provisions relate in any material respect; or

 

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(12) to “reopen” any series of Securities and to create and issue additional Securities of the same series having identical terms and conditions as any series already issued (or in all respects except for the issue date, issue price and, if applicable, initial interest accrual date and first Interest Payment Date), any such additional Securities to be consolidated and form a single series with the outstanding Securities of such series; or

(13) to provide for the release and termination of any Guarantee by any Subsidiary as provided herein;

(14) to provide for any amendment, modification or alteration of the Guarantees or the limitations applicable thereto, in accordance with Section 209; or

(15) to make any other change that does not materially adversely affect the interests of the Holders of the series of Securities affected thereby.

SECTION 902. Supplemental Indentures With Consent of Holders.

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities (irrespective of series) affected by such supplemental indenture, by Act of said Holders delivered to the Company, the Parent Guarantor and the Trustee, the Company, when authorized by a Board Resolution, the Parent Guarantor, the Subsidiary Guarantors party hereto from time to time and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided , however , that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

(1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change the coin or currency in which any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or change the Company’s or a Guarantor’s obligation to pay Additional Amounts, or change in any manner adverse to the interests of the Holders the terms and provisions of the Guarantees in respect of the due and punctual payment of principal amount of the Securities then Outstanding plus accrued and unpaid interest (and all Additional Amounts, if any);

(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture.

 

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A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Any amendment, modification or alteration authorized pursuant to Section 901 shall not be subject to this Section 902.

SECTION 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel and an Officer’s Certificate, each stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

SECTION 906. Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

 

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ARTICLE TEN

C OVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.

SECTION 1002. Maintenance of Office or Agency.

The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided , however , that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

SECTION 1003. Money for Securities Payments to Be Held in Trust.

If the Company or a Guarantor shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, before 10:00 am (London time) at least one Business Day prior to each due date of the principal of or any premium or interest or any other amounts on any Securities of that series, deposit with a Paying Agent a sum in immediately available funds sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. No Paying Agent shall be obligated to make any payment with respect to the Securities unless and until such funds have been so deposited.

The Company will cause each Paying Agent for any series of Securities, other than the Trustee, to execute and deliver to the Trustee an instrument in which such

 

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Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent; (2) give the Trustee notice of any default by the Company or any Guarantor (or any other obligor upon the Securities) in the making of any payment of principal, premium, if any, any Additional Amounts or interest on the Securities; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent for payment in respect of that series of Securities.

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust, and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided , however , that the Trustee or such Paying Agent, before being required to make any such repayment may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

SECTION 1004. Statement by Officers as to Default.

The Company will deliver to the Trustee, within 90 days after the end of each fiscal year of the Company ending after the date hereof, an Officer’s Certificate, complying with Section 314(a)(4) of the Trust Indenture Act, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

SECTION 1005. Existence.

Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided , however , that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders.

 

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SECTION 1006. Limitation on Liens.

So long as any of the Securities remains outstanding, the Parent Guarantor will not, nor will it permit any Restricted Subsidiary to, create, assume, guarantee or suffer to exist any Encumbrance on any of its Principal Plants or on any capital stock of any Restricted Subsidiary without effectively providing that the Securities shall be secured by the security for such secured indebtedness equally and ratably therewith, provided , however , the above limitation does not apply to:

 

  (a) purchase money liens, so long as such liens attach only to the assets so acquired and improvements thereon;

 

  (b) Encumbrances existing at the time of acquisition of property (including through merger or consolidation) or securing indebtedness the proceeds of which are used to pay or reimburse the Parent Guarantor or a Restricted Subsidiary for the cost of such property (provided such indebtedness is incurred within 180 days after such acquisition);

 

  (c) Encumbrances on property of a Restricted Subsidiary existing at the time it becomes a Restricted Subsidiary;

 

  (d) Encumbrances to secure the cost of development or construction of property, or improvements thereon, provided that the recourse of the creditors in respect of such indebtedness is limited to such property and improvements;

 

  (e) Encumbrances in connection with the acquisition or construction of Principal Plants or additions thereto financed by tax-exempt securities;

 

  (f) Encumbrances securing indebtedness owing to the Parent Guarantor or a Restricted Subsidiary by a Restricted Subsidiary;

 

  (g) Encumbrances existing at the date of the Indenture;

 

  (h) Encumbrances required in connection with state or local governmental programs which provide financial or tax benefits, provided the obligations secured are in lieu of or reduce an obligation that would have been secured by an Encumbrance permitted under the Indenture;

 

  (i) any Encumbrance arising by operation of law and not securing amounts more than ninety (90) days overdue or otherwise being contested in good faith;

 

  (j) judgment Encumbrances not giving rise to an Event of Default;

 

  (k)

any Encumbrance incurred or deposits made in the ordinary course of business, including, but not limited to, (i) any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other like

 

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Encumbrances, (ii) any Encumbrances securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security, and (iii) any easements, rights-of-way, restrictions and other similar charges;

 

  (l) any Encumbrance upon specific items of inventory or other goods and proceeds of the Parent Guarantor or any Restricted Subsidiary securing the Parent Guarantor’s or any such Restricted Subsidiary’s obligations in respect of bankers’ acceptances issued or created for the account of such person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

  (m) any Encumbrance incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of like nature incurred in the ordinary course of business;

 

  (n) any Encumbrance on any Principal Plant of the Parent Guarantor or any Restricted Subsidiary in favor of the Federal Government of the United States or the government of any State thereof, or the government of the United Kingdom, or any state in the European Union, or any instrumentality of any of them, securing the obligations of the Parent Guarantor or any Restricted Subsidiary pursuant to any contract or payments owed to such entity pursuant to applicable laws, rules, regulations or statutes;

 

  (o) any Encumbrance securing taxes or assessments or other applicable governmental charges or levies;

 

  (p) extensions, renewals or replacements of the Encumbrances referred to in clauses (a) through (o), provided that the amount of indebtedness secured by such extension, renewal or replacement shall not exceed the principal amount of indebtedness being extended, renewed or replaced, together with the amount of any premiums, fees, costs and expenses associated with such extension, renewal or replacement, nor shall the pledge, mortgage or lien be extended to any additional Principal Plant unless otherwise permitted under this covenant;

 

  (q) as permitted under the provisions described in the following two paragraphs herein; and

 

  (r) in connection with sale-leaseback transactions permitted under the Indenture.

Notwithstanding the provisions described in the immediately preceding paragraph, the Parent Guarantor or any Restricted Subsidiary may, without rateably securing the Securities, create, assume, guarantee or suffer to exist any indebtedness which would otherwise be subject to such restrictions, and renew, extend or replace such indebtedness, provided that the aggregate amount of such indebtedness, when added to the fair market value of property transferred in sale-leaseback transactions as described in Section 1011 (computed without duplication of amount) does not at the time exceed 15% of Net-Tangible Assets.

 

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If the Parent Guarantor or any Restricted Subsidiary merges or consolidates with, or purchases all or substantially all of the assets of, another corporation, or the Parent Guarantor sells all or substantially all of its assets to another corporation, and if such other corporation has outstanding obligations secured by an Encumbrance which, by reason of an after-acquired property clause or similar provision, would extend to any Principal Plant owned by the Parent Guarantor or such Restricted Subsidiary immediately prior thereto, the Parent Guarantor or such Restricted Subsidiary, as the case may be, will in such event be deemed to have created an Encumbrance, within the prohibition of the covenant described above, unless (a) such merger or consolidation involving a Restricted Subsidiary constitutes a disposition by the Parent Guarantor of its interest in the Restricted Subsidiary or (b) (i) at or prior to the effective date of such merger, consolidation, sale or purchase such Encumbrance shall be released of record or otherwise satisfied to the extent it would extend to such Principal Plant, (ii) prior thereto, the Parent Guarantor or such Restricted Subsidiary shall have created, as security for the Securities (and, if the Parent Guarantor shall so determine, as security for any other indebtedness of the Parent Guarantor then existing or thereafter created ranking equally with the Securities and any other indebtedness of such Restricted Subsidiary then existing or thereafter created), a valid Encumbrance which will rank equally and ratably with the Encumbrances of such other corporation on such Principal Plant of the Parent Guarantor or such Restricted Subsidiary, as the case may be, or (iii) such Encumbrance is otherwise permitted or complies with the Covenant described above.

SECTION 1007. Sale-Leaseback Transactions.

(a) Except to the extent permitted under paragraph (c) below, and except for any transaction involving a lease for a temporary period, not to exceed three years, by the end of which it is intended that the use of the leased property by the Parent Guarantor or any Restricted Subsidiary will be discontinued and except for any transaction with a state or local authority that is required in connection with any program, law, statute or regulation that provides financial or tax benefits not available without such transaction, the Parent Guarantor shall not sell any Principal Plant as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property and the Parent Guarantor will not permit any Restricted Subsidiary to sell to anyone other than the Parent Guarantor or a Restricted Subsidiary any Principal Plant as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property unless:

(i) the net proceeds of such sale (including any purchase money mortgages received in connection with such sale) are at least equal to the fair market value (as determined by an officer of the Parent Guarantor) of such property and

(ii) subject to paragraph (d) below, the Parent Guarantor shall, within 120 days after the transfer of title to such property (or, if the Parent Guarantor holds the net proceeds described below in cash or cash equivalents, within two years)

 

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(A) purchase, and surrender to the Trustee for retirement as provided in this covenant, a principal amount of Securities equal to the net proceeds derived from such sale (including the amount of any such purchase money mortgages), or

(B) repay other pari passu indebtedness of the Parent Guarantor or any Restricted Subsidiary in an amount equal to such net proceeds, or

(C) expend an amount equal to such net proceeds for the expansion, construction or acquisition of a Principal Plant, or

(D) effect a combination of such purchases, repayments and plant expenditures in an amount equal to such net proceeds.

(b) At or prior to the date 120 days after a transfer of title to a Principal Plant which shall be subject to the requirements of this covenant, the Parent Guarantor shall furnish to the Trustee:

(i) an Officer’s Certificate stating that paragraph (a) of this covenant has been complied with and setting forth in detail the manner of such compliance, which certificate shall contain information as to

(A) the amount of Securities theretofore redeemed and the amount of Securities theretofore purchased by the Parent Guarantor and cancelled by the Trustee and the amount of Securities purchased by the Parent Guarantor and then being surrendered to the Trustee for cancellation,

(B) the amount thereof previously credited under paragraph (d) below,

(C) the amount thereof which it then elects to have credited on its obligation under paragraph (d) below, and

(D) any amount of other indebtedness which the Parent Guarantor has repaid or will repay and of the expenditures which the Parent Guarantor has made or will make in compliance with its obligation under paragraph (a), and

(ii) if applicable, a deposit with the Trustee for cancellation of the Securities then being surrendered as set forth in such certificate.

(c) Notwithstanding the restriction of paragraph (a), the Parent Guarantor and any one or more Restricted Subsidiaries may transfer property in sale-leaseback transactions which would otherwise be subject to such restriction if the aggregate principal amount of the fair market value of the property so transferred and not reacquired at such time, when added to the aggregate amount of indebtedness for borrowed money permitted by the last paragraph of the covenant described under “—Limitation on Liens” which shall be outstanding at the time (computed without duplication of the value of property transferred as provided in this paragraph (c)), does not at the time exceed 15% of Net Tangible Assets.

 

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(d) The Parent Guarantor, at its option, shall be entitled to a credit, in respect of its obligation to purchase and retire Securities under this covenant, for the principal amount of any Securities deposited with the Trustee for the purpose and also for the principal amount of (i) any Securities theretofore redeemed at the option of the Parent Guarantor and (ii) any Securities previously purchased by the Parent Guarantor and cancelled by the Trustee, and in each case not theretofore applied as a credit under this paragraph (d) or as part of a sinking fund arrangement for the Securities.

(e) For purposes of this covenant, the amount or the principal amount of Securities which are issued with original issue discount shall be the principal amount of such Securities that on the date of the purchase or redemption of such Securities referred to in this covenant could be declared to be due and payable pursuant to the Indenture.

SECTION 1008. Waiver of Certain Covenants .

Except as otherwise specified as contemplated by Section 301 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 301(18), 901(3), 901(9), 1006 or 1007 for the benefit of the Holders of such series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

SECTION 1009. Additional Amounts .

Unless otherwise specified in any Board Resolution of the Company or the relevant Guarantor establishing the terms of Securities of a series or the Guarantees relating thereto in accordance with Section 301, in the event that a Guarantor becomes obligated under this Indenture to make payments in respect of the Securities, such Guarantor will make all payments in respect of the Securities without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax (the “Relevant Taxing Jurisdiction”) unless such withholding or deduction is required by law. In such event, such Guarantor will pay to the Holders such additional amounts (the “Additional Amounts”) as shall be necessary in order that the net amounts received by the Holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:

 

  (a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by the Guarantor from payment of principal or interest made by it; or

 

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  (b) are payable by reason of the Holder or beneficial owner having, or having had, some personal or business connection with such Relevant Taxing Jurisdiction and not merely by reason of the fact that payments in respect of the Securities or the Guarantees are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in the Relevant Taxing Jurisdiction; or

 

  (c) are imposed or withheld by reason of the failure of the Holder or beneficial owner to provide certification, information, documents or other evidence concerning the nationality, residence, or identity of the Holder and beneficial owner or to make any valid or timely declaration or similar claim or satisfy any other reporting requirements relating to such matters, whether required or imposed by statute, treaty, regulation or administrative practice, as a precondition to exemption from, or a reduction in the rate of withholding or deduction of such taxes; or

 

  (d) consist of any estate, inheritance, gift, sales, excise, transfer, personal property or similar taxes, or

 

  (e) are imposed on or with respect to any payment by the applicable Guarantor to the registered Holder if such Holder is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent that taxes would not have been imposed on such payment had such registered Holder been the sole beneficial owner of such Security; or

 

  (f) are deducted or withheld pursuant to (i) any European Union directive or regulation concerning the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Relevant Taxing Jurisdiction or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such directive, regulation, treaty or understanding; or

 

  (g) are payable by reason of a change in law or practice that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and written notice thereof is provided to the Holders, whichever occurs later; or

 

  (h) are payable because any Security was presented to a particular paying agent for payment if the Security could have been presented to another paying agent without any such withholding or deduction; or

 

  (i) are payable for any combination of (a) through (h) above.

 

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Such payment of Additional Amounts may be subject to such further exceptions as may be established in the terms of such Securities established as contemplated by Section 301. Subject to the foregoing provisions, whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made, provided, however, that the covenant regarding Additional Amounts provided for in this Section shall not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States; provided further that the covenant regarding Additional Amounts provided for in this Section shall apply to the Company at any time when it is incorporated in a jurisdiction outside of the United States.

If the terms of the Securities of a series established as contemplated by Section 301 do not specify that Additional Amounts will not be payable by the Company or a Guarantor, at least 10 days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least 10 days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officer’s Certificate, the Company will furnish the Trustee and the Company’s principal Paying Agent or Paying Agents, if other than the Trustee, with an Officer’s Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officer’s Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities and the Company or Guarantor, as the case may be, will pay to the Trustee or such Paying Agent or Paying Agents the Additional Amounts required by this Section. Each of the Company and Guarantors covenant to indemnify each of the Trustee and any Paying Agent for, and to hold each of them harmless against, any loss, liability or expense arising out of or in connection with actions taken or omitted by any of them in reliance on any Officer’s Certificate furnished pursuant to this Section, except to the extent that any such loss, liability or expense is due to its own negligence or bad faith.

SECTION 1010. Additional Information .

The Company agrees to furnish, at any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act or exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, in respect of any Securities sold or offered for sale pursuant to an exemption from registration under Rule 144A of the Securities Act, at its expense and upon request, to the Holders and prospective purchasers of securities information satisfying the requirements of subsection (d)(4) of Rule 144A under the Securities Act.

 

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SECTION 1011. Notice of Event of Default .

The Company hereby covenants with the Trustee that, so long as any of the Securities remain Outstanding, it will promptly give notice in writing to the Trustee upon having knowledge (and in no event later than seven days after obtaining such knowledge) of any Event of Default.

SECTION 1012. Indemnification of Judgment Currency .

To the fullest extent permitted by applicable law, the Company and each of the Guarantors shall indemnify each Holder against any loss incurred by such Holder as a result of any judgment or order being given or made for any amount due under any Security or Guarantee and such judgment or order being expressed and paid in a currency (the “Judgment Currency”), which is other than U.S. dollars and as a result of any variation as between (i) the rate of exchange at which the U.S. dollar is converted into the Judgment Currency for the purposes of such judgment or order and (ii) the spot rate of exchange in The City of New York at which the Holder on the date of payment of such judgment is able to purchase U.S. dollars with the amount of the Judgment Currency actually received by such Holder. This indemnification will constitute a separate and independent obligation of the Company or each of the Guarantors, as the case may be, and will continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “spot rate of exchange” includes any premiums and costs of exchange payable in connection with the purchase of, or conversion into, U.S. dollars.

SECTION 1013. Further Instruments and Acts

The Company and the Parent Guarantor hereby covenant with the Trustee that, so long as any of the Securities remain Outstanding, upon request of the Trustee, but without an affirmative duty on the Trustee to do so, they and any other Guarantor shall execute and deliver such further instruments and acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

ARTICLE ELEVEN

R EDEMPTION OF S ECURITIES

SECTION 1101. Applicability of Article .

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article.

SECTION 1102. Election to Redeem; Notice to Trustee .

The election of the Company or Parent Guarantor to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities. In case of any redemption at the election of the Company or Parent Guarantor of the Securities of any series in whole or in part (including any such redemption affecting only a single Security), the Company or Parent Guarantor shall, at least 60 days prior to the Redemption Date fixed by the Company or the Parent Guarantor (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such

 

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Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities (a) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, or (b) pursuant to an election of the Company which is subject to a condition specified in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction or condition.

SECTION 1103. Selection by Trustee of Securities to Be Redeemed .

If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, on a pro rata basis or by such method as the Trustee in its sole discretion shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, except that if the Securities are listed on any securities exchange, any such selection and redemption of the Securities shall be in compliance with the requirements of the principal securities exchange on which those Securities are listed and/or in compliance with the requirements of DTC as notified by the Company to the Trustee, and provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

SECTION 1104. Notice of Redemption .

Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.

 

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All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price or if not then ascertainable, the manner of calculation thereof,

(3) if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed;

(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date;

(5) the place or places where each such Security is to be surrendered for payment of the Redemption Price;

(6) applicable CUSIP numbers, if any; and

(7) that the redemption is for a sinking fund, if such is the case.

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company and shall be irrevocable.

SECTION 1105. Deposit of Redemption Price .

By 10:00 am (London time) at least one Business Day prior to any Redemption Date, the Company or the Parent Guarantor shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

SECTION 1106. Securities Payable on Redemption Date .

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided , however , that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

 

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If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

SECTION 1107. Securities Redeemed in Part .

Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor with the Guarantee or Guarantee endorsed therein, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE TWELVE

S INKING F UNDS

SECTION 1201. Applicability of Article .

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

SECTION 1202. Satisfaction of Sinking Fund Payments with Securities .

The Company or Parent Guarantor (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

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SECTION 1203. Redemption of Securities for Sinking Fund .

Not less than 45 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 1202 and the basis for such credit and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.

ARTICLE THIRTEEN

D EFEASANCE AND C OVENANT D EFEASANCE

SECTION 1301. Company’s and the Parent Guarantor’s Option to Effect Defeasance or Covenant Defeasance .

The Company or the Parent Guarantor may elect, at its option at any time, to have Section 1302 or Section 1303 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 301 as being defeasible pursuant to such Section 1302 or 1303, in accordance with any applicable requirements provided pursuant to Section 301 and upon compliance with the conditions set forth below in this Article. Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities.

SECTION 1302. Defeasance and Discharge .

Upon the Company’s or the Parent Guarantor’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, each of the Company and the Guarantors shall be deemed to have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company and the Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company or the Parent Guarantor, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, (2) the Company’s or the Guarantors’ obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article. Subject to compliance with this Article, the Company and the Parent Guarantor may

 

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exercise their option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 1303 applied to such Securities.

SECTION 1303. Covenant Defeasance .

Upon the Company’s or the Parent Guarantor’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, (1) the Company and the Guarantors shall be released from their obligations under Section 801(3), Sections 1006 through 1007, inclusive, and any covenants provided pursuant to Section 301(18), 901(3) or 901(9) for the benefit of the Holders of such Securities (2) the occurrence of any event specified in Sections 501(3) (with respect to any of Section 801(3), Sections 1006 through 1007, inclusive, and any such covenants provided pursuant to Section 301(18), 901(3) or 901(9)) and 501(4) shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company and the Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 501(3)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or Article or by reason of any reference in any such Section or Article to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

SECTION 1304. Conditions to Defeasance or Covenant Defeasance .

The following shall be the conditions to the application of Section 1302 or Section 1303 to any Securities or any series of Securities, as the case may be:

(1) The Company or the Parent Guarantor shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Maturities, in accordance with the terms of this Indenture and such Securities, provided that the Company shall specify whether such Securities are being defeased to Stated Maturity or to the Redemption Date. As used herein, “U.S. Government Obligation” means any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as

 

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an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof.

(2) In the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company or the Parent Guarantor shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company or the Parent Guarantor has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable U.S. Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for U.S. Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

(3) In the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company or the Parent Guarantor shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for U.S. Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to U.S. Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.

(4) The Company or the Parent Guarantor shall have delivered to the Trustee an Officer’s Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.

(5) The Company or the Parent Guarantor shall have delivered to the Trustee for cancellation all Securities Outstanding theretofore authenticated.

(6) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 501(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).

(7) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).

(8) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company or the Parent Guarantor is a party or by which it is bound.

 

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(9) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment Company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.

(10) The Company or the Parent Guarantor shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions .

Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 1304 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company or a Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law.

The Company and the Parent Guarantor shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company or the Parent Guarantor from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1304 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.

SECTION 1306. Reinstatement .

If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company and the Guarantors have been discharged or released pursuant to Section 1302 or 1303 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 1305 with respect to such Securities in accordance with this Article; provided , however , that if the Company or the

 

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Guarantors make any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company and the Guarantors shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

SECTION 1307. Qualifying Trustee

Any trustee appointed pursuant to Section 1304 for the purpose of holding trust funds deposited pursuant to that Section shall be appointed under an agreement in form acceptable to the Trustee and shall provide to the Trustee a certificate of such trustee, upon which certificate the Trustee shall be entitled to conclusively rely, that all conditions precedent provided for herein to the related Defeasance or Covenant Defeasance have been complied with. In no event shall the Trustee be liable for any acts or omissions of said trustee.

 

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I N W ITNESS W HEREOF , the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.

 

A NHEUSER -B USCH I N B EV W ORLDWIDE I NC .

as Company

By:  

/s/ Benoit Loore

  Name:  Benoit Loore
  Title:    VP Legal Corporate and Compliance

A NHEUSER -B USCH I N B EV NV/SA

as Parent Guarantor

By:  

/s/ Benoit Loore

 

Name:  Benoit Loore

 

Title:    VP Legal Corporate and Compliance

T HE B ANK OF N EW Y ORK M ELLON T RUST C OMPANY , N.A.

as Trustee

By:  

/s/ Benoit Loore

 

Name:  Benoit Loore

 

Title:    VP Legal Corporate and Compliance


A NHEUSER -B USCH C OMPANIES , I NC .

As Subsidiary Guarantor

By:  

/s/ Benoit Loore

 

Name:  Benoit Loore

 

Title:    VP Legal Corporate and Compliance

I N B EV B ELGIUM SA/NV

as Subsidiary Guarantor

By:  

/s/ Erland Van Vreckham

  Name:   Erland Van Vreckham
  Title:     Legal Director, Benelux

B RAND B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696

as Subsidiary Guarantor

By:  

/s/ Benoit Loore

 

Name:  Benoit Loore

 

Title:    VP Legal Corporate and Compliance

 

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AB I N B EV F RANCE S.A.S.

as Subsidiary Guarantor

By:  

/s/ Emilie Ruyant

  Name: Emilie Ruyant
  Title:   Legal Director

I NTERBREW I NTERNATIONAL B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director
By:  

/s/ Peter Suy

  Name: Peter Suy
  Title:   Director of Finance Services

I NTERBREW C ENTRAL E UROPEAN H OLDING B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director
By:  

/s/ Lisebeth Hellemans

  Name: Lisebeth Hellemans
  Title:   Senior Legal Counsel, Corporate
Finance Governance

 

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N IMBUSPATH L IMITED

as Subsidiary Guarantor

By:  

/s/ Claude Bahoshy

  Name:  Claude Bahoshy
  Title:    Director

A M B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525

as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name:  Benoit Loore
  Title:    VP Legal Corporate and Compliance

 

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C O B REW NV/SA

as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name:   Benoit Loore
  Title:    VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis Van de Perre

  Name:  Jean-Louis Van de Perre
  Title:    VP Tax

I N B EV N EDERLAND N.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name:   Gert Boulangé
  Title:    Tax Director
By:  

/s/ Lisebeth Hellemans

  Name:  Lisebeth Hellemans
  Title:    Senior Legal Counsel, Corporate Finance Governance

 

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Annex A

F ORM O F C ERTIFICATE O F T RANSFER

Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street,

Wilmington, Delaware 19801

Anheuser-Busch InBev NV/SA

Brouwerijplein 1, 3000

Leuven, Belgium

The Bank of New York Mellon Trust Company, N.A.

911 Washington Ave, 3rd Floor

St. Louis, Missouri 63101,

USA

Re: [Title of Securities]

Reference is hereby made to the Indenture, dated as of October 16, 2009 (as supplemented to the date hereof, the “ Indenture ”), among Anheuser-Busch InBev Worldwide Inc., as issuer (the “Company”), Anheuser-Busch InBev NV/SA, as parent guarantor (the “Parent Guarantor), the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     , (the “ Transferor ”) owns and proposes to transfer the [Security][Securities] or beneficial interest in such [Security][Securities] specified in Exhibit 1 hereto, in the principal amount of $             (the “ Transfer ”), to                      (the “ Transferee ”), as further specified in Exhibit 1 hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ¨      Check if Transferee will take delivery of a beneficial interest in the Global Security or a Certificated Security Pursuant to Rule 144A . The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Certificated Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Certificated Security for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Security will be subject to the restrictions on transfer enumerated in the applicable legend printed on the Global Security and/or the Certificated Security pursuant to Rule 144A and in the Indenture and the Securities Act.

2. ¨      Check if Transferee will take delivery of a beneficial interest in the Global Security or a Certificated Security pursuant to Regulation S . The Transfer is being

 

A-1


Annex A

 

effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the 40-day “Distribution Compliance Period” under Regulation S, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than a “Distributor” as defined in Rule 902 of Regulation S) and the transferred beneficial interest will be held immediately after such Transfer through Euroclear or Clearstream. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Security will be subject to the restrictions on transfer enumerated in the applicable legend printed on the Global Security and/or the Certificated Security and in the Indenture and the Securities Act.

3. ¨      Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Security or of an Unrestricted Certificated Security .

(a) ¨      Check if Transfer is pursuant to Rule 144 . (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the applicable legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Security will no longer be subject to the restrictions on transfer enumerated in the applicable legend printed on the Restricted Global Securities, on Restricted Certificated Securities and in the Indenture.

(b) ¨      Check if Transfer is Pursuant to Regulation S . (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the applicable legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Security will no longer be subject to the restrictions on transfer enumerated in the applicable legend printed on the Restricted Global Securities, on Restricted Certificated Securities and in the Indenture.

(c) ¨      Check if Transfer is Pursuant to an Effective Registration Statement. The Transfer is being effected in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act.

 

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Annex A

 

(d) ¨      Check if Transfer is Pursuant to Other Exemption . (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the applicable legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Security will not be subject to the restrictions on transfer enumerated in the applicable legend printed on the Restricted Global Securities or Restricted Certificated Securities and in the Indenture.

4. ¨      Check if Transfer is to the Company or any of its Subsidiaries. The transfer is being effected in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Guarantors.

 

 

[Insert Name of Transferor]
By:  

 

Name:  
Title:  

 

Dated:  

 

 

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Exhibit 1

EXHIBIT 1 TO CERTIFICATE OF TRANSFER

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

 

  (a) ¨     a beneficial interest in the:

 

  (i) ¨     Global Security offered and sold pursuant to Rule 144A (CUSIP             ), or

 

  (ii) ¨     Global Security offered and sold pursuant to Regulation S (CUSIP             )

 

  (b) ¨     a Restricted Certificated Security.

2. After the Transfer the Transferee will hold:

[CHECK ONE]

 

  (a) ¨     a beneficial interest in the:

 

  (i) ¨     Global Security offered and sold pursuant to Rule 144A (CUSIP             ), or

 

  (ii) ¨     Global Security offered and sold pursuant to Regulation S (CUSIP             ), or

 

  (iii) ¨     Unrestricted Global Security (CUSIP             ); or

 

  (b) ¨     a Restricted Certificated Security; or

 

  (c) ¨     an Unrestricted Certificated Security, in accordance with the terms of the Indenture.

 

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Annex B

FORM OF CERTIFICATE OF EXCHANGE

Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street,

Wilmington, Delaware 19801

Anheuser-Busch InBev NV/SA

Brouwerijplein 1, 3000

Leuven, Belgium

The Bank of New York Mellon Trust Company, N.A.

911 Washington Ave, 3rd Floor

St. Louis, Missouri 63101,

USA

Re: [Title of Securities]

Reference is hereby made to the Indenture, dated as of October 16, 2009 (as supplemented to the date hereof, the “ Indenture ”), among Anheuser-Busch InBev Worldwide Inc., as issuer (the “Company”), Anheuser-Busch InBev NV/SA, as parent guarantor (the “Parent Guarantor), the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     , (the “ Owner ”) owns and proposes to exchange the Note[s] or beneficial interest in such Note[s] specified herein, in the principal amount of $             (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:

1. Exchange of Restricted Certificated Securities or Beneficial Interests in a Restricted Global Security for Unrestricted Certificated Securities or Beneficial Interests in an Unrestricted Global Security

(a) ¨      Check if Exchange is from beneficial interest in a Restricted Global Security to beneficial interest in an Unrestricted Global Security . In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Security for a beneficial interest in an Unrestricted Global Security in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Securities and pursuant to and in accordance with the Securities Act of 1933, as amended (the “ Securities Act ”), (iii) the restrictions on transfer contained in the Indenture and the applicable legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(b) ¨      Check if Exchange is from beneficial interest in a Restricted Global Security to Unrestricted Certificated Security . In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Security for an Unrestricted Certificated Security, the Owner hereby certifies (i) the Certificated Security is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global

 

B-1


Securities and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the applicable legend are not required in order to maintain compliance with the Securities Act and (iv) the Certificated Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(c) ¨      Check if Exchange is from Restricted Certificated Security to beneficial interest in an Unrestricted Global Security . In connection with the Owner’s Exchange of a Restricted Certificated Security for a beneficial interest in an Unrestricted Global Security, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the applicable legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(d) ¨      Check if Exchange is from Restricted Certificated Security to Unrestricted Certificated Security . In connection with the Owner’s Exchange of a Restricted Certificated Security for an Unrestricted Certificated Security, the Owner hereby certifies (i) the Unrestricted Certificated Security is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the applicable legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Certificated Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. Exchange of Restricted Certificated Notes or Beneficial Interests in Restricted Global Securities for Restricted Certificated Securities or Beneficial Interests in Restricted Global Securities

(a) ¨      Check if Exchange is from beneficial interest in a Restricted Global Security to Restricted Certificated Security. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Security for a Restricted Certificated Security with an equal principal amount, the Owner hereby certifies that the Restricted Certificated Security is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Certificated Security issued will continue to be subject to the restrictions on transfer enumerated in the applicable legend printed on the Restricted Certificated Security and in the Indenture and the Securities Act.

(b) ¨      Check if Exchange is from Restricted Certificated Security to beneficial interest in a Restricted Global Security . In connection with the Exchange of the Owner’s Restricted Certificated Security for a beneficial interest in the [CHECK ONE] ¨ Global Note offered and sold pursuant to Rule 144A, ¨ Global Note offered and sold pursuant to Regulation S, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Securities and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any

 

B-2


state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the applicable legend printed on the relevant Restricted Global Security and in the Indenture and the Securities Act.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Guarantors.

 

 

[Insert Name of Transferor]
By:  

 

Name:  
Title:  

 

Dated:  

 

 

B-3

EXHIBIT 4.2

 

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

and

ANHEUSER-BUSCH INBEV NV/SA

and

the SUBSIDIARY GUARANTORS party hereto from time to time

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

FIRST SUPPLEMENTAL INDENTURE

Dated as of October 16, 2009

 

 

To the Indenture, dated as of October 16, 2009,

among Anheuser-Busch InBev Worldwide Inc.,

Anheuser-Busch InBev NV/SA, the Subsidiary Guarantors party thereto from time to time and

The Bank of New York Mellon Trust Company, N.A., Trustee

3.000% Notes due 2012

 

 


TABLE OF CONTENTS

 

          Page

ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

   2
SECTION 1.01    Definitions    2
SECTION 1.02    Effect of Headings    6
SECTION 1.03    Separability Clause    6
SECTION 1.04    Benefits of Instrument    6

ARTICLE II 3.000% NOTES DUE 2012

   6
SECTION 2.01    Creation of Series; Establishment of Form    6
SECTION 2.02    Guarantee    7
SECTION 2.03    Interest    8
SECTION 2.04    Payment of Principal, Interest and Other Amounts    8
SECTION 2.05    Interest Rate Adjustment    8
SECTION 2.06    Optional Redemption    9
SECTION 2.07    Optional Tax Redemption    10
SECTION 2.08    Holders’ Option to Require Repayment upon a Change in Control    11
SECTION 2.09    Registration Rights Agreement    12
SECTION 2.10    Registered Exchange Offer    12

ARTICLE III MISCELLANEOUS PROVISIONS

   13
SECTION 3.01    Effectiveness    13
SECTION 3.02    Original Issue    13
SECTION 3.03    Ratification and Integral Part    13
SECTION 3.04    Priority    13
SECTION 3.05    Successors and Assigns    13
SECTION 3.06    Counterparts    14
SECTION 3.07    Guarantee Limitations    14
SECTION 3.08    The Trustee    14
SECTION 3.09    Waiver of Claims    14
SECTION 3.10    Governing Law    14
EXHIBIT A       A-1
EXHIBIT B       B-1


FIRST SUPPLEMENTAL INDENTURE, dated as of October 16, 2009 (the “ First Supplemental Indenture ”), among ANHEUSER-BUSCH INBEV WORLDWIDE INC., a corporation duly organized and existing under the laws of the State of Delaware (the “ Company ”), ANHEUSER-BUSCH INBEV NV/SA, a société anonyme duly organized and existing under the laws of the Kingdom of Belgium (the “ Parent Guarantor ”), ANHEUSER-BUSCH COMPANIES, INC., a corporation duly organized and existing under the laws of the State of Delaware, INBEV BELGIUM SA/NV, a public limited liability company organized and existing under Belgian law, BRANDBREW S.A., a public limited liability company organized and existing under Luxembourg law, COBREW NV/SA, a public limited liability company organized and existing under Belgian law, AB INBEV FRANCE S.A.S., a société par actions simplifiée organized and existing under French law, INTERBREW INTERNATIONAL B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, INTERBREW CENTRAL EUROPEAN HOLDING B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, NIMBUSPATH LIMITED, a private limited company organized and existing under English law, AMBREW S.A., a société anonyme organized and existing under Luxembourg law, INBEV NEDERLAND N.V., a limited liability company incorporated and existing under Dutch law with its corporate seat at Breda, the Netherlands (each, a “ Subsidiary Guarantor ”, and together with the Parent Guarantor, the “ Guarantors ”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”) to the Indenture, dated as of October 16, 2009, among the Company, the Guarantors and the Trustee (the “ Indenture ”).

RECITALS OF THE COMPANY AND THE GUARANTORS

WHEREAS, the Company, the Guarantors and the Trustee are parties to the Indenture, which provides for the issuance from time to time of unsecured debt securities of the Company;

WHEREAS, Section 901(9) of the Indenture permits supplements thereto without the consent of Holders of Securities to establish the form or terms of Securities of any series as permitted by Sections 201 and 301 of the Indenture;

WHEREAS, as contemplated by Section 301 of the Indenture, the Company intends to issue a new series of Securities to be known as the Company’s “3.000% Notes due 2012” (the “ Notes ”) under the Indenture;

WHEREAS, the Company and the Guarantors have taken all necessary corporate action to authorize the execution and delivery of this First Supplemental Indenture;

NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guarantors and the Trustee mutually agree as follows:

 

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ARTICLE I

Definitions and Other Provisions of General Application

SECTION 1.01 Definitions .

Except as otherwise expressly provided or unless the context otherwise requires, all terms used in this First Supplemental Indenture which are defined in the Indenture shall have the meanings ascribed to them by the Indenture. The following terms used in this First Supplemental Indenture have the following respective meanings:

Acting in concert ” means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the acquisition directly or indirectly of shares in the Parent Guarantor by any of them, either directly or indirectly, to obtain Control of the Parent Guarantor.

Additional Interest ” has the meaning set forth in the Registration Rights Agreement.

Business Day ” means any day other than a day on which commercial banks or foreign exchange markets are permitted or required to be closed in New York City, London or Brussels.

Change in Tax Law ” has the meaning set forth in Section 2.07(a)

Change of Control ” means any person or group of persons acting in concert (in each case other than Stichting Anheuser-Busch InBev or any existing direct or indirect certificate holder or certificate holders of Stichting Anheuser-Busch InBev) gaining Control of the Parent Guarantor; provided that a change of control shall not be deemed to have occurred if all or substantially all of the shareholders of the relevant person or group of persons are, or immediately prior to the event which would otherwise have constituted a change of control were, the shareholders of the Parent Guarantor with the same (or substantially the same) pro rata interests in the share capital of the relevant person or group of persons as such shareholders have, or as the case may be, had, in the share capital of the Parent Guarantor.

Change of Control Announcement ” means the public announcement by the Parent Guarantor or any actual purchaser relating to a Change of Control.

Change of Control Period ” shall commence on the date of the Change of Control Announcement, but not later than on the date of the Change of Control, and shall end 60 days after the Change of Control (which period shall be extended with respect to a rating agency so long as the rating of the Notes is under publicly announced consideration for possible downgrade by that rating agency, such period not to exceed 60 days after the public announcement of such consideration).

Company ” has the meaning set forth in the first paragraph of this First Supplemental Indenture.

 

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Comparable Treasury Issue ” means the U.S. Treasury security (not inflation-indexed) selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

Comparable Treasury Price ” means, with respect to a Redemption Date, (i) the average of five Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

Control ” in relation to any entity means either the direct or indirect ownership of more than 50 percent of the share capital or similar rights of ownership of the entity or the power to direct the management and the policies of the entity whether through the ownership of share capital, contract or otherwise.

Day Count Convention ” means that if an Interest Payment Date (other than in the case of the Stated Maturity of, or a Redemption Date for, the Notes) falls on a day that is not a Business Day, that Interest Payment Date will be postponed to the next succeeding Business Day unless that Business Day is in the next succeeding calendar month, in which case the Interest Payment Date will be the immediately preceding Business Day.

Depositary ” means The Depository Trust Company, or any successor thereto.

Early Redemption Event ” has the meaning set forth in Section 2.08(a).

Early Redemption Notice ” has the meaning set forth in Section 2.08(a)(ii).

Effective Date ” has the meaning set forth in Section 2.08(a)(i).

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Securities ” has the meaning set forth in the Registration Rights Agreement.

First Supplemental Indenture ” has the meaning set forth in the Recitals.

“Fitch” means Fitch, Inc.

Global Security ” has the meaning set forth in Section 2.01(d).

Guarantor ” has the meaning set forth in the first paragraph of this First Supplemental Indenture.

 

- 3 -


Indenture ” has the meaning set forth in the first paragraph of this First Supplemental Indenture.

Independent Investment Banker ” means Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP Paribas Securities Corp. as specified by the Company, or if all of these firms are unwilling or unable to serve in that capacity, an independent investment banking institution of national standing in the United States appointed by the Company.

Interest Payment Date ” has the meaning set forth in Section 2.03.

Letter of Transmittal ” means the letter of transmittal to be prepared by the Company and sent to all Holders of Notes for use by such Holders in connection with the Exchange Offer.

Moody’s ” means Moody’s Investors Service, Inc.

Notes ” has the meaning set forth in the Recitals.

Original Issue Date ” means the date or dates on which the Notes are issued.

Parent Guarantor ” has the meaning set forth in the first paragraph of this First Supplemental Indenture.

Ratings Downgrade ” shall occur if any two solicited credit ratings for the Parent Guarantor’s long-term unsecured debt fall below investment grade or if all three Rating Agencies (as defined below) cease to assign (other than temporarily) a credit rating to the Parent Guarantor. A credit rating below investment grade shall mean, in relation to Standard & Poor’s Rating Services, a rating of BB+ or below, in relation to Moody’s Investor Services Inc., a rating of Bal or below, in relation to Fitch, Inc. a rating of BB+ or below and, where another “nationally recognized statistical rating agency” has been designated by the Parent Guarantor, a comparable rating. A Ratings Downgrade shall not occur with respect to a particular Rating Agency in respect of a Change of Control unless the Rating Agency downgrading the Guarantor announces or publicly confirms or informs the Parent Guarantor in writing at its request that the downgrade was the result, in whole or in part, of the applicable Change of Control. If one or more Rating Agencies issues an improved credit rating for the Parent Guarantor prior to the Effective Date so that the circumstances giving rise to the Ratings Downgrade no longer apply, then the Ratings Downgrade shall be deemed not to have occurred and the Holders shall have no right to demand redemption of their Notes under Section 2.08.

Rating Agency ” means each of Standard & Poor’s Ratings Services, a Division of The McGraw Hill Companies, Inc., Fitch, Inc., or Moody’s Investors Services, Inc., their respective successors, or any other nationally recognized statistical rating agency designated by the Parent Guarantor.

Reference Treasury Dealer ” means (i) Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP

 

- 4 -


Paribas Securities Corp. and their respective successors, provided , however , that if any of the foregoing shall cease to be a primary U.S. government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer and (ii) any three other Primary Treasury Dealers selected by the Company after consultation with the Independent Investment Banker.

Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

Registration Defaults ” has the meaning set forth in the Registration Rights Agreement.

Registration Rights Agreement ” has the meaning set forth in Section 2.09.

Regular Record Date ” means April 1 and October 1 (whether or not a Business Day).

Regulation S ” means Regulation S under the Securities Act of 1933, as amended.

Restricted Security ” means any Note that has not been transferred pursuant to an exemption from the Securities Act of 1933, as amended.

Rule 144A ” means Rule 144A under the Securities Act of 1933, as amended.

Standard & Poor’s ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

Stated Maturity ” has the meaning specified in Section 2.01(f).

Stichting Anheuser-Busch InBev ” means the foundation ( stichting ) incorporated under the laws of The Netherlands and registered with the Trade Register of the Chamber of Commerce under number 34144185 and with registered address at Hofplein 20, 3032AC, Rotterdam, The Netherlands, and its successors.

Treasury Rate ” means, with respect to any Redemption Date:

(i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.l5(5l9)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. treasury securities adjusted to constant maturity under the caption “Treasury constant maturities — Nominal”, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is

 

- 5 -


within three months before or after the remaining term of the Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or

(ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

Trustee ” has the meaning set forth in the first paragraph of this First Supplemental Indenture.

SECTION 1.02 Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 1.03 Separability Clause.

In case any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.04 Benefits of Instrument.

Nothing in this First Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture or the Indenture.

ARTICLE II

3.000% Notes due 2012

SECTION 2.01 Creation of Series; Establishment of Form .

(a) There is hereby established a new series of Securities under the Indenture entitled “3.000% Notes due 2012”.

(b) The form of the Notes, including the form of the certificate of authentication, is attached hereto as Exhibit A. Any Restricted Security shall include the legends set forth on the face of Exhibit A, substantially in the form so set forth.

 

- 6 -


(c) The Company shall issue the Notes in an aggregate principal amount of $1,500,000,000. The Company may from time to time, without the consent of the Holders of the Notes, issue additional Notes in accordance with Sections 301 and 901 of the Indenture. Any such additional Notes subsequently issued shall rank equally and ratably with the Notes in all respects (except for the payment of interest accruing prior to the issue date of such further Notes or except for the first payment of interest following the issue date of such further Notes), so that such further Notes shall be consolidated and form a single series with the Notes and shall have the same terms as to status, redemption or otherwise as the Notes.

(d) The Notes shall be offered and sold in reliance on Rule 144A and/or Regulation S and shall be issued initially in the form of one or more permanent global securities, without coupons, registered in the name of the Depositary or a nominee of the Depositary (each, a “ Global Security ”) and deposited with the Trustee, as custodian for the Depositary. Any proposed transfer of an interest in the Notes shall consist of a transfer in a Global Security and shall be effected through the book-entry system maintained by the Depositary and in accordance with Section 305 of the Indenture.

(e) The Notes shall not have a sinking fund.

(f) The stated maturity of the principal of the Notes shall be October 15, 2012 (the “ Stated Maturity ”).

(g) The outstanding principal amount of the Note shall accrue interest at a rate equal to 3.000%, as provided in Section 2.03.

(h) The Notes shall be issued in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

(1) The Notes shall be subject to both Defeasance and Covenant Defeasance in accordance with the Indenture.

(i) The Notes shall be senior unsecured obligations of the Company and will rank equally with all other existing and future unsecured and unsubordinated debt obligations of the Company.

SECTION 2.02 Guarantee . Subject to the terms and applicable limitations set forth in the Indenture and the form of Notes, the Notes shall be jointly and severally, irrevocably, fully and unconditionally guaranteed by the Guarantors as to all payments due on the Notes whether at their Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of such Guarantees and the Indenture. In the case of the failure of the Company to pay punctually any principal, premium or interest on the Notes, the Guarantors shall cause any such payment to be made as it becomes due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise. The Guarantees shall be unsecured and unsubordinated indebtedness of the Guarantors and rank equally with other unsecured and unsubordinated indebtedness of the Guarantors that is currently outstanding or that it may issue in the future.

 

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SECTION 2.03 Interest. Subject to any adjustment pursuant to Section 2.05 or Section 2.09 of this First Supplemental Indenture, the Notes shall bear interest at a rate equal to 3.000% per annum computed on the basis of a 360-day year consisting of twelve (12) 30-day months. Interest will accrue from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be. Interest is payable semi-annually on April 15 and October 15 of each year (each, an “ Interest Payment Date ”), commencing April 15, 2010, and until full repayment of the outstanding principal of the Notes, to the Person in whose name the Notes were registered at the close of business on the Regular Record Date until the principal thereof is paid or made available for payment, subject to Section 2.05(a) below (except that payment of interest due at the Stated Maturity or on a Redemption Date will be made to the Person to whom payment of the principal of the Notes will be made).

SECTION 2.04 Payment of Principal, Interest and Other Amounts . Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of the Global Security. Initially, the Paying Agent for the Notes will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders of the Notes, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

SECTION 2.05 Interest Rate Adjustment .

(a) The interest rate applicable on the Original Issue Date shall be 3.000%. The interest rate payable on the Notes will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Notes, as set forth below.

(b) If the debt rating of the Notes from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Notes will increase from the interest rate otherwise payable on the Original Issue Date by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Notes increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Notes will be taken into account for purposes of any interest rate adjustment.

 

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S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+

   Ba1    .25%

BB

   Ba2    .50%

BB-

   Ba3    .75%

B+

   B1    1.00%

B

   B2    1.25%

B-

   B3    1.50%

CCC+

   Caa    1.75%

CCC

   Ca    2.00%

(c) If at any time the interest rate on the Notes has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Notes to any of the ratings set forth in the table above, the interest rate of the Notes will be decreased to the interest rate otherwise payable on the Notes on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Notes to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Notes BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Notes at the date of their issuance.

(d) If at any time during the term of the Notes, the Notes are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section 2.05 will cease to apply and the effective interest rate on the Notes on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Notes.

(e) Any increase or decrease in the interest rate pursuant to this Section 2.05 will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Notes more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

SECTION 2.06 Optional Redemption.

(a) The Company may, at its option, redeem the Notes as a whole or in part at any time upon not less than 30 nor more than 60 days’ prior notice, as provided in Section 1104 the Indenture, at a redemption price equal to the greater of:

(i) 100% of the aggregate principal amount of the Notes to be redeemed; and

 

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(ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points;

plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date. The Treasury Rate will be calculated on the third Business Day preceding such Redemption Date.

(b) Unless the Company (and/or a Guarantor) defaults on payment of the Redemption Price, from and after the Redemption Date interest will cease to accrue on the Notes or portions thereof called for redemption. On the Redemption Date, the Company will deposit with the Trustee or with one or more Paying Agents (or, if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in the Indenture) money sufficient to pay the Redemption Price of and accrued interest on the Notes to be redeemed on such date.

(c) If fewer than all of the Notes are to be redeemed, the Trustee will select, not more than 60 days prior to the Redemption Date, the particular Notes or portions thereof for redemption from the outstanding Notes not previously called for redemption, on a pro rata basis or by such method as the Trustee deems fair and appropriate.

SECTION 2.07 Optional Tax Redemption .

(a) The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Notes in whole but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a Redemption Price equal to 100% of the principal amount of the Notes then Outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Notes may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Notes to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

(b) Prior to the mailing of any notice of redemption pursuant to this Section 2.07, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

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(c) No notice of redemption pursuant to this Section 2.07 may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Notes were then due.

SECTION 2.08 Holders’ Option to Require Repayment upon a Change in Control .

(a) In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Notes which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

(b) Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand or by registered mail to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

(c) The Company shall not be required to redeem the Notes under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Notes properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Notes under this Section if it has otherwise exercised its rights to redeem the Notes in full pursuant to this First Supplemental Indenture or has defeased the Notes as described in the Indenture.

(d) If, as a result of this Section 2.08, Holders of the Notes submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Notes Outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire Outstanding principal amount of the Notes on the Effective Date at the same price as for the Notes being redeemed under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Irrevocable notice of such

 

- 11 -


redemption shall be given to the Holders of the Notes in accordance with Section 1104 of the Indenture by the Company, or at the Company’s request, by the Trustee, in the name and at the expense of the Company, in each case as soon as practicable after receipt by the Trustee of the foregoing notice from the Company.

(e) The provisions set forth in this Section 2.08 will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section 2.08 is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“greffe du tribunal de commerce/griffie van de rechtbank van koophandel”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section 2.08 by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Notes will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section 2.08 have been approved (or if such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Notes will decrease by the same amount.

SECTION 2.09 Registration Rights Agreement. In addition to the rights set forth under the Indenture and this First Supplemental Indenture, Holders of the Notes will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc. (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

SECTION 2.10 Registered Exchange Offer. Upon the consummation of the Exchange Offer in accordance with the Registration Rights Agreement, the Company will issue and, upon receipt of a Company Order in accordance with Section 303 of the Indenture, the Trustee will authenticate:

(a) one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Securities accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer; and

(b) Unrestricted Certificated Securities in an aggregate principal amount equal to the principal amount of the Restricted Certificated Securities accepted for exchange in

 

- 12 -


the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer.

Concurrently with the issuance of such Securities, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Securities to be reduced accordingly, and the Company will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Certificated Securities so accepted Unrestricted Certificated Securities in the appropriate principal amount.

All Exchange Securities issued and authenticated in accordance with the above shall be part of the same series as any Outstanding Notes and shall vote and consent, together with any Outstanding Notes as one class, on all matters that require their vote or consent under the Indenture or this First Supplemental Indenture, except in the case of any matter that affects only the Outstanding Notes or only the Exchange Securities.

ARTICLE III

Miscellaneous Provisions

SECTION 3.01 Effectiveness . This First Supplemental Indenture will become effective upon its execution and delivery

SECTION 3.02 Original Issue . The Notes may, upon execution of this First Supplemental Indenture, be executed by the Company and delivered by the Company and the Parent Guarantor to the Trustee for authentication, and the Trustee shall, upon Company order, authenticate and deliver such Notes as in such Company order provided.

SECTION 3.03 Ratification and Integral Part . The Indenture as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture will be deemed an integral part of the Indenture in the manner and to the extent herein and therein provided.

SECTION 3.04 Priority . This First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this First Supplemental Indenture shall, subject to the terms hereof, supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith.

SECTION 3.05 Successors and Assigns . All covenants and agreements in the Indenture, as supplemented and amended by this First Supplemental Indenture, by the Company and the Guarantors will bind their respective successors and assigns, whether so expressed or not.

 

- 13 -


SECTION 3.06 Counterparts . This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 3.07 Guarantee Limitations . The limitations applicable to the Guarantees, as set forth in Section 209 of the Indenture, will apply to the Guarantees issued hereunder, provided that any further limitations, or any amendments or modifications to such Guarantees or limitations thereon, shall be set forth in an additional supplemental indenture, in each case in accordance with the Indenture.

SECTION 3.08 The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company and the Guarantors.

SECTION 3.09 Waiver of Claims. Without prejudice to any provisions of this First Supplemental Indenture, each Guarantor hereby irrevocably and unconditionally waives any right it may have at any time or claim under Jersey law: (a) whether by virtue of the droit de discussion or otherwise to require that recourse be had by the Trustee or any holder of the Notes to the assets of any other person before any claim is enforced against such Guarantor in respect of the obligations assumed by it under this First Supplemental Indenture or any Guarantee; and (b) whether by virtue of the droit de division or otherwise to require that any liability under this First Supplemental Indenture or any Guarantee be divided or apportioned with any other person or reduced in any manner whatsoever.

SECTION 3.10 Governing Law . This First Supplemental Indenture and the Notes and Guarantees will be governed by and construed in accordance with the laws of the State of New York.

 

- 14 -


IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

A NHEUSER -B USCH I N B EV W ORLDWIDE I NC .

as Company

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:  VP Legal Corporate and Compliance

A NHEUSER -B USCH I N B EV NV/SA

as Parent Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:  VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis de Perre

  Name: Jean-Louis de Perre
  Title:  VP Tax

T HE B ANK OF N EW Y ORK M ELLON T RUST C OMPANY , N.A.,

as Trustee

By:  

/s/ Kerry A. McFarland

  Name: Kerry A. McFarland
  Title:  Vice President


A NHEUSER -B USCH C OMPANIES , I NC .

As Subsidiary Guarantor

By:   

/s/ Benoit Loore

  Name:    Benoit Loore
  Title:   VP Legal Corporate and Compliance

I N B EV B ELGIUM SA/NV

as Subsidiary Guarantor

By:  

/s/ Erland Van Vrecken

  Name:   Erland Van Vrecken
  Title:   Legal Director Benelux
By:  

/s/ Vincent Borreman

  Name:   Vincent Borreman
  Title:   Senior Legal Counsel

B RAND B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696, as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name:  

Benoit Loore

  Title:   VP Legal Corporate and Compliance


AB I N B EV F RANCE S.A.S.

as Subsidiary Guarantor

By:   

/s/ Emilie Ruyant

  Name:    Emilie Ruyant
  Title:   Legal Director

I NTERBREW I NTERNATIONAL B.V.

as Subsidiary Guarantor

By:  

/s/ Liesbeth Hellemans

  Name:   Liesbeth Hellemans
  Title:   Senior Legal Counsel Corporate Finance Governance
By:  

/s/ Gert Boulangé

  Name:   Gert Boulangé
  Title:   Tax Director

I NTERBREW C ENTRAL E UROPEAN H OLDING B.V.

as Subsidiary Guarantor

By:  

/s/ Liesbeth Hellemans

  Name:   Liesbeth Hellemans
  Title:   Senior Legal Counsel Corporate Finance Governance
By:  

/s/ Gert Boulangé

  Name:   Gert Boulangé
  Title:   Tax Director

N IMBUSPATH L IMITED

as Subsidiary Guarantor

By:  

/s/ Claude Bahoshy

  Name:   Claude Bahoshy
  Title:   Director


A M B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525 as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:  VP Legal Corporate and Compliance

C O B REW NV/SA

as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:  VP Legal Corporate and Compliance
By:  

/s/ C. Delhaye

  Name: C. Delhaye
  Title:  

I N B EV N EDERLAND N.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:  Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:  Senior Legal Counsel, Corporate Finance and Governance


Exhibit A

FORM OF NOTES

[FACE OF SECURITY]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ANHEUSER-BUSCH INBEV WORLDWIDE INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF (I) IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION, (II) WITHIN THE UNITED STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, PERSONS OTHER THAN “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (III) OUTSIDE THE UNITED STATES OTHER THAN TO PERSONS WHO ARE NOT U.S. PERSONS IN OFFSHORE TRANSACTIONS IN ACCORDANCE WITH THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT. EACH PERSON ACQUIRING AN OWNERSHIP INTEREST IN THIS SECURITY (1) SHALL BE DEEMED TO REPRESENT AND WARRANT THAT IT IS EITHER (A) A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) AND IS OUTSIDE THE UNITED STATES OR (C) ACQUIRING SUCH OWNERSHIP INTEREST PURSUANT TO A VALID REGISTRATION STATEMENT OR IN ANOTHER TRANSACTION EXEMPT FROM SUCH REGISTRATION; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT IN ACCORDANCE WITH THE FOREGOING RESTRICTIONS, AND IN ANY CASE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE

 

A-1


Exhibit A

 

UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION; (3) PRIOR TO SUCH TRANSFER, AGREES THAT IT WILL FURNISH TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS REGISTRAR (OR A SUCCESSOR REGISTRAR, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY AND THE REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “UNITED STATES”, “U.S. PERSON” AND “OFFSHORE TRANSACTION” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

Anheuser-Busch InBev Worldwide Inc.

3.000% Note due 2012

Payment of Principal, Premium, if any,

and Interest Irrevocably, Fully and Unconditionally Guaranteed by

Anheuser-Busch InBev NV/SA, Anheuser-Busch Companies, Inc., InBev Belgium SA/NV,

BrandBrew S.A., Cobrew NV/SA, AB InBev France S.A.S., Interbrew International B.V.,

Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and InBev

Nederland N.V.

 

No.    $             
CUSIP No.                   ISIN:

Anheuser-Busch InBev Worldwide Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [    ] Dollars (or such other principal sum as shall be set forth on the Schedule attached hereto) on October 15, 2012 and to pay interest thereon from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on April 15 and October 15 in each year, commencing on April 15, 2010, at the rate of 3.000% per annum (subject to adjustment as provided herein) until the principal hereof is paid or made available for payment.

The interest so payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or

 

A-2


Exhibit A

 

one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Subject to the terms of the Indenture, this Security is fully and unconditionally guaranteed as to all payments due hereon whether at the Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of the Guarantees and the Indenture.

Payments of principal of (and premium, if any) and interest on the Securities represented by this Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of this Security. Initially, the Paying Agent for the Securities will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal, premium, if any, and interest on the Securities represented by this Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

Notwithstanding any provision of this Security or the Indenture, the Company may make any and all payments of principal, premium (if any) and interest on this Security pursuant to the applicable procedures of the Depositary for this Security as permitted in the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

A-3


Exhibit A

 

I N W ITNESS W HEREOF , the Company has caused this instrument to be duly executed.

Dated:                     

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.
By  

 

  Name:
  Title:

 

Attest:

 

CERTIFICATE OF AUTHENTICATION

This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

 

THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as Trustee

By  

 

  Authorized Signatory

 

A-4


Exhibit A

 

[REVERSE OF SECURITY]

1. Securities and Indenture

This Security is one of a duly authorized issue of securities of the Company (herein called the “ Securities ”), issued and to be issued in one or more series under an Indenture, dated as of October 16, 2009 (the “Base Indenture”), as supplemented by the First Supplemental Indenture, dated as of October 16, 2009 (the “ First Supplemental Indenture ” and together with the Base Indenture, the “ Indenture ”), in each case among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “ Trustee ”, which term includes any successor trustee under the Base Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

2. Series and Denomination

This Security is one of the series designated on the face hereof, initially limited to an aggregate principal amount of $1,500,000,000, except as provided in the Indenture. References herein to “this series” mean the series of securities designated on the face hereof. Except as provided in the preceding paragraph, references herein to the “Securities” means (unless the context otherwise requires) the Securities of this series and includes any other securities issued, as provided in the Indenture and forming a single series with the Securities of this series.

The Securities are issuable only in registered form without coupons in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

3. Interest Rate Adjustment

The interest rate payable on the Securities will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Securities, as set forth below.

If the debt rating of the Securities from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Securities will increase from the interest rate otherwise payable on the day Securities are first issued (the “ Original Issue Date ”) by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Securities increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Securities will be taken into account for purposes of any interest rate adjustment.

 

A-5


Exhibit A

 

S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+    Ba1    .25%
BB    Ba2    .50%
BB-    Ba3    .75%
B+    B1    1.00%
B    B2    1.25%
B-    B3    1.50%
CCC+    Caa    1.75%
CCC    Ca    2.00%

If at any time the interest rate on the Securities has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Securities to any of the ratings set forth in the table above, the interest rate of the Securities will be decreased to the interest rate otherwise payable on the Securities on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Securities to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Securities BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Securities on the Original Issue Date.

If at any time during the term of the Securities, the Securities are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section will cease to apply and the effective interest rate on the Securities on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Securities.

Any increase or decrease in the interest rate pursuant to this Section will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Securities more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

4. Redemption at the Company’s Option

The Company may, at its option, redeem the Securities of this series as a whole or in part at any time upon not less than 30 nor more than 60 days prior notice at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the Securities to be redeemed and (ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points; plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date.

 

A-6


Exhibit A

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

5. Repurchase at the Option of Holder Upon a Change in Control

In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice, in the form attached as Annex A (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Securities which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand, by registered mail, or by facsimile transmission to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

The Company shall not be required to redeem the Securities under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Securities properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Securities under this Section if it has otherwise exercised it rights to redeem the Securities in full or has defeased the Securities as described in the Indenture.

If, as a result of this Section, Holders of the Securities submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Securities outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire outstanding principal amount of the Securities on the Effective Date at the same price as for the Securities being redeem under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Notice of such redemption shall be given to the Holders of the Securities to be redeemed in the manner provided for in the First Supplemental Indenture.

 

A-7


Exhibit A

 

The provisions set forth in this Section will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“ greffe du tribunal de commerce/griffie van de rechtbank van koophandel ”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Securities will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section have been approved (or unless and until such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Securities will decrease by the same amount.

6. Optional Tax Redemption

The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Securities in whole, but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a redemption price equal to 100% of the principal amount of the Securities then outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Securities may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Securities to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

Prior to the, mailing of any notice of redemption pursuant to this Section, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

A-8


Exhibit A

 

No notice of redemption pursuant to this Section may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Securities were then due.

7. Registration Rights

In addition to the rights set forth under the Indenture and the First Supplemental Indenture, Holders of this Security will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc., (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

8. Additional Amounts

In the event that any Guarantor becomes obligated to make payments in respect of the Securities, such Guarantor will make all payments in respect of the Securities without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax (the “ Relevant Taxing Jurisdiction ”) unless such withholding or deduction is required by law. In such event, such Guarantor will pay to the Holders such additional amounts (the “ Additional Amounts ”) as shall be necessary in order that the net amounts received by the Holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:

(a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by such Guarantor from payment of principal or interest made by it, or

(b) are payable by reason of the Holder or beneficial owner having, or having had, some personal or business connection with such Relevant Taxing Jurisdiction and not merely by reason of the fact that payments in respect of the Securities or the Guarantees are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in the Relevant Taxing Jurisdiction, or

(c) are imposed or withheld by reason of the failure of the Holder or beneficial owner to provide certification, information, documents or other evidence concerning the nationality, residence, or identity of the Holder and beneficial owner or to make any valid or timely declaration or similar claim or satisfy any other reporting requirements relating to such matters, whether required or imposed by statute, treaty, regulation or administrative practice, as a precondition to exemption from, or a reduction in the rate of withholding or deduction of such taxes, or

(d) consist of any estate, inheritance, gift, sales, excise, transfer, personal property or similar taxes, or

 

A-9


Exhibit A

 

(e) are imposed on or with respect to any payment by the applicable Guarantor to the registered Holder if such Holder is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent that taxes would not have been imposed on such payment had such registered Holder been the sole beneficial owner of this Security, or

(f) are deducted or withheld pursuant to (i) any European Union directive or regulation concerning the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Relevant Taxing Jurisdiction or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such directive, regulation, treaty or understanding, or

(g) are payable by reason of a change in law or practice that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and written notice thereof is provided to the Holders, whichever occurs later, or

(h) are payable because any Security was presented to a particular paying agent for payment if the Security could have been presented to another paying agent without any such withholding or deduction, or

(i) are payable for any combination of (a) through (h) above.

References to principal or interest in respect of the Securities shall be deemed to include any Additional Amounts which may be payable as set forth in the Indenture.

The covenant regarding Additional Amounts shall not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States, and will apply to the Company any time it is incorporated in a jurisdiction outside of the United States.

9. Transfer and Exchange

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

A-10


Exhibit A

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

10. Default

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity and/or security, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity and/or security. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

11. Amendment, Modification and Waiver

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company or the Guarantors and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding (irrespective of series) that are to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

A-11


Exhibit A

 

12. Defeasance

The Indenture contains provisions for defeasance at any time of certain restrictive covenants and Events of Default with respect to this Security upon compliance with certain conditions set forth in the Indenture.

13. Governing Law

This Security shall be governed by and construed in accordance with the laws of the State of New York.

14. Defined Terms

All terms used in this Security which are defined in the Base Indenture, the First Supplemental Indenture or the Registration Rights Agreement, shall have the meanings assigned to them in the Base Indenture, the First Supplemental Indenture or the Registration Rights Agreement, as the case may be.

 

A-12


Exhibit A

 

ANNEX A

OPTION OF HOLDER TO ELECT PURCHASE

 

To: The Bank of New York Mellon Trust Company, N.A.

 

Cc: Anheuser-Busch InBev Worldwide Inc.

The undersigned registered owner of this Security acknowledges receipt of a notice from Anheuser-Busch InBev Worldwide Inc. (the “ Company ”) as to the occurrence of an Early Redemption Event and requests and instructs the Company to repay the registered holder hereof in accordance with the applicable provisions of the indenture, as supplemented, among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated October 16, 2009, and the instructions below:

If you wish to have this Security purchased by the Company pursuant to Section 2.08 of the First Supplemental Indenture among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors and the Trustee, dated October 16, 2009 (the “ First Supplemental Indenture ”), check the following box:   ¨

If you wish to have a portion of this Security purchased by the Company pursuant to Section 2.08 of the First Supplemental Indenture, state the amount:

$             

 

Dated:     Signature:
    Signature Guarantee:

(Sign exactly as your name appears on the other side of this Security)

Signatures must be guaranteed by an “Eligible Guarantor Institution” meeting the requirements of the Securities Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “Signature Guarantee Program” as may be determined by the Securities Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-13


Exhibit A

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

3.000% Notes due 2012

The initial principal amount of this Global Security is $[    ]. The following increases or decreases in this Global Security have been made:

 

Date of Exchange

  

Amount of decrease in
Principal Amount of this
Global Security

  

Amount of increase in
Principal Amount of this
Global Security

  

Principal Amount of this
Global Security following
such decrease or increase

  

Signature of authorized
signatory of Trustee or
Custodian

____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________

 

A-14


Exhibit B

FORM OF GUARANTEE

For value received, the undersigned (herein called the “Guarantors”, and each, a “Guarantor” which terms include any successor Person or Persons under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby jointly and severally, irrevocably, fully and unconditionally guarantee to each Holder of this Security, which has been authenticated and delivered by the Trustee, the due and punctual payment of the principal of (including any amount in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), on this Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of this Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption or upon declaration of acceleration or otherwise according to the terms of this Security and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), interest (together with any Additional Amounts payable pursuant to the terms of this Security), sinking fund payment, or analogous obligation, each Guarantor agrees duly and punctually to pay the same. Each Guarantor hereby agrees that its obligations hereunder shall rank pari passu with all other unsecured and unsubordinated obligations of such Guarantor, shall be as principal and not merely as surety, and shall be absolute and unconditional irrespective of any extension of the time for payment of this Security, any modification of this Security, any invalidity, irregularity or unenforceability of this Security or the Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the Holder of this Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to this Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to this Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), thereon.

Each Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of a Holder against the Company with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other obligor with respect to such payment.

This Guarantee shall not be valid or become obligatory for any purpose with respect to this Security until the certificate of authentication on this Security shall have been signed by the Trustee.

This Guarantee is subject to the release upon the terms set forth in the Indenture.

This Guarantee is subject to certain limitations and waivers set forth in the Indenture, as it may be supplemented from time to time.

 

B-1


Exhibit B

 

This Guarantee is governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be signed by facsimile by its duly authorized officer or representative and, if required by applicable law, has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

 

[GUARANTOR(S)]
By:  

 

 

B-2

EXHIBIT 4.3

 

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

and

ANHEUSER-BUSCH INBEV NV/SA

and

the SUBSIDIARY GUARANTORS party hereto from time to time

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

SECOND SUPPLEMENTAL INDENTURE

Dated as of October 16, 2009

 

 

To the Indenture, dated as of October 16, 2009,

among Anheuser-Busch InBev Worldwide Inc.,

Anheuser-Busch InBev NV/SA, the Subsidiary Guarantors party thereto from time to time and

The Bank of New York Mellon Trust Company, N.A., Trustee

4.125% Notes due 2015

 

 


TABLE OF CONTENTS

 

          Page

ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

   2
SECTION 1.01    Definitions    2
SECTION 1.02    Effect of Headings    6
SECTION 1.03    Separability Clause    6
SECTION 1.04    Benefits of Instrument    6

ARTICLE II 4.125% NOTES DUE 2015

   6
SECTION 2.01    Creation of Series; Establishment of Form    6
SECTION 2.02    Guarantee    7
SECTION 2.03    Interest    8
SECTION 2.04    Payment of Principal, Interest and Other Amounts    8
SECTION 2.05    Interest Rate Adjustment    8
SECTION 2.06    Optional Redemption    9
SECTION 2.07    Optional Tax Redemption    10
SECTION 2.08    Holders’ Option to Require Repayment upon a Change in Control    11
SECTION 2.09    Registration Rights Agreement    12

SECTION 2.10

   Registered Exchange Offer    12

ARTICLE III MISCELLANEOUS PROVISIONS

   13
SECTION 3.01    Effectiveness    13
SECTION 3.02    Original Issue    13
SECTION 3.03    Ratification and Integral Part    13
SECTION 3.04    Priority    13
SECTION 3.05    Successors and Assigns    13
SECTION 3.06    Counterparts    14
SECTION 3.07    Guarantee Limitations    14
SECTION 3.08    The Trustee    14
SECTION 3.09    Waiver of Claims    14
SECTION 3.10    Governing Law    14
EXHIBIT A       A-1
EXHIBIT B       B-1


SECOND SUPPLEMENTAL INDENTURE, dated as of October 16, 2009 (the “ Second Supplemental Indenture ”), among ANHEUSER-BUSCH INBEV WORLDWIDE INC., a corporation duly organized and existing under the laws of the State of Delaware (the “ Company ”), ANHEUSER-BUSCH INBEV NV/SA, a société anonyme duly organized and existing under the laws of the Kingdom of Belgium (the “ Parent Guarantor ”), ANHEUSER-BUSCH COMPANIES, INC., a corporation duly organized and existing under the laws of the State of Delaware, INBEV BELGIUM SA/NV, a public limited liability company organized and existing under Belgian law, BRANDBREW S.A., a public limited liability company organized and existing under Luxembourg law, COBREW NV/SA, a public limited liability company organized and existing under Belgian law, AB INBEV FRANCE S.A.S., a société par actions simplifiée organized and existing under French law, INTERBREW INTERNATIONAL B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, INTERBREW CENTRAL EUROPEAN HOLDING B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, NIMBUSPATH LIMITED, a private limited company organized and existing under English law, AMBREW S.A., a société anonyme organized and existing under Luxembourg law, INBEV NEDERLAND N.V., a limited liability company incorporated and existing under Dutch law with its corporate seat at Breda, the Netherlands (each, a “ Subsidiary Guarantor ”, and together with the Parent Guarantor, the “ Guarantors ”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”) to the Indenture, dated as of October 16, 2009, among the Company, the Guarantors and the Trustee (the “ Indenture ”).

RECITALS OF THE COMPANY AND THE GUARANTORS

WHEREAS, the Company, the Guarantors and the Trustee are parties to the Indenture, which provides for the issuance from time to time of unsecured debt securities of the Company;

WHEREAS, Section 901(9) of the Indenture permits supplements thereto without the consent of Holders of Securities to establish the form or terms of Securities of any series as permitted by Sections 201 and 301 of the Indenture;

WHEREAS, as contemplated by Section 301 of the Indenture, the Company intends to issue a new series of Securities to be known as the Company’s “4.125% Notes due 2015” (the “ Notes ”) under the Indenture;

WHEREAS, the Company and the Guarantors have taken all necessary corporate action to authorize the execution and delivery of this Second Supplemental Indenture;

NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guarantors and the Trustee mutually agree as follows:

 

- 1 -


ARTICLE I

Definitions and Other Provisions of General Application

SECTION 1.01 Definitions.

Except as otherwise expressly provided or unless the context otherwise requires, all terms used in this Second Supplemental Indenture which are defined in the Indenture shall have the meanings ascribed to them by the Indenture. The following terms used in this Second Supplemental Indenture have the following respective meanings:

Acting in concert ” means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the acquisition directly or indirectly of shares in the Parent Guarantor by any of them, either directly or indirectly, to obtain Control of the Parent Guarantor.

Additional Interest ” has the meaning set forth in the Registration Rights Agreement.

Business Day ” means any day other than a day on which commercial banks or foreign exchange markets are permitted or required to be closed in New York City, London or Brussels.

Change in Tax Law ” has the meaning set forth in Section 2.07(a)

Change of Control ” means any person or group of persons acting in concert (in each case other than Stichting Anheuser-Busch InBev or any existing direct or indirect certificate holder or certificate holders of Stichting Anheuser-Busch InBev) gaining Control of the Parent Guarantor; provided that a change of control shall not be deemed to have occurred if all or substantially all of the shareholders of the relevant person or group of persons are, or immediately prior to the event which would otherwise have constituted a change of control were, the shareholders of the Parent Guarantor with the same (or substantially the same) pro rata interests in the share capital of the relevant person or group of persons as such shareholders have, or as the case may be, had, in the share capital of the Parent Guarantor.

Change of Control Announcement ” means the public announcement by the Parent Guarantor or any actual purchaser relating to a Change of Control.

Change of Control Period ” shall commence on the date of the Change of Control Announcement, but not later than on the date of the Change of Control, and shall end 60 days after the Change of Control (which period shall be extended with respect to a rating agency so long as the rating of the Notes is under publicly announced consideration for possible downgrade by that rating agency, such period not to exceed 60 days after the public announcement of such consideration).

Company ” has the meaning set forth in the first paragraph of this Second Supplemental Indenture.

 

- 2 -


Comparable Treasury Issue ” means the U.S. Treasury security (not inflation-indexed) selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

Comparable Treasury Price ” means, with respect to a Redemption Date, (i) the average of five Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

Control ” in relation to any entity means either the direct or indirect ownership of more than 50 percent of the share capital or similar rights of ownership of the entity or the power to direct the management and the policies of the entity whether through the ownership of share capital, contract or otherwise.

Day Count Convention ” means that if an Interest Payment Date (other than in the case of the Stated Maturity of, or a Redemption Date for, the Notes) falls on a day that is not a Business Day, that Interest Payment Date will be postponed to the next succeeding Business Day unless that Business Day is in the next succeeding calendar month, in which case the Interest Payment Date will be the immediately preceding Business Day.

Depositary ” means The Depository Trust Company, or any successor thereto.

Early Redemption Event ” has the meaning set forth in Section 2.08(a).

Early Redemption Notice ” has the meaning set forth in Section 2.08(a)(ii).

Effective Date ” has the meaning set forth in Section 2.08(a)(i).

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Securities ” has the meaning set forth in the Registration Rights Agreement.

“Fitch” means Fitch, Inc.

Global Security ” has the meaning set forth in Section 2.01(d).

Guarantor ” has the meaning set forth in the first paragraph of this Second Supplemental Indenture.

Indenture ” has the meaning set forth in the first paragraph of this Second Supplemental Indenture.

 

- 3 -


Independent Investment Banker ” means Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP Paribas Securities Corp. as specified by the Company, or if all of these firms are unwilling or unable to serve in that capacity, an independent investment banking institution of national standing in the United States appointed by the Company.

Interest Payment Date ” has the meaning set forth in Section 2.03.

Letter of Transmittal ” means the letter of transmittal to be prepared by the Company and sent to all Holders of Notes for use by such Holders in connection with the Exchange Offer.

Moody’s ” means Moody’s Investors Service, Inc.

Notes ” has the meaning set forth in the Recitals.

Original Issue Date ” means the date or dates on which the Notes are issued.

Parent Guarantor ” has the meaning set forth in the first paragraph of this Second Supplemental Indenture.

Ratings Downgrade ” shall occur if any two solicited credit ratings for the Parent Guarantor’s long-term unsecured debt fall below investment grade or if all three Rating Agencies (as defined below) cease to assign (other than temporarily) a credit rating to the Parent Guarantor. A credit rating below investment grade shall mean, in relation to Standard & Poor’s Rating Services, a rating of BB+ or below, in relation to Moody’s Investor Services Inc., a rating of Bal or below, in relation to Fitch, Inc. a rating of BB+ or below and, where another “nationally recognized statistical rating agency” has been designated by the Parent Guarantor, a comparable rating. A Ratings Downgrade shall not occur with respect to a particular Rating Agency in respect of a Change of Control unless the Rating Agency downgrading the Guarantor announces or publicly confirms or informs the Parent Guarantor in writing at its request that the downgrade was the result, in whole or in part, of the applicable Change of Control. If one or more Rating Agencies issues an improved credit rating for the Parent Guarantor prior to the Effective Date so that the circumstances giving rise to the Ratings Downgrade no longer apply, then the Ratings Downgrade shall be deemed not to have occurred and the Holders shall have no right to demand redemption of their Notes under Section 2.08.

Rating Agency ” means each of Standard & Poor’s Ratings Services, a Division of The McGraw Hill Companies, Inc., Fitch, Inc., or Moody’s Investors Services, Inc., their respective successors, or any other nationally recognized statistical rating agency designated by the Parent Guarantor.

Reference Treasury Dealer ” means (i) Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP Paribas Securities Corp. and their respective successors, provided , however , that if any of the foregoing shall cease to be a primary U.S. government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer and (ii) any three other Primary Treasury Dealers selected by the Company after consultation with the Independent Investment Banker.

 

- 4 -


Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

Registration Defaults ” has the meaning set forth in the Registration Rights Agreement.

Registration Rights Agreement ” has the meaning set forth in Section 2.09.

Regular Record Date ” means January 1 and July 1 (whether or not a Business Day).

Regulation S ” means Regulation S under the Securities Act of 1933, as amended.

Restricted Security ” means any Note that has not been transferred pursuant to an exemption from the Securities Act of 1933, as amended.

Rule 144A ” means Rule 144A under the Securities Act of 1933, as amended.

Second Supplemental Indenture ” has the meaning set forth in the Recitals.

Standard & Poor’s ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

Stated Maturity ” has the meaning specified in Section 2.01(f).

Stichting Anheuser-Busch InBev ” means the foundation ( stichting ) incorporated under the laws of The Netherlands and registered with the Trade Register of the Chamber of Commerce under number 34144185 and with registered address at Hofplein 20, 3032AC, Rotterdam, The Netherlands, and its successors.

Treasury Rate ” means, with respect to any Redemption Date:

(i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.l5(5l9)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. treasury securities adjusted to constant maturity under the caption “Treasury constant maturities — Nominal”, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of the Notes, yields for

 

- 5 -


the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or

(ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

Trustee ” has the meaning set forth in the first paragraph of this Second Supplemental Indenture.

SECTION 1.02 Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 1.03 Separability Clause.

In case any provision in this Second Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.04 Benefits of Instrument.

Nothing in this Second Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Second Supplemental Indenture or the Indenture.

ARTICLE II

4.125% Notes due 2015

SECTION 2.01 Creation of Series; Establishment of Form .

(a) There is hereby established a new series of Securities under the Indenture entitled “4.125% Notes due 2015”.

(b) The form of the Notes, including the form of the certificate of authentication, is attached hereto as Exhibit A. Any Restricted Security shall include the legends set forth on the face of Exhibit A, substantially in the form so set forth.

(c) The Company shall issue the Notes in an aggregate principal amount of $1,250,000,000. The Company may from time to time, without the consent of the Holders of the

 

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Notes, issue additional Notes in accordance with Sections 301 and 901 of the Indenture. Any such additional Notes subsequently issued shall rank equally and ratably with the Notes in all respects (except for the payment of interest accruing prior to the issue date of such further Notes or except for the first payment of interest following the issue date of such further Notes), so that such further Notes shall be consolidated and form a single series with the Notes and shall have the same terms as to status, redemption or otherwise as the Notes.

(d) The Notes shall be offered and sold in reliance on Rule 144A and/or Regulation S and shall be issued initially in the form of one or more permanent global securities, without coupons, registered in the name of the Depositary or a nominee of the Depositary (each, a “ Global Security ”) and deposited with the Trustee, as custodian for the Depositary. Any proposed transfer of an interest in the Notes shall consist of a transfer in a Global Security and shall be effected through the book-entry system maintained by the Depositary and in accordance with Section 305 of the Indenture.

(e) The Notes shall not have a sinking fund.

(f) The stated maturity of the principal of the Notes shall be January 15, 2015 (the “ Stated Maturity ”).

(g) The outstanding principal amount of the Note shall accrue interest at a rate equal to 4.125%, as provided in Section 2.03.

(h) The Notes shall be issued in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

(1) The Notes shall be subject to both Defeasance and Covenant Defeasance in accordance with the Indenture.

(i) The Notes shall be senior unsecured obligations of the Company and will rank equally with all other existing and future unsecured and unsubordinated debt obligations of the Company.

SECTION 2.02 Guarantee . Subject to the terms and applicable limitations set forth in the Indenture and the form of Notes, the Notes shall be jointly and severally, irrevocably, fully and unconditionally guaranteed by the Guarantors as to all payments due on the Notes whether at their Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of such Guarantees and the Indenture. In the case of the failure of the Company to pay punctually any principal, premium or interest on the Notes, the Guarantors shall cause any such payment to be made as it becomes due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise. The Guarantees shall be unsecured and unsubordinated indebtedness of the Guarantors and rank equally with other unsecured and unsubordinated indebtedness of the Guarantors that is currently outstanding or that it may issue in the future.

 

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SECTION 2.03 Interest. Subject to any adjustment pursuant to Section 2.05 or Section 2.09 of this Second Supplemental Indenture, the Notes shall bear interest at a rate equal to 4.125% per annum computed on the basis of a 360-day year consisting of twelve (12) 30-day months. Interest will accrue from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be. Interest is payable semi-annually on January 15 and July 15 of each year (each, an “ Interest Payment Date ”), commencing July 15, 2010, and until full repayment of the outstanding principal of the Notes, to the Person in whose name the Notes were registered at the close of business on the Regular Record Date until the principal thereof is paid or made available for payment, subject to Section 2.05(a) below (except that payment of interest due at the Stated Maturity or on a Redemption Date will be made to the Person to whom payment of the principal of the Notes will be made).

SECTION 2.04 Payment of Principal, Interest and Other Amounts . Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of the Global Security. Initially, the Paying Agent for the Notes will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders of the Notes, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

SECTION 2.05 Interest Rate Adjustment .

(a) The interest rate applicable on the Original Issue Date shall be 4.125%. The interest rate payable on the Notes will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Notes, as set forth below.

(b) If the debt rating of the Notes from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Notes will increase from the interest rate otherwise payable on the Original Issue Date by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Notes increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Notes will be taken into account for purposes of any interest rate adjustment.

 

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S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+

   Ba1    .25%

BB

   Ba2    .50%

BB-

   Ba3    .75%

B+

   B1    1.00%

B

   B2    1.25%

B-

   B3    1.50%

CCC+

   Caa    1.75%

CCC

   Ca    2.00%

(c) If at any time the interest rate on the Notes has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Notes to any of the ratings set forth in the table above, the interest rate of the Notes will be decreased to the interest rate otherwise payable on the Notes on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Notes to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Notes BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Notes at the date of their issuance.

(d) If at any time during the term of the Notes, the Notes are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section 2.05 will cease to apply and the effective interest rate on the Notes on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Notes.

(e) Any increase or decrease in the interest rate pursuant to this Section 2.05 will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Notes more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

SECTION 2.06 Optional Redemption.

(a) The Company may, at its option, redeem the Notes as a whole or in part at any time upon not less than 30 nor more than 60 days’ prior notice, as provided in Section 1104 the Indenture, at a redemption price equal to the greater of:

(i) 100% of the aggregate principal amount of the Notes to be redeemed; and

 

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(ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 30 basis points;

plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date. The Treasury Rate will be calculated on the third Business Day preceding such Redemption Date.

(b) Unless the Company (and/or a Guarantor) defaults on payment of the Redemption Price, from and after the Redemption Date interest will cease to accrue on the Notes or portions thereof called for redemption. On the Redemption Date, the Company will deposit with the Trustee or with one or more Paying Agents (or, if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in the Indenture) money sufficient to pay the Redemption Price of and accrued interest on the Notes to be redeemed on such date.

(c) If fewer than all of the Notes are to be redeemed, the Trustee will select, not more than 60 days prior to the Redemption Date, the particular Notes or portions thereof for redemption from the outstanding Notes not previously called for redemption, on a pro rata basis or by such method as the Trustee deems fair and appropriate.

SECTION 2.07 Optional Tax Redemption .

(a) The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Notes in whole but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a Redemption Price equal to 100% of the principal amount of the Notes then Outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Notes may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Notes to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

(b) Prior to the mailing of any notice of redemption pursuant to this Section 2.07, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

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(c) No notice of redemption pursuant to this Section 2.07 may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Notes were then due.

SECTION 2.08 Holders’ Option to Require Repayment upon a Change in Control .

(a) In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Notes which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

(b) Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand or by registered mail to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

(c) The Company shall not be required to redeem the Notes under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Notes properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Notes under this Section if it has otherwise exercised its rights to redeem the Notes in full pursuant to this Second Supplemental Indenture or has defeased the Notes as described in the Indenture.

(d) If, as a result of this Section 2.08, Holders of the Notes submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Notes Outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire Outstanding principal amount of the Notes on the Effective Date at the same price as for the Notes being redeemed under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Irrevocable notice of such

 

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redemption shall be given to the Holders of the Notes in accordance with Section 1104 of the Indenture by the Company, or at the Company’s request, by the Trustee, in the name and at the expense of the Company, in each case as soon as practicable after receipt by the Trustee of the foregoing notice from the Company.

(e) The provisions set forth in this Section 2.08 will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section 2.08 is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“greffe du tribunal de commerce/griffie van de rechtbank van koophandel”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section 2.08 by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Notes will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section 2.08 have been approved (or if such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Notes will decrease by the same amount.

SECTION 2.09 Registration Rights Agreement. In addition to the rights set forth under the Indenture and this Second Supplemental Indenture, Holders of the Notes will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc. (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

SECTION 2.10 Registered Exchange Offer. Upon the consummation of the Exchange Offer in accordance with the Registration Rights Agreement, the Company will issue and, upon receipt of a Company Order in accordance with Section 303 of the Indenture, the Trustee will authenticate:

(a) one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Securities accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer; and

(b) Unrestricted Certificated Securities in an aggregate principal amount equal to the principal amount of the Restricted Certificated Securities accepted for exchange in

 

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the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer.

Concurrently with the issuance of such Securities, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Securities to be reduced accordingly, and the Company will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Certificated Securities so accepted Unrestricted Certificated Securities in the appropriate principal amount.

All Exchange Securities issued and authenticated in accordance with the above shall be part of the same series as any Outstanding Notes and shall vote and consent, together with any Outstanding Notes as one class, on all matters that require their vote or consent under the Indenture or this Second Supplemental Indenture, except in the case of any matter that affects only the Outstanding Notes or only the Exchange Securities.

ARTICLE III

Miscellaneous Provisions

SECTION 3.01 Effectiveness . This Second Supplemental Indenture will become effective upon its execution and delivery

SECTION 3.02 Original Issue . The Notes may, upon execution of this Second Supplemental Indenture, be executed by the Company and delivered by the Company and the Parent Guarantor to the Trustee for authentication, and the Trustee shall, upon Company order, authenticate and deliver such Notes as in such Company order provided.

SECTION 3.03 Ratification and Integral Part . The Indenture as supplemented by this Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second Supplemental Indenture will be deemed an integral part of the Indenture in the manner and to the extent herein and therein provided.

SECTION 3.04 Priority . This Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this Second Supplemental Indenture shall, subject to the terms hereof, supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith.

SECTION 3.05 Successors and Assigns . All covenants and agreements in the Indenture, as supplemented and amended by this Second Supplemental Indenture, by the Company and the Guarantors will bind their respective successors and assigns, whether so expressed or not.

 

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SECTION 3.06 Counterparts . This Second Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 3.07 Guarantee Limitations . The limitations applicable to the Guarantees, as set forth in Section 209 of the Indenture, will apply to the Guarantees issued hereunder, provided that any further limitations, or any amendments or modifications to such Guarantees or limitations thereon, shall be set forth in an additional supplemental indenture, in each case in accordance with the Indenture.

SECTION 3.08 The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company and the Guarantors.

SECTION 3.09 Waiver of Claims . Without prejudice to any provisions of this Second Supplemental Indenture, each Guarantor hereby irrevocably and unconditionally waives any right it may have at any time or claim under Jersey law: (a) whether by virtue of the droit de discussion or otherwise to require that recourse be had by the Trustee or any holder of the Notes to the assets of any other person before any claim is enforced against such Guarantor in respect of the obligations assumed by it under this Second Supplemental Indenture or any Guarantee; and (b) whether by virtue of the droit de division or otherwise to require that any liability under this Second Supplemental Indenture or any Guarantee be divided or apportioned with any other person or reduced in any manner whatsoever.

SECTION 3.10 Governing Law . This Second Supplemental Indenture and the Notes and Guarantees will be governed by and construed in accordance with the laws of the State of New York.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

A NHEUSER -B USCH I N B EV W ORLDWIDE I NC .

as Company

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance

A NHEUSER -B USCH I N B EV NV/SA

as Parent Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis Van de Perre

  Name: Jean-Louis Van de Perre
  Title:   VP Tax

T HE B ANK OF N EW Y ORK M ELLON T RUST C OMPANY , N.A.,

as Trustee

By:  

/s/ Kerry A. McFarland

  Name: Kerry A. McFarland
  Title:   Vice President


A NHEUSER -B USCH C OMPANIES , I NC .

As Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance

I N B EV B ELGIUM SA/NV

as Subsidiary Guarantor

By:  

/s/ Vincent Borreman

  Name: Vincent Borreman
  Title:   Senior Legal Counsel
By:  

/s/ Erland Van Vreckem

  Name: Erland Van Vreckem
  Title:   Legal Director Benelux

B RAND B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696, as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance

 


AB I N B EV F RANCE S.A.S.

as Subsidiary Guarantor

By:  

/s/ Emilie Ruyant

  Name: Emilie Ruyant
  Title:   Legal Director

I NTERBREW I NTERNATIONAL B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:   Senior Legal Counsel, Corporate Finance Governance

I NTERBREW C ENTRAL E UROPEAN H OLDING B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director
By:  

/s/ Liesbeth Hellemans

Name: Liesbeth Hellemans

  Title:   Senior Legal Counsel, Corporate Finance Governance

N IMBUSPATH L IMITED

as Subsidiary Guarantor

By:  

/s/ Claude Bahoshy

  Name: Claude Bahoshy
  Title:   Director


A M B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525 as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance

C O B REW NV/SA

as Subsidiary Guarantor

By:  

/s/ Benoit Lorre

  Name: Benoit Lorre
  Title: VP Legal Corporate and Compliance
By:  

/s/ C. Delhaye

  Name: C. Delhaye
  Title:

I N B EV N EDERLAND N.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title: Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
 

Title: Senior Legal Counsel, Corporate

Finance and Governance


Exhibit A

FORM OF NOTES

[FACE OF SECURITY]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ANHEUSER-BUSCH INBEV WORLDWIDE INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF (I) IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION, (II) WITHIN THE UNITED STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, PERSONS OTHER THAN “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (III) OUTSIDE THE UNITED STATES OTHER THAN TO PERSONS WHO ARE NOT U.S. PERSONS IN OFFSHORE TRANSACTIONS IN ACCORDANCE WITH THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT. EACH PERSON ACQUIRING AN OWNERSHIP INTEREST IN THIS SECURITY (1) SHALL BE DEEMED TO REPRESENT AND WARRANT THAT IT IS EITHER (A) A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) AND IS OUTSIDE THE UNITED STATES OR (C) ACQUIRING SUCH OWNERSHIP INTEREST PURSUANT TO A VALID REGISTRATION STATEMENT OR IN ANOTHER TRANSACTION EXEMPT FROM SUCH REGISTRATION; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT IN ACCORDANCE WITH THE FOREGOING RESTRICTIONS, AND IN ANY CASE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE

 

A-1


Exhibit A

 

UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION; (3) PRIOR TO SUCH TRANSFER, AGREES THAT IT WILL FURNISH TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS REGISTRAR (OR A SUCCESSOR REGISTRAR, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY AND THE REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “UNITED STATES”, “U.S. PERSON” AND “OFFSHORE TRANSACTION” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

Anheuser-Busch InBev Worldwide Inc.

4.125% Note due 2015

Payment of Principal, Premium, if any,

and Interest Irrevocably, Fully and Unconditionally Guaranteed by

Anheuser-Busch InBev NV/SA, Anheuser-Busch Companies, Inc., InBev Belgium SA/NV,

BrandBrew S.A., Cobrew NV/SA, AB InBev France S.A.S., Interbrew International B.V.,

Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and InBev

Nederland N.V.

 

No.

   $             

CUSIP No.

     ISIN:    

Anheuser-Busch InBev Worldwide Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [    ] Dollars (or such other principal sum as shall be set forth on the Schedule attached hereto) on January 15, 2015 and to pay interest thereon from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on January 15 and July 15 in each year, commencing on July 15, 2010, at the rate of 4.125% per annum (subject to adjustment as provided herein) until the principal hereof is paid or made available for payment.

The interest so payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or

 

A-2


Exhibit A

 

one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the January 1 or July 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Subject to the terms of the Indenture, this Security is fully and unconditionally guaranteed as to all payments due hereon whether at the Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of the Guarantees and the Indenture.

Payments of principal of (and premium, if any) and interest on the Securities represented by this Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of this Security. Initially, the Paying Agent for the Securities will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal, premium, if any, and interest on the Securities represented by this Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

Notwithstanding any provision of this Security or the Indenture, the Company may make any and all payments of principal, premium (if any) and interest on this Security pursuant to the applicable procedures of the Depositary for this Security as permitted in the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

A-3


Exhibit A

 

I N W ITNESS W HEREOF , the Company has caused this instrument to be duly executed.

Dated:

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.
By  

 

  Name:
  Title:

 

Attest:

 

CERTIFICATE OF AUTHENTICATION

This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

 

THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as Trustee

By  

 

  Authorized Signatory

 

A-4


Exhibit A

 

[REVERSE OF SECURITY]

1. Securities and Indenture

This Security is one of a duly authorized issue of securities of the Company (herein called the “ Securities ”), issued and to be issued in one or more series under an Indenture, dated as of October 16, 2009 (the “Base Indenture”), as supplemented by the Second Supplemental Indenture, dated as of October 16, 2009 (the “ Second Supplemental Indenture ” and together with the Base Indenture, the “ Indenture ”), in each case among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “ Trustee ”, which term includes any successor trustee under the Base Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

2. Series and Denomination

This Security is one of the series designated on the face hereof, initially limited to an aggregate principal amount of $1,250,000,000, except as provided in the Indenture. References herein to “this series” mean the series of securities designated on the face hereof. Except as provided in the preceding paragraph, references herein to the “Securities” means (unless the context otherwise requires) the Securities of this series and includes any other securities issued, as provided in the Indenture and forming a single series with the Securities of this series.

The Securities are issuable only in registered form without coupons in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

3. Interest Rate Adjustment

The interest rate payable on the Securities will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Securities, as set forth below.

If the debt rating of the Securities from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Securities will increase from the interest rate otherwise payable on the day Securities are first issued (the “ Original Issue Date ”) by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Securities increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Securities will be taken into account for purposes of any interest rate adjustment.

 

A-5


Exhibit A

 

S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+

   Ba1    .25%

BB

   Ba2    .50%

BB-

   Ba3    .75%

B+

   B1    1.00%

B

   B2    1.25%

B-

   B3    1.50%

CCC+

   Caa    1.75%

CCC

   Ca    2.00%

If at any time the interest rate on the Securities has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Securities to any of the ratings set forth in the table above, the interest rate of the Securities will be decreased to the interest rate otherwise payable on the Securities on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Securities to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Securities BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Securities on the Original Issue Date.

If at any time during the term of the Securities, the Securities are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section will cease to apply and the effective interest rate on the Securities on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Securities.

Any increase or decrease in the interest rate pursuant to this Section will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Securities more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

4. Redemption at the Company’s Option

The Company may, at its option, redeem the Securities of this series as a whole or in part at any time upon not less than 30 nor more than 60 days prior notice at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the Securities to be redeemed and (ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 30 basis points; plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date.

 

A-6


Exhibit A

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

5. Repurchase at the Option of Holder Upon a Change in Control

In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice, in the form attached as Annex A (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Securities which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand, by registered mail, or by facsimile transmission to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

The Company shall not be required to redeem the Securities under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Securities properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Securities under this Section if it has otherwise exercised it rights to redeem the Securities in full or has defeased the Securities as described in the Indenture.

If, as a result of this Section, Holders of the Securities submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Securities outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire outstanding principal amount of the Securities on the Effective Date at the same price as for the Securities being redeem under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Notice of such redemption shall be given to the Holders of the Securities to be redeemed in the manner provided for in the Second Supplemental Indenture.

 

A-7


Exhibit A

 

The provisions set forth in this Section will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“ greffe du tribunal de commerce/griffie van de rechtbank van koophandel ”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Securities will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section have been approved (or unless and until such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Securities will decrease by the same amount.

6. Optional Tax Redemption

The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Securities in whole, but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a redemption price equal to 100% of the principal amount of the Securities then outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Securities may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Securities to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

Prior to the, mailing of any notice of redemption pursuant to this Section, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

A-8


Exhibit A

 

No notice of redemption pursuant to this Section may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Securities were then due.

7. Registration Rights

In addition to the rights set forth under the Indenture and the Second Supplemental Indenture, Holders of this Security will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc., (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

8. Additional Amounts

In the event that any Guarantor becomes obligated to make payments in respect of the Securities, such Guarantor will make all payments in respect of the Securities without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax (the “ Relevant Taxing Jurisdiction ”) unless such withholding or deduction is required by law. In such event, such Guarantor will pay to the Holders such additional amounts (the “ Additional Amounts ”) as shall be necessary in order that the net amounts received by the Holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:

(a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by such Guarantor from payment of principal or interest made by it, or

(b) are payable by reason of the Holder or beneficial owner having, or having had, some personal or business connection with such Relevant Taxing Jurisdiction and not merely by reason of the fact that payments in respect of the Securities or the Guarantees are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in the Relevant Taxing Jurisdiction, or

(c) are imposed or withheld by reason of the failure of the Holder or beneficial owner to provide certification, information, documents or other evidence concerning the nationality, residence, or identity of the Holder and beneficial owner or to make any valid or timely declaration or similar claim or satisfy any other reporting requirements relating to such matters, whether required or imposed by statute, treaty, regulation or administrative practice, as a precondition to exemption from, or a reduction in the rate of withholding or deduction of such taxes, or

(d) consist of any estate, inheritance, gift, sales, excise, transfer, personal property or similar taxes, or

 

A-9


Exhibit A

 

(e) are imposed on or with respect to any payment by the applicable Guarantor to the registered Holder if such Holder is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent that taxes would not have been imposed on such payment had such registered Holder been the sole beneficial owner of this Security, or

(f) are deducted or withheld pursuant to (i) any European Union directive or regulation concerning the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Relevant Taxing Jurisdiction or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such directive, regulation, treaty or understanding, or

(g) are payable by reason of a change in law or practice that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and written notice thereof is provided to the Holders, whichever occurs later, or

(h) are payable because any Security was presented to a particular paying agent for payment if the Security could have been presented to another paying agent without any such withholding or deduction, or

(i) are payable for any combination of (a) through (h) above.

References to principal or interest in respect of the Securities shall be deemed to include any Additional Amounts which may be payable as set forth in the Indenture.

The covenant regarding Additional Amounts shall not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States, and will apply to the Company any time it is incorporated in a jurisdiction outside of the United States.

9. Transfer and Exchange

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

A-10


Exhibit A

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

10. Default

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity and/or security, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity and/or security. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

11. Amendment, Modification and Waiver

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company or the Guarantors and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding (irrespective of series) that are to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

A-11


Exhibit A

 

12. Defeasance

The Indenture contains provisions for defeasance at any time of certain restrictive covenants and Events of Default with respect to this Security upon compliance with certain conditions set forth in the Indenture.

13. Governing Law

This Security shall be governed by and construed in accordance with the laws of the State of New York.

14. Defined Terms

All terms used in this Security which are defined in the Base Indenture, the Second Supplemental Indenture or the Registration Rights Agreement, shall have the meanings assigned to them in the Base Indenture, the Second Supplemental Indenture or the Registration Rights Agreement, as the case may be.

 

A-12


Exhibit A

 

ANNEX A

OPTION OF HOLDER TO ELECT PURCHASE

 

To: The Bank of New York Mellon Trust Company, N.A.

 

Cc: Anheuser-Busch InBev Worldwide Inc.

The undersigned registered owner of this Security acknowledges receipt of a notice from Anheuser-Busch InBev Worldwide Inc. (the “ Company ”) as to the occurrence of an Early Redemption Event and requests and instructs the Company to repay the registered holder hereof in accordance with the applicable provisions of the indenture, as supplemented, among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated October 16, 2009 , and the instructions below:

If you wish to have this Security purchased by the Company pursuant to Section 2.08 of the Second Supplemental Indenture among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors and the Trustee, dated October 16, 2009 (the “ Second Supplemental Indenture ”), check the following box:   ¨

If you wish to have a portion of this Security purchased by the Company pursuant to Section 2.08 of the Second Supplemental Indenture, state the amount:

$             

 

Dated:     Signature:
    Signature Guarantee:

(Sign exactly as your name appears on the other side of this Security)

Signatures must be guaranteed by an “Eligible Guarantor Institution” meeting the requirements of the Securities Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “Signature Guarantee Program” as may be determined by the Securities Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-13


Exhibit A

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

4.125% Notes due 2015

The initial principal amount of this Global Security is $[    ]. The following increases or decreases in this Global Security have been made:

 

Date of Exchange

  

Amount of decrease in

Principal Amount of this
Global Security

  

Amount of increase in

Principal Amount of this

Global Security

  

Principal Amount of this

Global Security following
such decrease or increase

  

Signature of authorized

signatory of Trustee or

Custodian

____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________
____________    ____________    ____________    ____________    ____________

 

A-14


Exhibit B

FORM OF GUARANTEE

For value received, the undersigned (herein called the “Guarantors”, and each, a “Guarantor” which terms include any successor Person or Persons under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby jointly and severally, irrevocably, fully and unconditionally guarantee to each Holder of this Security, which has been authenticated and delivered by the Trustee, the due and punctual payment of the principal of (including any amount in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), on this Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of this Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption or upon declaration of acceleration or otherwise according to the terms of this Security and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), interest (together with any Additional Amounts payable pursuant to the terms of this Security), sinking fund payment, or analogous obligation, each Guarantor agrees duly and punctually to pay the same. Each Guarantor hereby agrees that its obligations hereunder shall rank pari passu with all other unsecured and unsubordinated obligations of such Guarantor, shall be as principal and not merely as surety, and shall be absolute and unconditional irrespective of any extension of the time for payment of this Security, any modification of this Security, any invalidity, irregularity or unenforceability of this Security or the Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the Holder of this Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to this Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to this Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), thereon.

Each Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of a Holder against the Company with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other obligor with respect to such payment.

This Guarantee shall not be valid or become obligatory for any purpose with respect to this Security until the certificate of authentication on this Security shall have been signed by the Trustee.

This Guarantee is subject to the release upon the terms set forth in the Indenture.

This Guarantee is subject to certain limitations and waivers set forth in the Indenture, as it may be supplemented from time to time.

 

B-1


Exhibit B

 

This Guarantee is governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be signed by facsimile by its duly authorized officer or representative and, if required by applicable law, has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

 

[GUARANTOR(S)]
By:  

 

 

B-2

EXHIBIT 4.4

 

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

and

ANHEUSER-BUSCH INBEV NV/SA

and

the SUBSIDIARY GUARANTORS party hereto from time to time

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

THIRD SUPPLEMENTAL INDENTURE

Dated as of October 16, 2009

 

 

To the Indenture, dated as of October 16, 2009,

among Anheuser-Busch InBev Worldwide Inc.,

Anheuser-Busch InBev NV/SA, the Subsidiary Guarantors party thereto from time to time and

The Bank of New York Mellon Trust Company, N.A., Trustee

5.375% Notes due 2020

 

 


TABLE OF CONTENTS

 

          Page

ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

   2
SECTION 1.01    Definitions    2
SECTION 1.02    Effect of Headings    6
SECTION 1.03    Separability Clause    6
SECTION 1.04    Benefits of Instrument    6

ARTICLE II 5.375% NOTES DUE 2020

   6
SECTION 2.01    Creation of Series; Establishment of Form    6
SECTION 2.02    Guarantee    7
SECTION 2.03    Interest    7
SECTION 2.04    Payment of Principal, Interest and Other Amounts    8
SECTION 2.05    Interest Rate Adjustment    8
SECTION 2.06    Optional Redemption    9
SECTION 2.07    Optional Tax Redemption    10
SECTION 2.08    Holders’ Option to Require Repayment upon a Change in Control    11
SECTION 2.09    Registration Rights Agreement    12
SECTION 2.10    Registered Exchange Offer    12

ARTICLE III MISCELLANEOUS PROVISIONS

   13
SECTION 3.01    Effectiveness    13
SECTION 3.02    Original Issue    13
SECTION 3.03    Ratification and Integral Part    13
SECTION 3.04    Priority    13
SECTION 3.05    Successors and Assigns    13
SECTION 3.06    Counterparts    14
SECTION 3.07    Guarantee Limitations    14
SECTION 3.08    The Trustee    14
SECTION 3.09    Waiver of Claims    14
SECTION 3.10    Governing Law    14
EXHIBIT A       A-1
EXHIBIT B       B-1


THIRD SUPPLEMENTAL INDENTURE, dated as of October 16, 2009 (the “ Third Supplemental Indenture ”), among ANHEUSER-BUSCH INBEV WORLDWIDE INC., a corporation duly organized and existing under the laws of the State of Delaware (the “ Company ”), ANHEUSER-BUSCH INBEV NV/SA, a société anonyme duly organized and existing under the laws of the Kingdom of Belgium (the “ Parent Guarantor ”), ANHEUSER-BUSCH COMPANIES, INC., a corporation duly organized and existing under the laws of the State of Delaware, INBEV BELGIUM SA/NV, a public limited liability company organized and existing under Belgian law, BRANDBREW S.A., a public limited liability company organized and existing under Luxembourg law, COBREW NV/SA, a public limited liability company organized and existing under Belgian law, AB INBEV FRANCE S.A.S., a société par actions simplifiée organized and existing under French law, INTERBREW INTERNATIONAL B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, INTERBREW CENTRAL EUROPEAN HOLDING B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, NIMBUSPATH LIMITED, a private limited company organized and existing under English law, AMBREW S.A., a société anonyme organized and existing under Luxembourg law, INBEV NEDERLAND N.V., a limited liability company incorporated and existing under Dutch law with its corporate seat at Breda, the Netherlands (each, a “ Subsidiary Guarantor ”, and together with the Parent Guarantor, the “ Guarantors ”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”) to the Indenture, dated as of October 16, 2009, among the Company, the Guarantors and the Trustee (the “ Indenture ”).

RECITALS OF THE COMPANY AND THE GUARANTORS

WHEREAS, the Company, the Guarantors and the Trustee are parties to the Indenture, which provides for the issuance from time to time of unsecured debt securities of the Company;

WHEREAS, Section 901(9) of the Indenture permits supplements thereto without the consent of Holders of Securities to establish the form or terms of Securities of any series as permitted by Sections 201 and 301 of the Indenture;

WHEREAS, as contemplated by Section 301 of the Indenture, the Company intends to issue a new series of Securities to be known as the Company’s “5.375% Notes due 2020” (the “ Notes ”) under the Indenture;

WHEREAS, the Company and the Guarantors have taken all necessary corporate action to authorize the execution and delivery of this Third Supplemental Indenture;

 

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NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guarantors and the Trustee mutually agree as follows:

ARTICLE I

Definitions and Other Provisions of General Application

SECTION 1.01 Definitions.

Except as otherwise expressly provided or unless the context otherwise requires, all terms used in this Third Supplemental Indenture which are defined in the Indenture shall have the meanings ascribed to them by the Indenture. The following terms used in this Third Supplemental Indenture have the following respective meanings:

Acting in concert ” means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the acquisition directly or indirectly of shares in the Parent Guarantor by any of them, either directly or indirectly, to obtain Control of the Parent Guarantor.

Additional Interest ” has the meaning set forth in the Registration Rights Agreement.

Business Day ” means any day other than a day on which commercial banks or foreign exchange markets are permitted or required to be closed in New York City, London or Brussels.

Change in Tax Law ” has the meaning set forth in Section 2.07(a)

Change of Control ” means any person or group of persons acting in concert (in each case other than Stichting Anheuser-Busch InBev or any existing direct or indirect certificate holder or certificate holders of Stichting Anheuser-Busch InBev) gaining Control of the Parent Guarantor; provided that a change of control shall not be deemed to have occurred if all or substantially all of the shareholders of the relevant person or group of persons are, or immediately prior to the event which would otherwise have constituted a change of control were, the shareholders of the Parent Guarantor with the same (or substantially the same) pro rata interests in the share capital of the relevant person or group of persons as such shareholders have, or as the case may be, had, in the share capital of the Parent Guarantor.

Change of Control Announcement ” means the public announcement by the Parent Guarantor or any actual purchaser relating to a Change of Control.

Change of Control Period ” shall commence on the date of the Change of Control Announcement, but not later than on the date of the Change of Control, and shall end 60 days after the Change of Control (which period shall be extended with respect to a rating agency so long as the rating of the Notes is under publicly announced consideration for possible downgrade by that rating agency, such period not to exceed 60 days after the public announcement of such consideration).

Company ” has the meaning set forth in the first paragraph of this Third Supplemental Indenture.

 

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Comparable Treasury Issue ” means the U.S. Treasury security (not inflation-indexed) selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

Comparable Treasury Price ” means, with respect to a Redemption Date, (i) the average of five Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

Control ” in relation to any entity means either the direct or indirect ownership of more than 50 percent of the share capital or similar rights of ownership of the entity or the power to direct the management and the policies of the entity whether through the ownership of share capital, contract or otherwise.

Day Count Convention ” means that if an Interest Payment Date (other than in the case of the Stated Maturity of, or a Redemption Date for, the Notes) falls on a day that is not a Business Day, that Interest Payment Date will be postponed to the next succeeding Business Day unless that Business Day is in the next succeeding calendar month, in which case the Interest Payment Date will be the immediately preceding Business Day.

Depositary ” means The Depository Trust Company, or any successor thereto.

Early Redemption Event ” has the meaning set forth in Section 2.08(a).

Early Redemption Notice ” has the meaning set forth in Section 2.08(a)(ii).

Effective Date ” has the meaning set forth in Section 2.08(a)(i).

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Securities ” has the meaning set forth in the Registration Rights Agreement.

“Fitch” means Fitch, Inc.

Global Security ” has the meaning set forth in Section 2.01(d).

Guarantor ” has the meaning set forth in the first paragraph of this Third Supplemental Indenture.

Indenture ” has the meaning set forth in the first paragraph of this Third Supplemental Indenture.

 

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Independent Investment Banker ” means Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP Paribas Securities Corp. as specified by the Company, or if all of these firms are unwilling or unable to serve in that capacity, an independent investment banking institution of national standing in the United States appointed by the Company.

Interest Payment Date ” has the meaning set forth in Section 2.03.

Letter of Transmittal ” means the letter of transmittal to be prepared by the Company and sent to all Holders of Notes for use by such Holders in connection with the Exchange Offer.

Moody’s ” means Moody’s Investors Service, Inc.

Notes ” has the meaning set forth in the Recitals.

Original Issue Date ” means the date or dates on which the Notes are issued.

Parent Guarantor ” has the meaning set forth in the first paragraph of this Third Supplemental Indenture.

Ratings Downgrade ” shall occur if any two solicited credit ratings for the Parent Guarantor’s long-term unsecured debt fall below investment grade or if all three Rating Agencies (as defined below) cease to assign (other than temporarily) a credit rating to the Parent Guarantor. A credit rating below investment grade shall mean, in relation to Standard & Poor’s Rating Services, a rating of BB+ or below, in relation to Moody’s Investor Services Inc., a rating of Bal or below, in relation to Fitch, Inc. a rating of BB+ or below and, where another “nationally recognized statistical rating agency” has been designated by the Parent Guarantor, a comparable rating. A Ratings Downgrade shall not occur with respect to a particular Rating Agency in respect of a Change of Control unless the Rating Agency downgrading the Guarantor announces or publicly confirms or informs the Parent Guarantor in writing at its request that the downgrade was the result, in whole or in part, of the applicable Change of Control. If one or more Rating Agencies issues an improved credit rating for the Parent Guarantor prior to the Effective Date so that the circumstances giving rise to the Ratings Downgrade no longer apply, then the Ratings Downgrade shall be deemed not to have occurred and the Holders shall have no right to demand redemption of their Notes under Section 2.08.

Rating Agency ” means each of Standard & Poor’s Ratings Services, a Division of The McGraw Hill Companies, Inc., Fitch, Inc., or Moody’s Investors Services, Inc., their respective successors, or any other nationally recognized statistical rating agency designated by the Parent Guarantor.

Reference Treasury Dealer ” means (i) Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP Paribas Securities Corp. and their respective successors, provided , however , that if any of the foregoing shall cease to be a primary U.S. government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Company will substitute therefor another

 

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Primary Treasury Dealer and (ii) any three other Primary Treasury Dealers selected by the Company after consultation with the Independent Investment Banker.

Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

Registration Defaults ” has the meaning set forth in the Registration Rights Agreement.

Registration Rights Agreement ” has the meaning set forth in Section 2.09.

Regular Record Date ” means January 1 and July 1 (whether or not a Business Day).

Regulation S ” means Regulation S under the Securities Act of 1933, as amended.

Restricted Security ” means any Note that has not been transferred pursuant to an exemption from the Securities Act of 1933, as amended.

Rule 144A ” means Rule 144A under the Securities Act of 1933, as amended.

Standard & Poor’s ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

Stated Maturity ” has the meaning specified in Section 2.01(f).

Stichting Anheuser-Busch InBev ” means the foundation ( stichting ) incorporated under the laws of The Netherlands and registered with the Trade Register of the Chamber of Commerce under number 34144185 and with registered address at Hofplein 20, 3032AC, Rotterdam, The Netherlands, and its successors.

Third Supplemental Indenture ” has the meaning set forth in the Recitals.

Treasury Rate ” means, with respect to any Redemption Date:

(i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.l5(5l9)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. treasury securities adjusted to constant maturity under the caption “Treasury constant maturities — Nominal”, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of the Notes, yields for

 

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the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or

(ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

Trustee ” has the meaning set forth in the first paragraph of this Third Supplemental Indenture.

SECTION 1.02 Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 1.03 Separability Clause.

In case any provision in this Third Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.04 Benefits of Instrument.

Nothing in this Third Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Third Supplemental Indenture or the Indenture.

ARTICLE II

5.375% Notes due 2020

SECTION 2.01 Creation of Series; Establishment of Form .

(a) There is hereby established a new series of Securities under the Indenture entitled “5.375% Notes due 2020”.

(b) The form of the Notes, including the form of the certificate of authentication, is attached hereto as Exhibit A. Any Restricted Security shall include the legends set forth on the face of Exhibit A, substantially in the form so set forth.

(c) The Company shall issue the Notes in an aggregate principal amount of $2,250,000,000. The Company may from time to time, without the consent of the Holders of the

 

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Notes, issue additional Notes in accordance with Sections 301 and 901 of the Indenture. Any such additional Notes subsequently issued shall rank equally and ratably with the Notes in all respects (except for the payment of interest accruing prior to the issue date of such further Notes or except for the first payment of interest following the issue date of such further Notes), so that such further Notes shall be consolidated and form a single series with the Notes and shall have the same terms as to status, redemption or otherwise as the Notes.

(d) The Notes shall be offered and sold in reliance on Rule 144A and/or Regulation S and shall be issued initially in the form of one or more permanent global securities, without coupons, registered in the name of the Depositary or a nominee of the Depositary (each, a “ Global Security ”) and deposited with the Trustee, as custodian for the Depositary. Any proposed transfer of an interest in the Notes shall consist of a transfer in a Global Security and shall be effected through the book-entry system maintained by the Depositary and in accordance with Section 305 of the Indenture.

(e) The Notes shall not have a sinking fund.

(f) The stated maturity of the principal of the Notes shall be January 15, 2020 (the “ Stated Maturity ”).

(g) The outstanding principal amount of the Note shall accrue interest at a rate equal to 5.375%, as provided in Section 2.03.

(h) The Notes shall be issued in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

(1) The Notes shall be subject to both Defeasance and Covenant Defeasance in accordance with the Indenture.

(i) The Notes shall be senior unsecured obligations of the Company and will rank equally with all other existing and future unsecured and unsubordinated debt obligations of the Company.

SECTION 2.02 Guarantee . Subject to the terms and applicable limitations set forth in the Indenture and the form of Notes, the Notes shall be jointly and severally, irrevocably, fully and unconditionally guaranteed by the Guarantors as to all payments due on the Notes whether at their Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of such Guarantees and the Indenture. In the case of the failure of the Company to pay punctually any principal, premium or interest on the Notes, the Guarantors shall cause any such payment to be made as it becomes due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise. The Guarantees shall be unsecured and unsubordinated indebtedness of the Guarantors and rank equally with other unsecured and unsubordinated indebtedness of the Guarantors that is currently outstanding or that it may issue in the future.

 

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SECTION 2.03 Interest. Subject to any adjustment pursuant to Section 2.05 or Section 2.09 of this Third Supplemental Indenture, the Notes shall bear interest at a rate equal to 5.375% per annum computed on the basis of a 360-day year consisting of twelve (12) 30-day months. Interest will accrue from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be. Interest is payable semi-annually on January 15 and July 15 of each year (each, an “ Interest Payment Date ”), commencing July 15, 2010, and until full repayment of the outstanding principal of the Notes, to the Person in whose name the Notes were registered at the close of business on the Regular Record Date until the principal thereof is paid or made available for payment, subject to Section 2.05(a) below (except that payment of interest due at the Stated Maturity or on a Redemption Date will be made to the Person to whom payment of the principal of the Notes will be made).

SECTION 2.04 Payment of Principal, Interest and Other Amounts . Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of the Global Security. Initially, the Paying Agent for the Notes will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders of the Notes, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

SECTION 2.05 Interest Rate Adjustment .

(a) The interest rate applicable on the Original Issue Date shall be 5.375%. The interest rate payable on the Notes will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Notes, as set forth below.

(b) If the debt rating of the Notes from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Notes will increase from the interest rate otherwise payable on the Original Issue Date by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Notes increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Notes will be taken into account for purposes of any interest rate adjustment.

 

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S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+

   Ba1    .25%

BB

   Ba2    .50%

BB-

   Ba3    .75%

B+

   B1    1.00%

B

   B2    1.25%

B-

   B3    1.50%

CCC+

   Caa    1.75%

CCC

   Ca    2.00%

(c) If at any time the interest rate on the Notes has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Notes to any of the ratings set forth in the table above, the interest rate of the Notes will be decreased to the interest rate otherwise payable on the Notes on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Notes to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Notes BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Notes at the date of their issuance.

(d) If at any time during the term of the Notes, the Notes are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section 2.05 will cease to apply and the effective interest rate on the Notes on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Notes.

(e) Any increase or decrease in the interest rate pursuant to this Section 2.05 will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Notes more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

SECTION 2.06 Optional Redemption.

(a) The Company may, at its option, redeem the Notes as a whole or in part at any time upon not less than 30 nor more than 60 days’ prior notice, as provided in Section 1104 the Indenture, at a redemption price equal to the greater of:

(i) 100% of the aggregate principal amount of the Notes to be redeemed; and

 

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(ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points;

plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date. The Treasury Rate will be calculated on the third Business Day preceding such Redemption Date.

(b) Unless the Company (and/or a Guarantor) defaults on payment of the Redemption Price, from and after the Redemption Date interest will cease to accrue on the Notes or portions thereof called for redemption. On the Redemption Date, the Company will deposit with the Trustee or with one or more Paying Agents (or, if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in the Indenture) money sufficient to pay the Redemption Price of and accrued interest on the Notes to be redeemed on such date.

(c) If fewer than all of the Notes are to be redeemed, the Trustee will select, not more than 60 days prior to the Redemption Date, the particular Notes or portions thereof for redemption from the outstanding Notes not previously called for redemption, on a pro rata basis or by such method as the Trustee deems fair and appropriate.

SECTION 2.07 Optional Tax Redemption .

(a) The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Notes in whole but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a Redemption Price equal to 100% of the principal amount of the Notes then Outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Notes may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Notes to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

(b) Prior to the mailing of any notice of redemption pursuant to this Section 2.07, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

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(c) No notice of redemption pursuant to this Section 2.07 may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Notes were then due.

SECTION 2.08 Holders’ Option to Require Repayment upon a Change in Control .

(a) In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Notes which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

(b) Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand or by registered mail to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

(c) The Company shall not be required to redeem the Notes under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Notes properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Notes under this Section if it has otherwise exercised its rights to redeem the Notes in full pursuant to this Third Supplemental Indenture or has defeased the Notes as described in the Indenture.

(d) If, as a result of this Section 2.08, Holders of the Notes submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Notes Outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire Outstanding principal amount of the Notes on the Effective Date at the same price as for the Notes being redeemed under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Irrevocable notice of such

 

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redemption shall be given to the Holders of the Notes in accordance with Section 1104 of the Indenture by the Company, or at the Company’s request, by the Trustee, in the name and at the expense of the Company, in each case as soon as practicable after receipt by the Trustee of the foregoing notice from the Company.

(e) The provisions set forth in this Section 2.08 will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section 2.08 is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“greffe du tribunal de commerce/griffie van de rechtbank van koophandel”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section 2.08 by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Notes will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section 2.08 have been approved (or if such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Notes will decrease by the same amount.

SECTION 2.09 Registration Rights Agreement. In addition to the rights set forth under the Indenture and this Third Supplemental Indenture, Holders of the Notes will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc. (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

SECTION 2.10 Registered Exchange Offer. Upon the consummation of the Exchange Offer in accordance with the Registration Rights Agreement, the Company will issue and, upon receipt of a Company Order in accordance with Section 303 of the Indenture, the Trustee will authenticate:

(a) one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Securities accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer; and

(b) Unrestricted Certificated Securities in an aggregate principal amount equal to the principal amount of the Restricted Certificated Securities accepted for exchange in

 

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the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer.

Concurrently with the issuance of such Securities, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Securities to be reduced accordingly, and the Company will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Certificated Securities so accepted Unrestricted Certificated Securities in the appropriate principal amount.

All Exchange Securities issued and authenticated in accordance with the above shall be part of the same series as any Outstanding Notes and shall vote and consent, together with any Outstanding Notes as one class, on all matters that require their vote or consent under the Indenture or this Third Supplemental Indenture, except in the case of any matter that affects only the Outstanding Notes or only the Exchange Securities.

ARTICLE III

Miscellaneous Provisions

SECTION 3.01 Effectiveness . This Third Supplemental Indenture will become effective upon its execution and delivery

SECTION 3.02 Original Issue . The Notes may, upon execution of this Third Supplemental Indenture, be executed by the Company and delivered by the Company and the Parent Guarantor to the Trustee for authentication, and the Trustee shall, upon Company order, authenticate and deliver such Notes as in such Company order provided.

SECTION 3.03 Ratification and Integral Part . The Indenture as supplemented by this Third Supplemental Indenture, is in all respects ratified and confirmed, and this Third Supplemental Indenture will be deemed an integral part of the Indenture in the manner and to the extent herein and therein provided.

SECTION 3.04 Priority . This Third Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this Third Supplemental Indenture shall, subject to the terms hereof, supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith.

SECTION 3.05 Successors and Assigns . All covenants and agreements in the Indenture, as supplemented and amended by this Third Supplemental Indenture, by the Company and the Guarantors will bind their respective successors and assigns, whether so expressed or not.

 

- 13 -


SECTION 3.06 Counterparts . This Third Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 3.07 Guarantee Limitations . The limitations applicable to the Guarantees, as set forth in Section 209 of the Indenture, will apply to the Guarantees issued hereunder, provided that any further limitations, or any amendments or modifications to such Guarantees or limitations thereon, shall be set forth in an additional supplemental indenture, in each case in accordance with the Indenture.

SECTION 3.08 The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Third Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company and the Guarantors.

SECTION 3.09 Waiver of Claims . Without prejudice to any provisions of this Third Supplemental Indenture, each Guarantor hereby irrevocably and unconditionally waives any right it may have at any time or claim under Jersey law: (a) whether by virtue of the droit de discussion or otherwise to require that recourse be had by the Trustee or any holder of the Notes to the assets of any other person before any claim is enforced against such Guarantor in respect of the obligations assumed by it under this Third Supplemental Indenture or any Guarantee; and (b) whether by virtue of the droit de division or otherwise to require that any liability under this Third Supplemental Indenture or any Guarantee be divided or apportioned with any other person or reduced in any manner whatsoever.

SECTION 3.10 Governing Law . This Third Supplemental Indenture and the Notes and Guarantees will be governed by and construed in accordance with the laws of the State of New York.

 

- 14 -


IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

A NHEUSER -B USCH I N B EV W ORLDWIDE I NC .

as Company

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance

A NHEUSER -B USCH I N B EV NV/SA

as Parent Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis Van de Perre

  Name: Jean-Louis Van de Perre
  Title: VP Tax

T HE B ANK OF N EW Y ORK M ELLON T RUST C OMPANY , N.A.,

as Trustee

By:  

/s/ Kerry A. McFarland

  Name: Kerry A. McFarland
  Title: Vice President


A NHEUSER -B USCH C OMPANIES , I NC .

As Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance

I N B EV B ELGIUM SA/NV

as Subsidiary Guarantor

By:  

/s/ Erland Van Vreckem

  Name: Erland Van Vreckem
  Title: Legal Director, Benelux

B RAND B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696, as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance


AB I N B EV F RANCE S.A.S.

as Subsidiary Guarantor

By:  

/s/ Emilie Ruyant

  Name: Emilie Ruyant
  Title: Legal Director

I NTERBREW I NTERNATIONAL B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title: Tax Director
By:  

/s/ Lisebeth Hellemans

  Name: Lisebeth Hellemans
  Title: Senior Legal Counsel, Corporate Finance and Governance

I NTERBREW C ENTRAL E UROPEAN H OLDING B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title: Tax Director

N IMBUSPATH L IMITED

as Subsidiary Guarantor

By:  

/s/ Claude Bahoshy

  Name: Claude Bahoshy
  Title: Director


A M B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525 as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance

C O B REW NV/SA

as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance
By:  

/s/ C. Delhaye

  Name: C. Delhaye
  Title:

I N B EV N EDERLAND N.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title: Tax Director


Exhibit A

FORM OF NOTES

[FACE OF SECURITY]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ANHEUSER-BUSCH INBEV WORLDWIDE INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF (I) IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION, (II) WITHIN THE UNITED STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, PERSONS OTHER THAN “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (III) OUTSIDE THE UNITED STATES OTHER THAN TO PERSONS WHO ARE NOT U.S. PERSONS IN OFFSHORE TRANSACTIONS IN ACCORDANCE WITH THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT. EACH PERSON ACQUIRING AN OWNERSHIP INTEREST IN THIS SECURITY (1) SHALL BE DEEMED TO REPRESENT AND WARRANT THAT IT IS EITHER (A) A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) AND IS OUTSIDE THE UNITED STATES OR (C) ACQUIRING SUCH OWNERSHIP INTEREST PURSUANT TO A VALID REGISTRATION STATEMENT OR IN ANOTHER TRANSACTION EXEMPT FROM SUCH REGISTRATION; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT IN ACCORDANCE WITH THE FOREGOING RESTRICTIONS, AND IN ANY CASE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE

 

A-1


Exhibit A

 

UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION; (3) PRIOR TO SUCH TRANSFER, AGREES THAT IT WILL FURNISH TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS REGISTRAR (OR A SUCCESSOR REGISTRAR, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY AND THE REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “UNITED STATES”, “U.S. PERSON” AND “OFFSHORE TRANSACTION” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

Anheuser-Busch InBev Worldwide Inc.

5.375% Note due 2020

Payment of Principal, Premium, if any,

and Interest Irrevocably, Fully and Unconditionally Guaranteed by

Anheuser-Busch InBev NV/SA, Anheuser-Busch Companies, Inc., InBev Belgium SA/NV,

BrandBrew S.A., Cobrew NV/SA, AB InBev France S.A.S., Interbrew International B.V.,

Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and InBev

Nederland N.V.

 

No.    $             
CUSIP No.    ISIN:

Anheuser-Busch InBev Worldwide Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [    ] Dollars (or such other principal sum as shall be set forth on the Schedule attached hereto) on January 15, 2020 and to pay interest thereon from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on January 15 and July 15 in each year, commencing on July 15, 2010, at the rate of 5.375% per annum (subject to adjustment as provided herein) until the principal hereof is paid or made available for payment.

The interest so payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or

 

A-2


Exhibit A

 

one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the January 1 or July 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Subject to the terms of the Indenture, this Security is fully and unconditionally guaranteed as to all payments due hereon whether at the Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of the Guarantees and the Indenture.

Payments of principal of (and premium, if any) and interest on the Securities represented by this Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of this Security. Initially, the Paying Agent for the Securities will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal, premium, if any, and interest on the Securities represented by this Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

Notwithstanding any provision of this Security or the Indenture, the Company may make any and all payments of principal, premium (if any) and interest on this Security pursuant to the applicable procedures of the Depositary for this Security as permitted in the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

A-3


Exhibit A

 

I N W ITNESS W HEREOF , the Company has caused this instrument to be duly executed.

Dated:

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.
By  

 

  Name:
  Title:

 

Attest:

 

CERTIFICATE OF AUTHENTICATION

This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By  

 

  Authorized Signatory

 

A-4


Exhibit A

 

[REVERSE OF SECURITY]

1. Securities and Indenture

This Security is one of a duly authorized issue of securities of the Company (herein called the “ Securities ”), issued and to be issued in one or more series under an Indenture, dated as of October 16, 2009 (the “Base Indenture”), as supplemented by the Third Supplemental Indenture, dated as of October 16, 2009 (the “ Third Supplemental Indenture ” and together with the Base Indenture, the “ Indenture ”), in each case among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “ Trustee ”, which term includes any successor trustee under the Base Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

2. Series and Denomination

This Security is one of the series designated on the face hereof, initially limited to an aggregate principal amount of $2,250,000,000, except as provided in the Indenture. References herein to “this series” mean the series of securities designated on the face hereof. Except as provided in the preceding paragraph, references herein to the “Securities” means (unless the context otherwise requires) the Securities of this series and includes any other securities issued, as provided in the Indenture and forming a single series with the Securities of this series.

The Securities are issuable only in registered form without coupons in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

3. Interest Rate Adjustment

The interest rate payable on the Securities will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Securities, as set forth below.

If the debt rating of the Securities from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Securities will increase from the interest rate otherwise payable on the day Securities are first issued (the “ Original Issue Date ”) by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Securities increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Securities will be taken into account for purposes of any interest rate adjustment.

 

A-5


Exhibit A

 

S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+

   Ba1    .25%

BB

   Ba2    .50%

BB-

   Ba3    .75%

B+

   B1    1.00%

B

   B2    1.25%

B-

   B3    1.50%

CCC+

   Caa    1.75%

CCC

   Ca    2.00%

If at any time the interest rate on the Securities has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Securities to any of the ratings set forth in the table above, the interest rate of the Securities will be decreased to the interest rate otherwise payable on the Securities on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Securities to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Securities BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Securities on the Original Issue Date.

If at any time during the term of the Securities, the Securities are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section will cease to apply and the effective interest rate on the Securities on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Securities.

Any increase or decrease in the interest rate pursuant to this Section will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Securities more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

4. Redemption at the Company’s Option

The Company may, at its option, redeem the Securities of this series as a whole or in part at any time upon not less than 30 nor more than 60 days prior notice at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the Securities to be redeemed and (ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points; plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date.

 

A-6


Exhibit A

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

5. Repurchase at the Option of Holder Upon a Change in Control

In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice, in the form attached as Annex A (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Securities which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand, by registered mail, or by facsimile transmission to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

The Company shall not be required to redeem the Securities under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Securities properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Securities under this Section if it has otherwise exercised it rights to redeem the Securities in full or has defeased the Securities as described in the Indenture.

If, as a result of this Section, Holders of the Securities submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Securities outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire outstanding principal amount of the Securities on the Effective Date at the same price as for the Securities being redeem under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Notice of such redemption shall be given to the Holders of the Securities to be redeemed in the manner provided for in the Third Supplemental Indenture.

 

A-7


Exhibit A

 

The provisions set forth in this Section will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“ greffe du tribunal de commerce/griffie van de rechtbank van koophandel ”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Securities will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section have been approved (or unless and until such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Securities will decrease by the same amount.

6. Optional Tax Redemption

The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Securities in whole, but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a redemption price equal to 100% of the principal amount of the Securities then outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Securities may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Securities to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

Prior to the, mailing of any notice of redemption pursuant to this Section, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

A-8


Exhibit A

 

No notice of redemption pursuant to this Section may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Securities were then due.

7. Registration Rights

In addition to the rights set forth under the Indenture and the Third Supplemental Indenture, Holders of this Security will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc., (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

8. Additional Amounts

In the event that any Guarantor becomes obligated to make payments in respect of the Securities, such Guarantor will make all payments in respect of the Securities without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax (the “ Relevant Taxing Jurisdiction ”) unless such withholding or deduction is required by law. In such event, such Guarantor will pay to the Holders such additional amounts (the “ Additional Amounts ”) as shall be necessary in order that the net amounts received by the Holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:

(a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by such Guarantor from payment of principal or interest made by it, or

(b) are payable by reason of the Holder or beneficial owner having, or having had, some personal or business connection with such Relevant Taxing Jurisdiction and not merely by reason of the fact that payments in respect of the Securities or the Guarantees are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in the Relevant Taxing Jurisdiction, or

(c) are imposed or withheld by reason of the failure of the Holder or beneficial owner to provide certification, information, documents or other evidence concerning the nationality, residence, or identity of the Holder and beneficial owner or to make any valid or timely declaration or similar claim or satisfy any other reporting requirements relating to such matters, whether required or imposed by statute, treaty, regulation or administrative practice, as a precondition to exemption from, or a reduction in the rate of withholding or deduction of such taxes, or

(d) consist of any estate, inheritance, gift, sales, excise, transfer, personal property or similar taxes, or

 

A-9


Exhibit A

 

(e) are imposed on or with respect to any payment by the applicable Guarantor to the registered Holder if such Holder is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent that taxes would not have been imposed on such payment had such registered Holder been the sole beneficial owner of this Security, or

(f) are deducted or withheld pursuant to (i) any European Union directive or regulation concerning the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Relevant Taxing Jurisdiction or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such directive, regulation, treaty or understanding, or

(g) are payable by reason of a change in law or practice that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and written notice thereof is provided to the Holders, whichever occurs later, or

(h) are payable because any Security was presented to a particular paying agent for payment if the Security could have been presented to another paying agent without any such withholding or deduction, or

(i) are payable for any combination of (a) through (h) above.

References to principal or interest in respect of the Securities shall be deemed to include any Additional Amounts which may be payable as set forth in the Indenture.

The covenant regarding Additional Amounts shall not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States, and will apply to the Company any time it is incorporated in a jurisdiction outside of the United States.

9. Transfer and Exchange

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

A-10


Exhibit A

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

10. Default

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity and/or security, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity and/or security. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

11. Amendment, Modification and Waiver

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company or the Guarantors and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding (irrespective of series) that are to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

A-11


Exhibit A

 

12. Defeasance

The Indenture contains provisions for defeasance at any time of certain restrictive covenants and Events of Default with respect to this Security upon compliance with certain conditions set forth in the Indenture.

13. Governing Law

This Security shall be governed by and construed in accordance with the laws of the State of New York.

14. Defined Terms

All terms used in this Security which are defined in the Base Indenture, the Third Supplemental Indenture or the Registration Rights Agreement, shall have the meanings assigned to them in the Base Indenture, the Third Supplemental Indenture or the Registration Rights Agreement, as the case may be.

 

A-12


Exhibit A

 

ANNEX A

OPTION OF HOLDER TO ELECT PURCHASE

 

To:    The Bank of New York Mellon Trust Company, N.A.
Cc:    Anheuser-Busch InBev Worldwide Inc.

The undersigned registered owner of this Security acknowledges receipt of a notice from Anheuser-Busch InBev Worldwide Inc. (the “ Company ”) as to the occurrence of an Early Redemption Event and requests and instructs the Company to repay the registered holder hereof in accordance with the applicable provisions of the indenture, as supplemented, among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated October 16, 2009 , and the instructions below:

If you wish to have this Security purchased by the Company pursuant to Section 2.08 of the Third Supplemental Indenture among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors and the Trustee, dated October 16, 2009 (the “ Third Supplemental Indenture ”), check the following box:     ¨

If you wish to have a portion of this Security purchased by the Company pursuant to Section 2.08 of the Third Supplemental Indenture, state the amount:

$                     

 

Dated:      Signature:
     Signature Guarantee:

(Sign exactly as your name appears on the other side of this Security)

Signatures must be guaranteed by an “Eligible Guarantor Institution” meeting the requirements of the Securities Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “Signature Guarantee Program” as may be determined by the Securities Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-13


Exhibit A

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

5.375% Notes due 2020

The initial principal amount of this Global Security is $[            ]. The following increases or decreases in this Global Security have been made:

 

Date of

Exchange

   Amount of decrease in
Principal Amount

of this Global
Security
   Amount of increase in
Principal Amount of this
Global Security
   Principal
Amount of this
Global Security

following such
decrease or
increase
   Signature of authorized
signatory of Trustee or
Custodian
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           

 

A-14


Exhibit B

 

FORM OF GUARANTEE

For value received, the undersigned (herein called the “Guarantors”, and each, a “Guarantor” which terms include any successor Person or Persons under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby jointly and severally, irrevocably, fully and unconditionally guarantee to each Holder of this Security, which has been authenticated and delivered by the Trustee, the due and punctual payment of the principal of (including any amount in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), on this Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of this Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption or upon declaration of acceleration or otherwise according to the terms of this Security and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), interest (together with any Additional Amounts payable pursuant to the terms of this Security), sinking fund payment, or analogous obligation, each Guarantor agrees duly and punctually to pay the same. Each Guarantor hereby agrees that its obligations hereunder shall rank pari passu with all other unsecured and unsubordinated obligations of such Guarantor, shall be as principal and not merely as surety, and shall be absolute and unconditional irrespective of any extension of the time for payment of this Security, any modification of this Security, any invalidity, irregularity or unenforceability of this Security or the Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the Holder of this Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to this Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to this Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), thereon.

Each Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of a Holder against the Company with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other obligor with respect to such payment.

This Guarantee shall not be valid or become obligatory for any purpose with respect to this Security until the certificate of authentication on this Security shall have been signed by the Trustee.

This Guarantee is subject to the release upon the terms set forth in the Indenture.

This Guarantee is subject to certain limitations and waivers set forth in the Indenture, as it may be supplemented from time to time.

 

B-1


Exhibit B

 

This Guarantee is governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be signed by facsimile by its duly authorized officer or representative and, if required by applicable law, has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

 

[GUARANTOR(S)]
By:  

 

 

B-2

EXHIBIT 4.5

 

 

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

and

ANHEUSER-BUSCH INBEV NV/SA

and

the SUBSIDIARY GUARANTORS party hereto from time to time

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

FOURTH SUPPLEMENTAL INDENTURE

Dated as of October 16, 2009

 

 

To the Indenture, dated as of October 16, 2009,

among Anheuser-Busch InBev Worldwide Inc.,

Anheuser-Busch InBev NV/SA, the Subsidiary Guarantors party thereto from time to time and

The Bank of New York Mellon Trust Company, N.A., Trustee

6.375% Notes due 2040

 

 

 


TABLE OF CONTENTS

 

          Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION    2

SECTION 1.01

   Definitions    2

SECTION 1.02

   Effect of Headings    6

SECTION 1.03

   Separability Clause    6

SECTION 1.04

   Benefits of Instrument    6
ARTICLE II 6.375% NOTES DUE 2040    6

SECTION 2.01

   Creation of Series; Establishment of Form    6

SECTION 2.02

   Guarantee    7

SECTION 2.03

   Interest    8

SECTION 2.04

   Payment of Principal, Interest and Other Amounts    8

SECTION 2.05

   Interest Rate Adjustment    8

SECTION 2.06

   Optional Redemption    9

SECTION 2.07

   Optional Tax Redemption    10

SECTION 2.08

   Holders’ Option to Require Repayment upon a Change in Control    11

SECTION 2.09

   Registration Rights Agreement    12

SECTION 2.10

   Registered Exchange Offer    12
ARTICLE III MISCELLANEOUS PROVISIONS    13

SECTION 3.01

   Effectiveness    13

SECTION 3.02

   Original Issue    13

SECTION 3.03

   Ratification and Integral Part    13

SECTION 3.04

   Priority    13

SECTION 3.05

   Successors and Assigns    13

SECTION 3.06

   Counterparts    14

SECTION 3.07

   Guarantee Limitations    14

SECTION 3.08

   The Trustee    14

SECTION 3.09

   Waiver of Claims    14

SECTION 3.10

   Governing Law    14

EXHIBIT A

      A-1

EXHIBIT B

      B-1


FOURTH SUPPLEMENTAL INDENTURE, dated as of October 16, 2009 (the “ Fourth Supplemental Indenture ”), among ANHEUSER-BUSCH INBEV WORLDWIDE INC., a corporation duly organized and existing under the laws of the State of Delaware (the “ Company ”), ANHEUSER-BUSCH INBEV NV/SA, a société anonyme duly organized and existing under the laws of the Kingdom of Belgium (the “ Parent Guarantor ”), ANHEUSER-BUSCH COMPANIES, INC., a corporation duly organized and existing under the laws of the State of Delaware, INBEV BELGIUM SA/NV, a public limited liability company organized and existing under Belgian law, BRANDBREW S.A., a public limited liability company organized and existing under Luxembourg law, COBREW NV/SA, a public limited liability company organized and existing under Belgian law, AB INBEV FRANCE S.A.S., a société par actions simplifiée organized and existing under French law, INTERBREW INTERNATIONAL B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, INTERBREW CENTRAL EUROPEAN HOLDING B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, NIMBUSPATH LIMITED, a private limited company organized and existing under English law, AMBREW S.A., a société anonyme organized and existing under Luxembourg law, INBEV NEDERLAND N.V., a limited liability company incorporated and existing under Dutch law with its corporate seat at Breda, the Netherlands (each, a “ Subsidiary Guarantor ”, and together with the Parent Guarantor, the “ Guarantors ”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”) to the Indenture, dated as of October 16, 2009, among the Company, the Guarantors and the Trustee (the “ Indenture ”).

RECITALS OF THE COMPANY AND THE GUARANTORS

WHEREAS, the Company, the Guarantors and the Trustee are parties to the Indenture, which provides for the issuance from time to time of unsecured debt securities of the Company;

WHEREAS, Section 901(9) of the Indenture permits supplements thereto without the consent of Holders of Securities to establish the form or terms of Securities of any series as permitted by Sections 201 and 301 of the Indenture;

WHEREAS, as contemplated by Section 301 of the Indenture, the Company intends to issue a new series of Securities to be known as the Company’s “6.375% Notes due 2040” (the “ Notes ”) under the Indenture;

WHEREAS, the Company and the Guarantors have taken all necessary corporate action to authorize the execution and delivery of this Fourth Supplemental Indenture;

 

- 1 -


NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guarantors and the Trustee mutually agree as follows:

ARTICLE I

Definitions and Other Provisions of General Application

SECTION 1.01 Definitions .

Except as otherwise expressly provided or unless the context otherwise requires, all terms used in this Fourth Supplemental Indenture which are defined in the Indenture shall have the meanings ascribed to them by the Indenture. The following terms used in this Fourth Supplemental Indenture have the following respective meanings:

Acting in concert ” means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the acquisition directly or indirectly of shares in the Parent Guarantor by any of them, either directly or indirectly, to obtain Control of the Parent Guarantor.

Additional Interest ” has the meaning set forth in the Registration Rights Agreement.

Business Day ” means any day other than a day on which commercial banks or foreign exchange markets are permitted or required to be closed in New York City, London or Brussels.

Change in Tax Law ” has the meaning set forth in Section 2.07(a)

Change of Control ” means any person or group of persons acting in concert (in each case other than Stichting Anheuser-Busch InBev or any existing direct or indirect certificate holder or certificate holders of Stichting Anheuser-Busch InBev) gaining Control of the Parent Guarantor; provided that a change of control shall not be deemed to have occurred if all or substantially all of the shareholders of the relevant person or group of persons are, or immediately prior to the event which would otherwise have constituted a change of control were, the shareholders of the Parent Guarantor with the same (or substantially the same) pro rata interests in the share capital of the relevant person or group of persons as such shareholders have, or as the case may be, had, in the share capital of the Parent Guarantor.

Change of Control Announcement ” means the public announcement by the Parent Guarantor or any actual purchaser relating to a Change of Control.

Change of Control Period ” shall commence on the date of the Change of Control Announcement, but not later than on the date of the Change of Control, and shall end 60 days after the Change of Control (which period shall be extended with respect to a rating agency so long as the rating of the Notes is under publicly announced consideration for possible downgrade by that rating agency, such period not to exceed 60 days after the public announcement of such consideration).

Company ” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

 

- 2 -


Comparable Treasury Issue ” means the U.S. Treasury security (not inflation-indexed) selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

Comparable Treasury Price ” means, with respect to a Redemption Date, (i) the average of five Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

Control ” in relation to any entity means either the direct or indirect ownership of more than 50 percent of the share capital or similar rights of ownership of the entity or the power to direct the management and the policies of the entity whether through the ownership of share capital, contract or otherwise.

Day Count Convention ” means that if an Interest Payment Date (other than in the case of the Stated Maturity of, or a Redemption Date for, the Notes) falls on a day that is not a Business Day, that Interest Payment Date will be postponed to the next succeeding Business Day unless that Business Day is in the next succeeding calendar month, in which case the Interest Payment Date will be the immediately preceding Business Day.

Depositary ” means The Depository Trust Company, or any successor thereto.

Early Redemption Event ” has the meaning set forth in Section 2.08(a).

Early Redemption Notice ” has the meaning set forth in Section 2.08(a)(ii).

Effective Date ” has the meaning set forth in Section 2.08(a)(i).

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Securities ” has the meaning set forth in the Registration Rights Agreement.

“Fitch” means Fitch, Inc.

Fourth Supplemental Indenture ” has the meaning set forth in the Recitals.

Global Security ” has the meaning set forth in Section 2.01(d).

Guarantor ” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

 

- 3 -


Indenture ” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

Independent Investment Banker ” means Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP Paribas Securities Corp. as specified by the Company, or if all of these firms are unwilling or unable to serve in that capacity, an independent investment banking institution of national standing in the United States appointed by the Company.

Interest Payment Date ” has the meaning set forth in Section 2.03.

Letter of Transmittal ” means the letter of transmittal to be prepared by the Company and sent to all Holders of Notes for use by such Holders in connection with the Exchange Offer.

Moody’s ” means Moody’s Investors Service, Inc.

Notes ” has the meaning set forth in the Recitals.

Original Issue Date ” means the date or dates on which the Notes are issued.

Parent Guarantor ” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

Ratings Downgrade ” shall occur if any two solicited credit ratings for the Parent Guarantor’s long-term unsecured debt fall below investment grade or if all three Rating Agencies (as defined below) cease to assign (other than temporarily) a credit rating to the Parent Guarantor. A credit rating below investment grade shall mean, in relation to Standard & Poor’s Rating Services, a rating of BB+ or below, in relation to Moody’s Investor Services Inc., a rating of Bal or below, in relation to Fitch, Inc. a rating of BB+ or below and, where another “nationally recognized statistical rating agency” has been designated by the Parent Guarantor, a comparable rating. A Ratings Downgrade shall not occur with respect to a particular Rating Agency in respect of a Change of Control unless the Rating Agency downgrading the Guarantor announces or publicly confirms or informs the Parent Guarantor in writing at its request that the downgrade was the result, in whole or in part, of the applicable Change of Control. If one or more Rating Agencies issues an improved credit rating for the Parent Guarantor prior to the Effective Date so that the circumstances giving rise to the Ratings Downgrade no longer apply, then the Ratings Downgrade shall be deemed not to have occurred and the Holders shall have no right to demand redemption of their Notes under Section 2.08.

Rating Agency ” means each of Standard & Poor’s Ratings Services, a Division of The McGraw Hill Companies, Inc., Fitch, Inc., or Moody’s Investors Services, Inc., their respective successors, or any other nationally recognized statistical rating agency designated by the Parent Guarantor.

Reference Treasury Dealer ” means (i) Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. or BNP

 

- 4 -


Paribas Securities Corp. and their respective successors, provided , however , that if any of the foregoing shall cease to be a primary U.S. government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer and (ii) any three other Primary Treasury Dealers selected by the Company after consultation with the Independent Investment Banker.

Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

Registration Defaults ” has the meaning set forth in the Registration Rights Agreement.

Registration Rights Agreement ” has the meaning set forth in Section 2.09.

Regular Record Date ” means January 1 and July 1 (whether or not a Business Day).

Regulation S ” means Regulation S under the Securities Act of 1933, as amended.

Restricted Security ” means any Note that has not been transferred pursuant to an exemption from the Securities Act of 1933, as amended.

Rule 144A ” means Rule 144A under the Securities Act of 1933, as amended.

Standard & Poor’s ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

Stated Maturity ” has the meaning specified in Section 2.01(f).

Stichting Anheuser-Busch InBev ” means the foundation ( stichting ) incorporated under the laws of The Netherlands and registered with the Trade Register of the Chamber of Commerce under number 34144185 and with registered address at Hofplein 20, 3032AC, Rotterdam, The Netherlands, and its successors.

Treasury Rate ” means, with respect to any Redemption Date:

(i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.l5(5l9)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. treasury securities adjusted to constant maturity under the caption “Treasury constant maturities — Nominal”, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is

 

- 5 -


within three months before or after the remaining term of the Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or

(ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

Trustee ” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

SECTION 1.02 Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 1.03 Separability Clause.

In case any provision in this Fourth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.04 Benefits of Instrument.

Nothing in this Fourth Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Fourth Supplemental Indenture or the Indenture.

ARTICLE II

6.375% Notes due 2040

SECTION 2.01 Creation of Series; Establishment of Form .

(a) There is hereby established a new series of Securities under the Indenture entitled “6.375% Notes due 2040”.

(b) The form of the Notes, including the form of the certificate of authentication, is attached hereto as Exhibit A. Any Restricted Security shall include the legends set forth on the face of Exhibit A, substantially in the form so set forth.

 

- 6 -


(c) The Company shall issue the Notes in an aggregate principal amount of $500,000,000. The Company may from time to time, without the consent of the Holders of the Notes, issue additional Notes in accordance with Sections 301 and 901 of the Indenture. Any such additional Notes subsequently issued shall rank equally and ratably with the Notes in all respects (except for the payment of interest accruing prior to the issue date of such further Notes or except for the first payment of interest following the issue date of such further Notes), so that such further Notes shall be consolidated and form a single series with the Notes and shall have the same terms as to status, redemption or otherwise as the Notes.

(d) The Notes shall be offered and sold in reliance on Rule 144A and/or Regulation S and shall be issued initially in the form of one or more permanent global securities, without coupons, registered in the name of the Depositary or a nominee of the Depositary (each, a “ Global Security ”) and deposited with the Trustee, as custodian for the Depositary. Any proposed transfer of an interest in the Notes shall consist of a transfer in a Global Security and shall be effected through the book-entry system maintained by the Depositary and in accordance with Section 305 of the Indenture.

(e) The Notes shall not have a sinking fund.

(f) The stated maturity of the principal of the Notes shall be January 15, 2040 (the “ Stated Maturity ”).

(g) The outstanding principal amount of the Note shall accrue interest at a rate equal to 6.375%, as provided in Section 2.03.

(h) The Notes shall be issued in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

(1) The Notes shall be subject to both Defeasance and Covenant Defeasance in accordance with the Indenture.

(i) The Notes shall be senior unsecured obligations of the Company and will rank equally with all other existing and future unsecured and unsubordinated debt obligations of the Company.

SECTION 2.02 Guarantee . Subject to the terms and applicable limitations set forth in the Indenture and the form of Notes, the Notes shall be jointly and severally, irrevocably, fully and unconditionally guaranteed by the Guarantors as to all payments due on the Notes whether at their Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of such Guarantees and the Indenture. In the case of the failure of the Company to pay punctually any principal, premium or interest on the Notes, the Guarantors shall cause any such payment to be made as it becomes due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise. The Guarantees shall be unsecured and unsubordinated indebtedness of the Guarantors and rank equally with other unsecured and unsubordinated indebtedness of the Guarantors that is currently outstanding or that it may issue in the future.

 

- 7 -


SECTION 2.03 Interest. Subject to any adjustment pursuant to Section 2.05 or Section 2.09 of this Fourth Supplemental Indenture, the Notes shall bear interest at a rate equal to 6.375% per annum computed on the basis of a 360-day year consisting of twelve (12) 30-day months. Interest will accrue from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be. Interest is payable semi-annually on January 15 and July 15 of each year (each, an “ Interest Payment Date ”), commencing July 15, 2010, and until full repayment of the outstanding principal of the Notes, to the Person in whose name the Notes were registered at the close of business on the Regular Record Date until the principal thereof is paid or made available for payment, subject to Section 2.05(a) below (except that payment of interest due at the Stated Maturity or on a Redemption Date will be made to the Person to whom payment of the principal of the Notes will be made).

SECTION 2.04 Payment of Principal, Interest and Other Amounts . Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of the Global Security. Initially, the Paying Agent for the Notes will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders of the Notes, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal of, premium, if any, and interest on the Notes represented by a Global Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

SECTION 2.05 Interest Rate Adjustment .

(a) The interest rate applicable on the Original Issue Date shall be 6.375%. The interest rate payable on the Notes will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Notes, as set forth below.

(b) If the debt rating of the Notes from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Notes will increase from the interest rate otherwise payable on the Original Issue Date by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Notes increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Notes will be taken into account for purposes of any interest rate adjustment.

 

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S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+

   Ba1    .25%

BB

   Ba2    .50%

BB-

   Ba3    .75%

B+

   B1    1.00%

B

   B2    1.25%

B-

   B3    1.50%

CCC+

   Caa    1.75%

CCC

   Ca    2.00%

(c) If at any time the interest rate on the Notes has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Notes to any of the ratings set forth in the table above, the interest rate of the Notes will be decreased to the interest rate otherwise payable on the Notes on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Notes to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Notes BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Notes at the date of their issuance.

(d) If at any time during the term of the Notes, the Notes are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section 2.05 will cease to apply and the effective interest rate on the Notes on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Notes.

(e) Any increase or decrease in the interest rate pursuant to this Section 2.05 will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Notes more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

SECTION 2.06 Optional Redemption.

(a) The Company may, at its option, redeem the Notes as a whole or in part at any time upon not less than 30 nor more than 60 days’ prior notice, as provided in Section 1104 the Indenture, at a redemption price equal to the greater of:

(i) 100% of the aggregate principal amount of the Notes to be redeemed; and

 

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(ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points;

plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date. The Treasury Rate will be calculated on the third Business Day preceding such Redemption Date.

(b) Unless the Company (and/or a Guarantor) defaults on payment of the Redemption Price, from and after the Redemption Date interest will cease to accrue on the Notes or portions thereof called for redemption. On the Redemption Date, the Company will deposit with the Trustee or with one or more Paying Agents (or, if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in the Indenture) money sufficient to pay the Redemption Price of and accrued interest on the Notes to be redeemed on such date.

(c) If fewer than all of the Notes are to be redeemed, the Trustee will select, not more than 60 days prior to the Redemption Date, the particular Notes or portions thereof for redemption from the outstanding Notes not previously called for redemption, on a pro rata basis or by such method as the Trustee deems fair and appropriate.

SECTION 2.07 Optional Tax Redemption .

(a) The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Notes in whole but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a Redemption Price equal to 100% of the principal amount of the Notes then Outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Notes may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Notes to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

(b) Prior to the mailing of any notice of redemption pursuant to this Section 2.07, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

- 10 -


(c) No notice of redemption pursuant to this Section 2.07 may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Notes were then due.

SECTION 2.08 Holders’ Option to Require Repayment upon a Change in Control .

(a) In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Notes which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

(b) Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand or by registered mail to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

(c) The Company shall not be required to redeem the Notes under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Notes properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Notes under this Section if it has otherwise exercised its rights to redeem the Notes in full pursuant to this Fourth Supplemental Indenture or has defeased the Notes as described in the Indenture.

(d) If, as a result of this Section 2.08, Holders of the Notes submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Notes Outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire Outstanding principal amount of the Notes on the Effective Date at the same price as for the Notes being redeemed under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Irrevocable notice of such

 

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redemption shall be given to the Holders of the Notes in accordance with Section 1104 of the Indenture by the Company, or at the Company’s request, by the Trustee, in the name and at the expense of the Company, in each case as soon as practicable after receipt by the Trustee of the foregoing notice from the Company.

(e) The provisions set forth in this Section 2.08 will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section 2.08 is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“greffe du tribunal de commerce/griffie van de rechtbank van koophandel”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section 2.08 by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Notes will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section 2.08 have been approved (or if such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Notes will decrease by the same amount.

SECTION 2.09 Registration Rights Agreement. In addition to the rights set forth under the Indenture and this Fourth Supplemental Indenture, Holders of the Notes will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc. (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

SECTION 2.10 Registered Exchange Offer. Upon the consummation of the Exchange Offer in accordance with the Registration Rights Agreement, the Company will issue and, upon receipt of a Company Order in accordance with Section 303 of the Indenture, the Trustee will authenticate:

(a) one or more Unrestricted Global Securities in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Securities accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer; and

(b) Unrestricted Certificated Securities in an aggregate principal amount equal to the principal amount of the Restricted Certificated Securities accepted for exchange in

 

- 12 -


the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (i) they are not affiliates (as defined in Rule 405 of the Securities Act) of the Company (ii) they are not a broker-dealer tendering Notes acquired directly from the Company for its own account, (iii) they have acquired the Exchange Securities in the ordinary course of such Person’s business and (iv) they have no arrangements or understandings with any other Person participating in the Exchange Offer for the purposes of distributing the Exchange Securities and (v) they are not prohibited by any law or policy from participating in the Exchange Offer.

Concurrently with the issuance of such Securities, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Securities to be reduced accordingly, and the Company will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Certificated Securities so accepted Unrestricted Certificated Securities in the appropriate principal amount.

All Exchange Securities issued and authenticated in accordance with the above shall be part of the same series as any Outstanding Notes and shall vote and consent, together with any Outstanding Notes as one class, on all matters that require their vote or consent under the Indenture or this Fourth Supplemental Indenture, except in the case of any matter that affects only the Outstanding Notes or only the Exchange Securities.

ARTICLE III

Miscellaneous Provisions

SECTION 3.01 Effectiveness. This Fourth Supplemental Indenture will become effective upon its execution and delivery

SECTION 3.02 Original Issue. The Notes may, upon execution of this Fourth Supplemental Indenture, be executed by the Company and delivered by the Company and the Parent Guarantor to the Trustee for authentication, and the Trustee shall, upon Company order, authenticate and deliver such Notes as in such Company order provided.

SECTION 3.03 Ratification and Integral Part. The Indenture as supplemented by this Fourth Supplemental Indenture, is in all respects ratified and confirmed, and this Fourth Supplemental Indenture will be deemed an integral part of the Indenture in the manner and to the extent herein and therein provided.

SECTION 3.04 Priority. This Fourth Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this Fourth Supplemental Indenture shall, subject to the terms hereof, supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith.

SECTION 3.05 Successors and Assigns. All covenants and agreements in the Indenture, as supplemented and amended by this Fourth Supplemental Indenture, by the Company and the Guarantors will bind their respective successors and assigns, whether so expressed or not.

 

- 13 -


SECTION 3.06 Counterparts. This Fourth Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 3.07 Guarantee Limitations. The limitations applicable to the Guarantees, as set forth in Section 209 of the Indenture, will apply to the Guarantees issued hereunder, provided that any further limitations, or any amendments or modifications to such Guarantees or limitations thereon, shall be set forth in an additional supplemental indenture, in each case in accordance with the Indenture.

SECTION 3.08 The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fourth Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company and the Guarantors.

SECTION 3.09 Waiver of Claims. Without prejudice to any provisions of this Fourth Supplemental Indenture, each Guarantor hereby irrevocably and unconditionally waives any right it may have at any time or claim under Jersey law: (a) whether by virtue of the droit de discussion or otherwise to require that recourse be had by the Trustee or any holder of the Notes to the assets of any other person before any claim is enforced against such Guarantor in respect of the obligations assumed by it under this Fourth Supplemental Indenture or any Guarantee; and (b) whether by virtue of the droit de division or otherwise to require that any liability under this Fourth Supplemental Indenture or any Guarantee be divided or apportioned with any other person or reduced in any manner whatsoever.

SECTION 3.10 Governing Law. This Fourth Supplemental Indenture and the Notes and Guarantees will be governed by and construed in accordance with the laws of the State of New York.

 

- 14 -


IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

A NHEUSER -B USCH I N B EV W ORLDWIDE I NC .

as Company

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance

A NHEUSER -B USCH I N B EV NV/SA

as Parent Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis de Perre

  Name: Jean-Louis de Perre
  Title: VP tax

T HE B ANK OF N EW Y ORK M ELLON T RUST C OMPANY , N.A.,

as Trustee

By:  

/s/ Kerry A. McFarland

  Name: Kerry A. McFarland
  Title: Vice President


A NHEUSER -B USCH C OMPANIES , I NC .

As Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance

I N B EV B ELGIUM SA/NV

as Subsidiary Guarantor

By:  

/s/ Erland Van Vreckem

  Name: Erland Van Vreckem
  Title: Legal Director Benelux
By:  

/s/ Vincent Borreman

  Name: Vincent Borreman
  Title: Senior Legal Counsel

B RAND B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696, as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance


AB I N B EV F RANCE S.A.S.

as Subsidiary Guarantor

By:  

/s/ Emilie Ruyant

  Name: Emilie Ruyant
  Title: Legal Director

I NTERBREW I NTERNATIONAL B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title: Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title: Senior Legal Counsel, Corporate Finance Governance

I NTERBREW C ENTRAL E UROPEAN H OLDING B.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title: Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title: Senior Legal Counsel, Corporate Finance Governance

N IMBUSPATH L IMITED

as Subsidiary Guarantor

By:  

/s/ Claude Bahoshy

  Name: Claude Bahoshy
  Title: Director


A M B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525 as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance

C O B REW NV/SA

as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title: VP Legal Corporate and Compliance
By:  

/s/ C. Delhaye

  Name: C. Delhaye
  Title:

I N B EV N EDERLAND N.V.

as Subsidiary Guarantor

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title: Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title: Senior Legal Counsel, Corporate Finance Governance


Exhibit A

 

FORM OF NOTES

[FACE OF SECURITY]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ANHEUSER-BUSCH INBEV WORLDWIDE INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF (I) IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION, (II) WITHIN THE UNITED STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, PERSONS OTHER THAN “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (III) OUTSIDE THE UNITED STATES OTHER THAN TO PERSONS WHO ARE NOT U.S. PERSONS IN OFFSHORE TRANSACTIONS IN ACCORDANCE WITH THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT. EACH PERSON ACQUIRING AN OWNERSHIP INTEREST IN THIS SECURITY (1) SHALL BE DEEMED TO REPRESENT AND WARRANT THAT IT IS EITHER (A) A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) AND IS OUTSIDE THE UNITED STATES OR (C) ACQUIRING SUCH OWNERSHIP INTEREST PURSUANT TO A VALID REGISTRATION STATEMENT OR IN ANOTHER TRANSACTION EXEMPT FROM SUCH REGISTRATION; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT IN ACCORDANCE WITH THE FOREGOING RESTRICTIONS, AND IN ANY CASE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE

 

A-1


Exhibit A

 

UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION; (3) PRIOR TO SUCH TRANSFER, AGREES THAT IT WILL FURNISH TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS REGISTRAR (OR A SUCCESSOR REGISTRAR, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY AND THE REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “UNITED STATES”, “U.S. PERSON” AND “OFFSHORE TRANSACTION” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

Anheuser-Busch InBev Worldwide Inc.

6.375% Note due 2040

Payment of Principal, Premium, if any,

and Interest Irrevocably, Fully and Unconditionally Guaranteed by

Anheuser-Busch InBev NV/SA, Anheuser-Busch Companies, Inc., InBev Belgium SA/NV,

BrandBrew S.A., Cobrew NV/SA, AB InBev France S.A.S., Interbrew International B.V.,

Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and InBev

Nederland N.V.

 

No.   $             

CUSIP No.

  ISIN:

Anheuser-Busch InBev Worldwide Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [    ] Dollars (or such other principal sum as shall be set forth on the Schedule attached hereto) on January 15, 2040 and to pay interest thereon from October 16, 2009 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on January 15 and July 15 in each year, commencing on July 15, 2010, at the rate of 6.375% per annum (subject to adjustment as provided herein) until the principal hereof is paid or made available for payment.

The interest so payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or

 

A-2


Exhibit A

 

one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the January 1 or July 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Subject to the terms of the Indenture, this Security is fully and unconditionally guaranteed as to all payments due hereon whether at the Stated Maturity, by acceleration, redemption, repayment or otherwise in accordance with the terms of the Guarantees and the Indenture.

Payments of principal of (and premium, if any) and interest on the Securities represented by this Security shall be made through one or more Paying Agents appointed under the Indenture to the Depositary or its nominee, as the Holder of this Security. Initially, the Paying Agent for the Securities will be The Bank of New York Mellon Trust Company, N.A. The Company may change the Paying Agent or Registrar without prior notice to the Holders, and in such an event the Company may act as Paying Agent or Registrar. Payments of principal, premium, if any, and interest on the Securities represented by this Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent.

Notwithstanding any provision of this Security or the Indenture, the Company may make any and all payments of principal, premium (if any) and interest on this Security pursuant to the applicable procedures of the Depositary for this Security as permitted in the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

A-3


Exhibit A

 

I N W ITNESS W HEREOF , the Company has caused this instrument to be duly executed.

Dated:

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.
By  

 

  Name:
  Title:

 

    Attest:
 

 

CERTIFICATE OF AUTHENTICATION

This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

 

THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as Trustee

By

 

 

  Authorized Signatory

 

A-4


Exhibit A

 

[REVERSE OF SECURITY]

1. Securities and Indenture

This Security is one of a duly authorized issue of securities of the Company (herein called the “ Securities ”), issued and to be issued in one or more series under an Indenture, dated as of October 16, 2009 (the “Base Indenture”), as supplemented by the Fourth Supplemental Indenture, dated as of October 16, 2009 (the “ Fourth Supplemental Indenture ” and together with the Base Indenture, the “ Indenture ”), in each case among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “ Trustee ”, which term includes any successor trustee under the Base Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

2. Series and Denomination

This Security is one of the series designated on the face hereof, initially limited to an aggregate principal amount of $500,000,000, except as provided in the Indenture. References herein to “this series” mean the series of securities designated on the face hereof. Except as provided in the preceding paragraph, references herein to the “Securities” means (unless the context otherwise requires) the Securities of this series and includes any other securities issued, as provided in the Indenture and forming a single series with the Securities of this series.

The Securities are issuable only in registered form without coupons in denominations of $2,000 in principal amount and integral multiples of $1,000 in excess thereof.

3. Interest Rate Adjustment

The interest rate payable on the Securities will be subject to adjustment from time to time if any of the three Rating Agencies downgrades (or subsequently upgrades) its rating assigned to the Securities, as set forth below.

If the debt rating of the Securities from any one or more of the three Ratings Agencies is decreased to a rating set forth in the table below, the interest rate of the Securities will increase from the interest rate otherwise payable on the day Securities are first issued (the “ Original Issue Date ”) by the sum of the rates set forth in the table below opposite that rating level (calculated per agency), provided that , at no time shall the interest rate of the Securities increase by more than 2.00%, irrespective of ratings, from the original interest rate effective on the Original Issue Date; provided further that only the two lowest ratings assigned to the Securities will be taken into account for purposes of any interest rate adjustment.

 

A-5


Exhibit A

 

S&P/Fitch

  

Moody’s

  

Adjustment from Original

Interest Rate (per Rating

Agency)

BB+

   Ba1    .25%

BB

   Ba2    .50%

BB-

   Ba3    .75%

B+

   B1    1.00%

B

   B2    1.25%

B-

   B3    1.50%

CCC+

   Caa    1.75%

CCC

   Ca    2.00%

If at any time the interest rate on the Securities has been increased as a result of a Ratings Downgrade by a Rating Agency and such Rating Agency subsequently increases its rating of the Securities to any of the ratings set forth in the table above, the interest rate of the Securities will be decreased to the interest rate otherwise payable on the Securities on the Original Issue Date plus the sum of the applicable interest rates set forth opposite the ratings in the table above. If any of the Rating Agencies subsequently increases its rating of the Securities to better than BB+/Ba1 or its equivalent, the adjustment from the original interest rate attributable to that Rating Agency shall no longer apply, and unless one or more other Rating Agencies rates the Securities BB+/Ba1 or lower, the interest rate shall revert to the interest rate payable on the Securities on the Original Issue Date.

If at any time during the term of the Securities, the Securities are rated A-/A-3 or above by any two of the Rating Agencies, the provisions described in this Section will cease to apply and the effective interest rate on the Securities on the Original Issue Date will remain in effect until the Stated Maturity or redemption of the Securities.

Any increase or decrease in the interest rate pursuant to this Section will take effect from the first Business Day of the interest period during which a rating change requiring an adjustment in the interest rate occurs. If any Rating Agency changes its rating of the Securities more than once during any particular interest period, the last such change to occur will control in the event of a conflict. The term “interest period” shall mean the period from and including an Interest Payment Date to and excluding the next succeeding Interest Payment Date, or in connection with the first interest period, the period from and including the Original Issue Date to and excluding the first Interest Payment Date.

4. Redemption at the Company’s Option

The Company may, at its option, redeem the Securities of this series as a whole or in part at any time upon not less than 30 nor more than 60 days prior notice at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the Securities to be redeemed and (ii) as determined by the Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points; plus, in each case described above, accrued and unpaid interest on the principal amount being redeemed to (but excluding) such Redemption Date.

 

A-6


Exhibit A

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

5. Repurchase at the Option of Holder Upon a Change in Control

In the event that (a) a Change of Control occurs, and (b) within the Change of Control Period, a Ratings Downgrade in respect of that Change of Control occurs (an “ Early Redemption Event ”):

(i) the Company will (A) within 30 days after becoming aware of the Early Redemption Event, provide written notice thereof to the Holders, and (B) determine and provide written notice of the effective date for the purposes of early repayment (the “ Effective Date ”). The Effective Date must be a Business Day not less than 60 and not more than 90 days after the giving of the notice regarding the Early Redemption Event pursuant to subparagraph (i)(A); and

(ii) any Holder may, by submitting a redemption notice, in the form attached as Annex A (the “ Early Redemption Notice ”), demand from the Company repayment as of the Effective Date of any (in integral multiples of $1,000 (provided that the unrepurchased portion must be in a principal amount of at least $2,000)) or all of its Securities which have not otherwise been declared due for early redemption, at a repurchase price in cash of 101% of their principal amount plus interest accrued until (but excluding) the Effective Date (and all Additional Amounts, if any).

Any Early Redemption Notice shall be made in writing in English and shall be delivered by hand, by registered mail, or by facsimile transmission to the Trustee not less than 30 days prior to the Effective Date at its specified office. The Early Redemption Notice must be accompanied by evidence showing that the relevant Holder is the Holder of the relevant Note(s) at the time the Early Redemption Notice is delivered. Such evidence may be provided in the form of a certificate issued by any custodian or in any other suitable manner. Early Redemption Notices shall be irrevocable.

The Company shall not be required to redeem the Securities under this Section following an Early Redemption Event if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all the Securities properly tendered and not withdrawn under its offer. The Company will also not be required to redeem the Securities under this Section if it has otherwise exercised it rights to redeem the Securities in full or has defeased the Securities as described in the Indenture.

If, as a result of this Section, Holders of the Securities submit Early Redemption Notices in respect of at least 85% of the aggregate principal amount of the Securities outstanding, the Company shall have the ability by notice to the Trustee to redeem the entire outstanding principal amount of the Securities on the Effective Date at the same price as for the Securities being redeem under this Section. Such notice shall be irrevocable and shall be given to the Trustee no later than 15 days prior to the Effective Date. Notice of such redemption shall be given to the Holders of the Securities to be redeemed in the manner provided for in the Fourth Supplemental Indenture.

 

A-7


Exhibit A

 

The provisions set forth in this Section will not be effective unless and until they are approved substantially in the form provided herein by a resolution of the general meeting of shareholders of the Parent Guarantor. The Parent Guarantor will procure that a resolution to approve the terms of this Section is presented to the shareholders of the Parent Guarantor at the first annual general meeting after October 16, 2009 and at each successive annual general meeting of the Parent Guarantor thereafter until such resolution is approved and immediately following approval of such resolution the Parent Guarantor will cause a copy thereof to be filed with the Clerk of the Commercial Court of Brussels (“ greffe du tribunal de commerce/griffie van de rechtbank van koophandel ”). The Parent Guarantor will notify the Trustee promptly after each shareholder meeting of the results of the vote on the proposed resolution. If the general meeting of shareholders of the Parent Guarantor does not approve the provisions set forth in this Section by the date that is eighteen (18) months following the Original Issue Date, the interest rate applicable to the Securities will increase by 0.25% with effect from the next following day until the date that the Parent Guarantor notifies the Trustee that the provisions of this Section have been approved (or unless and until such approval is no longer required in order for the Change in Control Clause to be effective), following which the interest rate applicable to the Securities will decrease by the same amount.

6. Optional Tax Redemption

The Company may, at the Company’s or the Parent Guarantor’s option, redeem the Securities in whole, but not in part, upon not less than thirty (30) nor more than sixty (60) days’ prior notice, at a redemption price equal to 100% of the principal amount of the Securities then outstanding plus accrued and unpaid interest on the principal amount being redeemed (and all Additional Amounts, if any) to (but excluding) the Redemption Date, if (i) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of a jurisdiction in which the Company or any Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax, or in the interpretation, application or administration or any such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) which becomes effective on or after the Original Issue Date (any such change or amendment, a “ Change in Tax Law ”), the Company or, if a payment were then due under a Guarantee, the relevant Guarantor, would be required to pay Additional Amounts and (ii) such obligation cannot be avoided by the Company or the relevant Guarantor taking reasonable measures available to it; provided, however, that the Securities may not be redeemed to the extent such Additional Amounts arise solely as a result of the Company assigning its obligations under the Securities to a Substitute Company, unless such assignment to a Substitute Company is undertaken as part of a plan of merger by the Parent Guarantor.

Prior to the, mailing of any notice of redemption pursuant to this Section, the Company or the relevant Guarantor will deliver to the Trustee an opinion of independent tax counsel of recognized standing to the effect that the Company or the relevant Guarantor is or would be obligated to pay such Additional Amounts as a result in such Change in Tax Law.

 

A-8


Exhibit A

 

No notice of redemption pursuant to this Section may be given earlier that ninety (90) days prior to the earliest date on which the Company or the relevant Guarantor would be obligated to pay Additional Amounts if a payment in respect of the Securities were then due.

7. Registration Rights

In addition to the rights set forth under the Indenture and the Fourth Supplemental Indenture, Holders of this Security will have all the rights set forth in the Registration Rights Agreement, dated as of October 16, 2009, between the Company, the Guarantors, J.P. Morgan Securities Inc., Banc of America Securities LLC and Deutsche Bank Securities Inc., (the “ Registration Rights Agreement ”), including the right to receive Additional Interest upon the occurrence of certain Registration Defaults.

8. Additional Amounts

In the event that any Guarantor becomes obligated to make payments in respect of the Securities, such Guarantor will make all payments in respect of the Securities without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of any jurisdiction in which such Guarantor is incorporated, organized, or otherwise tax resident or any political subdivision or any authority thereof or therein having power to tax (the “ Relevant Taxing Jurisdiction ”) unless such withholding or deduction is required by law. In such event, such Guarantor will pay to the Holders such additional amounts (the “ Additional Amounts ”) as shall be necessary in order that the net amounts received by the Holders, after such withholding or deduction, shall equal the respective amounts of principal and interest which would otherwise have been receivable in the absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:

(a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by such Guarantor from payment of principal or interest made by it, or

(b) are payable by reason of the Holder or beneficial owner having, or having had, some personal or business connection with such Relevant Taxing Jurisdiction and not merely by reason of the fact that payments in respect of the Securities or the Guarantees are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in the Relevant Taxing Jurisdiction, or

(c) are imposed or withheld by reason of the failure of the Holder or beneficial owner to provide certification, information, documents or other evidence concerning the nationality, residence, or identity of the Holder and beneficial owner or to make any valid or timely declaration or similar claim or satisfy any other reporting requirements relating to such matters, whether required or imposed by statute, treaty, regulation or administrative practice, as a precondition to exemption from, or a reduction in the rate of withholding or deduction of such taxes, or

(d) consist of any estate, inheritance, gift, sales, excise, transfer, personal property or similar taxes, or

 

A-9


Exhibit A

 

(e) are imposed on or with respect to any payment by the applicable Guarantor to the registered Holder if such Holder is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent that taxes would not have been imposed on such payment had such registered Holder been the sole beneficial owner of this Security, or

(f) are deducted or withheld pursuant to (i) any European Union directive or regulation concerning the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Relevant Taxing Jurisdiction or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such directive, regulation, treaty or understanding, or

(g) are payable by reason of a change in law or practice that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and written notice thereof is provided to the Holders, whichever occurs later, or

(h) are payable because any Security was presented to a particular paying agent for payment if the Security could have been presented to another paying agent without any such withholding or deduction, or

(i) are payable for any combination of (a) through (h) above.

References to principal or interest in respect of the Securities shall be deemed to include any Additional Amounts which may be payable as set forth in the Indenture.

The covenant regarding Additional Amounts shall not apply to any Guarantor at any time when such Guarantor is incorporated in a jurisdiction in the United States, and will apply to the Company any time it is incorporated in a jurisdiction outside of the United States.

9. Transfer and Exchange

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

A-10


Exhibit A

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

10. Default

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity and/or security, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity and/or security. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

11. Amendment, Modification and Waiver

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company or the Guarantors and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding (irrespective of series) that are to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

A-11


Exhibit A

 

12. Defeasance

The Indenture contains provisions for defeasance at any time of certain restrictive covenants and Events of Default with respect to this Security upon compliance with certain conditions set forth in the Indenture.

13. Governing Law

This Security shall be governed by and construed in accordance with the laws of the State of New York.

14. Defined Terms

All terms used in this Security which are defined in the Base Indenture, the Fourth Supplemental Indenture or the Registration Rights Agreement, shall have the meanings assigned to them in the Base Indenture, the Fourth Supplemental Indenture or the Registration Rights Agreement, as the case may be.

 

A-12


Exhibit A

 

ANNEX A

OPTION OF HOLDER TO ELECT PURCHASE

 

To: The Bank of New York Mellon Trust Company, N.A.

 

Cc: Anheuser-Busch InBev Worldwide Inc.

The undersigned registered owner of this Security acknowledges receipt of a notice from Anheuser-Busch InBev Worldwide Inc. (the “ Company ”) as to the occurrence of an Early Redemption Event and requests and instructs the Company to repay the registered holder hereof in accordance with the applicable provisions of the indenture, as supplemented, among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated October 16, 2009 , and the instructions below:

If you wish to have this Security purchased by the Company pursuant to Section 2.08 of the Fourth Supplemental Indenture among the Company, Anheuser-Busch InBev NV/SA, as Parent Guarantor, the Subsidiary Guarantors and the Trustee, dated October 16, 2009 (the “ Fourth Supplemental Indenture ”), check the following box:     q

If you wish to have a portion of this Security purchased by the Company pursuant to Section 2.08 of the Fourth Supplemental Indenture, state the amount:

$             

 

Dated:   Signature:
  Signature Guarantee:

(Sign exactly as your name appears on the other side of this Security)

Signatures must be guaranteed by an “Eligible Guarantor Institution” meeting the requirements of the Securities Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “Signature Guarantee Program” as may be determined by the Securities Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-13


Exhibit A

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

6.375% Notes due 2040

The initial principal amount of this Global Security is $[            ]. The following increases or decreases in this Global Security have been made:

 

Date of Exchange

  

Amount of decrease in
Principal Amount of this
Global Security

  

Amount of increase in
Principal Amount of this
Global Security

  

Principal Amount of this
Global Security following
such decrease or increase

  

Signature of authorized
signatory of Trustee or
Custodian

                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     

 

A-14


Exhibit B

FORM OF GUARANTEE

For value received, the undersigned (herein called the “Guarantors”, and each, a “Guarantor” which terms include any successor Person or Persons under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby jointly and severally, irrevocably, fully and unconditionally guarantee to each Holder of this Security, which has been authenticated and delivered by the Trustee, the due and punctual payment of the principal of (including any amount in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), on this Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of this Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption or upon declaration of acceleration or otherwise according to the terms of this Security and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), interest (together with any Additional Amounts payable pursuant to the terms of this Security), sinking fund payment, or analogous obligation, each Guarantor agrees duly and punctually to pay the same. Each Guarantor hereby agrees that its obligations hereunder shall rank pari passu with all other unsecured and unsubordinated obligations of such Guarantor, shall be as principal and not merely as surety, and shall be absolute and unconditional irrespective of any extension of the time for payment of this Security, any modification of this Security, any invalidity, irregularity or unenforceability of this Security or the Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the Holder of this Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to this Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to this Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium and interest (together with any Additional Amounts payable pursuant to the terms of this Security), thereon.

Each Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of a Holder against the Company with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other obligor with respect to such payment.

This Guarantee shall not be valid or become obligatory for any purpose with respect to this Security until the certificate of authentication on this Security shall have been signed by the Trustee.

This Guarantee is subject to the release upon the terms set forth in the Indenture.

This Guarantee is subject to certain limitations and waivers set forth in the Indenture, as it may be supplemented from time to time.

 

B-1


Exhibit B

 

This Guarantee is governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be signed by facsimile by its duly authorized officer or representative and, if required by applicable law, has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

 

[GUARANTOR(S)]
By:  

 

 

B-2

EXHIBIT 4.6

 

 

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

and

ANHEUSER-BUSCH INBEV NV/SA

and

the SUBSIDIARY GUARANTORS party hereto from time to time

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

FIFTH SUPPLEMENTAL INDENTURE

Dated as of November 27, 2009

 

 

To the Indenture, dated as of October 16, 2009,

among Anheuser-Busch InBev Worldwide Inc.,

Anheuser-Busch InBev NV/SA, the Subsidiary Guarantors party thereto from time to time and

The Bank of New York Mellon Trust Company, N.A., Trustee

 

 

 


TABLE OF CONTENTS

 

         Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION    3
SECTION 1.01   Definitions.    3
SECTION 1.02   Separability Clause.    3
SECTION 1.03   Benefits of Instrument.    3
ARTICLE II AMENDMENT OF INDENTURE    3
SECTION 2.01   Amendment of Section 209.    3
ARTICLE III MISCELLANEOUS PROVISIONS    3
SECTION 3.01   Effectiveness.    3
SECTION 3.02   Ratification and Integral Part.    4
SECTION 3.03   Priority.    4
SECTION 3.04   Successors and Assigns.    4
SECTION 3.05   Counterparts.    4
SECTION 3.06   The Trustee.    4
SECTION 3.07   Governing Law.    4

 

- 1 -


FIFTH SUPPLEMENTAL INDENTURE, dated as of November 27, 2009 (the “ Fifth Supplemental Indenture ”), among ANHEUSER-BUSCH INBEV WORLDWIDE INC., a corporation duly organized and existing under the laws of the State of Delaware (the “ Company ”), ANHEUSER-BUSCH INBEV NV/SA, a société anonyme duly organized and existing under the laws of the Kingdom of Belgium (the “ Parent Guarantor ”), ANHEUSER-BUSCH COMPANIES, INC., a corporation duly organized and existing under the laws of the State of Delaware, INBEV BELGIUM SA/NV, a public limited liability company organized and existing under Belgian law, BRANDBREW S.A., a public limited liability company organized and existing under Luxembourg law, COBREW NV/SA, a public limited liability company organized and existing under Belgian law, AB INBEV FRANCE S.A.S., a société par actions simplifiée organized and existing under French law, INTERBREW INTERNATIONAL B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, INTERBREW CENTRAL EUROPEAN HOLDING B.V., a private company with limited liability incorporated and existing under Dutch law with its corporate seat at Breda, The Netherlands, NIMBUSPATH LIMITED, a private limited company organized and existing under English law, AMBREW S.A., a société anonyme organized and existing under Luxembourg law, INBEV NEDERLAND N.V., a limited liability company incorporated and existing under Dutch law with its corporate seat at Breda, the Netherlands (each, a “ Subsidiary Guarantor ”, and together with the Parent Guarantor, the “ Guarantors ”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”) to the Indenture, dated as of October 16, 2009, among the Company, the Guarantors and the Trustee (the “ Indenture ”).

RECITALS OF THE COMPANY AND THE GUARANTORS

WHEREAS, the Company, the Guarantors and the Trustee are parties to the Indenture, which provides for the issuance from time to time of unsecured debt securities of the Company;

WHEREAS, Section 209 and Section 901(14) of the Indenture permits supplements thereto without the consent of Holders of Securities to amend or modify the terms of any Guarantee or the limitations applicable to any Guarantee, in any respect reasonably deemed necessary by a Subsidiary Guarantor to meet the requirements of Rule 3-10 under Regulation S-X under the Securities Act (“ Rule 3-10 ”) in order for financial statements of such Subsidiary Guarantor not to be required to be included in any registration statement filed with or furnished to the Commission;

WHEREAS, AB InBev France S.A.S. and AmBrew S.A. have determined that the limitations on their Guarantees, which were previously issued in connection with outstanding Securities under the Indenture, as set forth in Section 209(d) of the Indenture, would prohibit the Company from meeting the requirements of Rule 3-10 in order for financial statements of such Subsidiary Guarantors not to be required to be included in a Registration Statement on Form F-4 to be filed by the Company with the Commission.

WHEREAS, as contemplated by Section 209 and Section 901(14) of the Indenture, the Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Fifth Supplemental Indenture to amend the Indenture in the manner set forth herein;

 

- 2 -


WHEREAS, the Company and the Guarantors have taken all necessary corporate action to authorize the execution and delivery of this Fifth Supplemental Indenture;

NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guarantors and the Trustee mutually agree as follows:

ARTICLE I

Definitions and Other Provisions of General Application

SECTION 1.01 Definitions.

Except as otherwise expressly provided or unless the context otherwise requires, all terms used in this Fifth Supplemental Indenture which are defined in the Indenture shall have the meanings ascribed to them by the Indenture.

SECTION 1.02 Separability Clause.

In case any provision in this Fifth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.03 Benefits of Instrument.

Nothing in this Fifth Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Fifth Supplemental Indenture or the Indenture.

ARTICLE II

Amendment of Indenture

SECTION 2.01 Amendment of Section 209 . Section 209 of the Indenture is amended by deleting subsection (d) in its entirety and replacing it with the word “Reserved”.

ARTICLE III

Miscellaneous Provisions

SECTION 3.01 Effectiveness . This Fifth Supplemental Indenture will become effective upon its execution and delivery.

 

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SECTION 3.02 Ratification and Integral Part . The Indenture as supplemented by this Fifth Supplemental Indenture, is in all respects ratified and confirmed, and this Fifth Supplemental Indenture will be deemed an integral part of the Indenture in the manner and to the extent herein and therein provided.

SECTION 3.03 Priority . This Fifth Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this Fifth Supplemental Indenture shall, subject to the terms hereof, supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith.

SECTION 3.04 Successors and Assigns . All covenants and agreements in the Indenture, as supplemented and amended by this Fifth Supplemental Indenture, by the Company and the Guarantors will bind their respective successors and assigns, whether so expressed or not.

SECTION 3.05 Counterparts . This Fifth Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 3.06 The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fifth Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company and the Guarantors.

SECTION 3.07 Governing Law . This Fifth Supplemental Indenture will be governed by and construed in accordance with the laws of the State of New York.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

A NHEUSER -B USCH I N B EV W ORLDWIDE I NC .

as Company

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance

A NHEUSER -B USCH I N B EV NV/SA

as Parent Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis Van de Perre

  Name: Jean-Louis Van de Perre
  Title:   VP Tax

T HE  B ANK   OF  N EW  Y ORK  M ELLON  T RUST

C OMPANY , N.A.

as Trustee

By:  

 

  Name:
  Title:


A NHEUSER -B USCH C OMPANIES , I NC .

As Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance

I N B EV B ELGIUM SA/NV

as Subsidiary Guarantor

By:  

/s/ Erland Van Vreckem

  Name: Erland Van Vreckem
  Title:   Legal Director Benelux
By:  

/s/ Vincent Borreman

  Name: Vincent Borreman
  Title:   Senior Legal Counsel

B RAND B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696 as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance


AB I N B EV F RANCE S.A.S.

as Subsidiary Guarantor

By:  

/s/ Emilie Ruyant

  Name: Emilie Ruyant
  Title:   Legal Director France

I NTERBREW I NTERNATIONAL B.V.

as Subsidiary Guarantor

By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:   Senior Legal Counsel, Corporate
Finance and Governance
By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director

I NTERBREW C ENTRAL E UROPEAN H OLDING B.V.

as Subsidiary Guarantor

By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:   Senior Legal Counsel, Corporate
Finance and Governance
By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director


N IMBUSPATH L IMITED

as Subsidiary Guarantor

By:  

/s/ Claude Bahoshy

  Name: Claude Bahoshy
  Title:  Director

A M B REW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525 as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:  VP Legal Corporate and Compliance

C O B REW NV/SA

as Subsidiary Guarantor

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:  VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis Van de Perre

  Name: Jean-Louis Van de Perre
  Title:  VP Tax

I N B EV N EDERLAND N.V.

as Subsidiary Guarantor

By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:  Senior Counsel, Corporate Finance and Governance

EXHIBIT 4.7

REGISTRATION RIGHTS AGREEMENT

16 OCTOBER 2009

Among

ANHEUSER-BUSCH INBEV SA/NV

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

THE SUBSIDIARY GUARANTORS

and

J.P. MORGAN SECURITIES INC.

BANC OF AMERICA SECURITIES LLC

DEUTSCHE BANK SECURITIES INC.


CONTENTS

 

Clause        Page
1.  

Definitions

   1
2.  

Registration under the 1933 Act

   4
3.  

Registration Procedures

   9
4.  

Indemnification; Contribution

   16
5.  

Miscellaneous

   19

Signatories

   23


REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the Agreement ) is made and entered into this 16th day of October, 2009,

AMONG :

 

(1) ANHEUSER-BUSCH INBEV WORLDWIDE INC. , a corporation incorporated under the laws of the State of Delaware with a registered office at 1209 Orange Street, Wilmington, Delaware 19801 (the Issuer );

 

(2) ANHEUSER-BUSCH INBEV NV/SA , a company incorporated under the laws of Belgium (the Parent Guarantor );

 

(3) THE SUBSIDIARY GUARANTORS named in Schedule 1 hereto (the Subsidiary Guarantors and together with the Parent Guarantor, the Guarantors );

 

(4) J.P. MORGAN SECURITIES INC. ( JP Morgan );

 

(5) BANC OF AMERICA SECURITIES LLC ( BAML ); and

 

(6) DEUTSCHE BANK SECURITIES INC. ( Deutsche Bank and, together with JP Morgan and BAML, the Initial Purchasers ).

This Agreement is made pursuant to the Purchase Agreement, dated 13 October 2009, among the Issuer, the Parent Guarantor and the Initial Purchasers (the Purchase Agreement ), which provides for the sale by the Issuer to the Initial Purchasers of an aggregate of U.S.$ 1,500,000,000 principal amount of the Issuer’s 3.000% Notes due 2012, U.S.$ 1,250,000,000 principal amount of the Issuer’s 4.125% Notes due 2015, U.S.$ 2,250,000,000 principal amount of the Issuer’s 5.375% Notes due 2020 and U.S.$ 500,000,000 principal amount of the Issuer’s 6.375% Notes due 2040 (collectively the Securities ). In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Issuer and the Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement.

In consideration of the foregoing, the parties hereto agree as follows:

 

1. DEFINITIONS

As used in this Agreement, the following capitalized defined terms shall have the following meanings:

1933 Act shall mean the Securities Act of 1933, as amended from time to time.

1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to time.

Business Day shall mean a day that is not a Saturday, a Sunday, or a day on which banking institutions in New York, New York or Brussels, Belgium are authorized or required to be closed.

Closing Date shall mean the Closing Date as defined in the Purchase Agreement.

Depositary shall mean The Depository Trust Company, or any other depositary appointed by the Issuer, provided, however, that such depositary shall have an address in the Borough of Manhattan, in The City of New York.

 

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Exchange Offer shall mean the exchange offer by the Issuer of Exchange Securities for Registrable Securities pursuant to Clause 2.1 hereof.

Exchange Offer Registration Statement shall mean an exchange offer registration statement on Form F-4 (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein.

Exchange Period shall have the meaning set forth in Clause 2.1 hereof.

Exchange Securities shall mean the 3.000% Notes due 2012, the 4.125% Notes due 2015, the 5.375% Notes due 2020 and the 6.375% Notes due 2040, each as issued by the Issuer and guaranteed by the Guarantors under the Indenture containing terms identical to the Securities in all material respects (except for references to certain interest rate provisions, restrictions on transfers and restrictive legends), to be offered to Holders of Registrable Securities pursuant to the Exchange Offer.

Free Writing Prospectus means each free writing prospectus (as defined in Rule 405 under the 1933 Act) prepared by or on behalf of the Issuer or a Guarantor or used or referred to by the Issuer or a Guarantor in connection with the sale of the Securities or the Exchange Securities.

Guarantors shall have the meaning set forth in the preamble and shall also include their successors.

Holder shall mean an Initial Purchaser, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become registered owners of Registrable Securities under the Indenture and each Participating Broker-Dealer that holds Exchange Securities for so long as such Participating Broker-Dealer is required to deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities.

Indenture shall mean the Indenture relating to the Securities dated as of the date hereof, among the Issuer, the Guarantors and The Bank of New York Mellon Trust Company N.A., as Trustee.

Initial Purchaser or Initial Purchasers shall have the meaning set forth in the preamble.

Issuer shall have the meaning set forth in the preamble and shall also include the Issuer’s successors.

Majority Holders shall mean the Holders of a majority of the aggregate principal amount of Outstanding (as defined in the Indenture) Registrable Securities (irrespective of series); provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Issuer and other obligors on the Securities or any (as defined in the Indenture) of the Issuer shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount.

Notes Indenture shall mean the Indenture, dated October 16, 2009, as supplemented, between the Issuer, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as Trustee.

Parent Guarantor shall have the meaning set forth in the preamble and shall also include the Parent Guarantor’s successors.

Participating Broker-Dealer shall mean any of JP Morgan, BAML and Deutsche Bank and any other broker-dealer which makes a market in the Securities and exchanges Registrable Securities in the Exchange Offer for Exchange Securities.

 

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Person shall mean an individual, partnership (general or limited), corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Prospectus shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

Purchase Agreement shall have the meaning set forth in the preamble.

Registrable Securities shall mean the Securities; provided, however, that Securities shall cease to be Registrable Securities when (a) a Registration Statement with respect to such Securities shall have been declared effective under the 1933 Act and such Securities shall have been disposed of pursuant to such Registration Statement, (b) such Securities shall have ceased to be outstanding or (c) the Exchange Offer is consummated.

Registration Expenses shall mean any and all expenses incident to performance of or compliance by the Issuer and the Guarantors with this Agreement, including without limitation: (a) all SEC, stock exchange or Financial Industry Regulatory Authority ( FINRA ) registration and filing fees, including, if applicable, the fees and expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained by any holder of Registrable Securities in accordance with the rules and regulations of FINRA, (b) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of FINRA (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Securities or Registrable Securities and any filings with FINRA), (c) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (d) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Securities on any securities exchange or exchanges, (e) all rating agency fees, (f) the fees and disbursements of counsel for the Issuer and the Guarantors and of the independent public accountants of the Issuer and the Guarantors, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance, (g) the fees and expenses of the Trustee, and any escrow agent or custodian, (h) the reasonable expenses of the Initial Purchasers in connection with the Exchange Offer, including the reasonable fees and expenses of counsel to the Initial Purchasers in connection therewith, (i) the reasonable fees and disbursements of Special Counsel and (j) the reasonable fees and disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and the fees and expenses of any special experts retained by the Issuer and the Guarantors in connection with any Registration Statement, but excluding underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

Registration Statement shall mean any registration statement of the Issuer and the Guarantors which covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

SAS 72 shall mean Statement on Auditing Standards No. 72.

 

3


SEC shall mean the United States Securities and Exchange Commission or any successor agency or government body performing the functions currently performed by the United States Securities and Exchange Commission.

Shelf Registrable Securities shall have the meaning set forth in Clause 2.5.

Shelf Registration shall mean a registration effected pursuant to Clause 2.2 hereof.

Shelf Registration Statement shall mean a “shelf” registration statement pursuant to the provisions of Clause 2.2 of this Agreement which covers all of the Shelf Registrable Securities on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

Special Counsel shall mean Allen & Overy LLP, as special counsel for the Holders of Shelf Registrable Securities or such other special counsel (but not more than one) as may be selected by the Holders of a majority in aggregate principal amount of such Shelf Registrable Securities.

TIA shall mean the Trust Indenture Act of 1939, as amended.

Trustee shall mean the trustee with respect to the Securities and the Exchange Securities under the Indenture.

 

2. REGISTRATION UNDER THE 1933 ACT

 

2.1 Exchange Offer

The Issuer and the Guarantors shall, for the benefit of the Holders, at the Issuer and Guarantors’ expense, (a) use their commercially reasonable efforts to file with the SEC an Exchange Offer Registration Statement within 210 days of the Closing Date on an appropriate form under the 1933 Act with respect to a proposed Exchange Offer and the issuance and delivery to the Holders, in exchange for the Registrable Securities, of a like principal amount of Exchange Securities, (b) use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be declared effective under the 1933 Act within 270 days of the Closing Date, (c) use their commercially reasonable efforts to keep the Exchange Offer Registration Statement effective until the closing of the Exchange Offer, (d) use their commercially reasonable efforts to cause the Exchange Offer, if it has been commenced, to be consummated not later than 300 days following the Closing Date and (e) for a period of 90 days following the consummation of the Exchange Offer (or such shorter period of time during which the Participating Broker-Dealers are required by law to deliver a prospectus), to make available a prospectus meeting the requirements of the 1933 Act to any Participating Broker-Dealer for use in connection with any resale of any Exchange Securities acquired in the Exchange Offer. The Exchange Securities will be issued under the Indenture. Upon the effectiveness of the Exchange Offer Registration Statement, the Issuer shall, as soon as practicable, commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Registrable Securities for Exchange Securities (assuming that such Holder (i) is not an affiliate of the Issuer within the meaning of Rule 405 under the 1933 Act, (ii) is not a broker-dealer tendering Registrable Securities acquired directly from the Issuer for its own account, (iii) acquired the Exchange Securities in the ordinary course of such Holder’s business and (iv) has no arrangements or understandings with any Person to participate in the Exchange Offer for the purpose of distributing the Exchange Securities and is not prohibited by any law or policy from participating in the Exchange Offer) to transfer such Exchange Securities from and after their receipt without any limitations or restrictions under the 1933 Act and under state securities or blue sky laws.

 

4


In connection with the Exchange Offer, the Issuer and the Guarantors shall:

 

  (a) mail as promptly as practicable to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents, provided that the Issuer and the Guarantors shall only be required to mail such Prospectus to Holders of which they are aware after due inquiry;

 

  (b) keep the Exchange Offer open for acceptance for a period of not less than 20 business days (as defined in Rule 13e-4 of the 1934 Act) after the date notice thereof is mailed to the Holders (or longer if required by applicable law) (such period referred to herein as the Exchange Period );

 

  (c) utilize the services of the Depositary for the Exchange Offer;

 

  (d) permit Holders to withdraw tendered Registrable Securities at any time prior to the close of business, New York City time, on the last business day of the Exchange Period, by sending to the institution specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange, and a statement that such Holder is withdrawing such Holder’s election to have such Registrable Securities exchanged;

 

  (e) notify each Holder that any Registrable Security not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except in the case of the Initial Purchasers and Participating Broker-Dealers as provided herein); and

 

  (f) otherwise comply in all material respects with all applicable laws relating to the Exchange Offer.

The Exchange Securities shall be issued under (a) the Indenture or (b) an indenture identical in all material respects to the Indenture and which, in either case, has been qualified under the TIA, or is exempt from such qualification and shall provide that the Exchange Securities shall not be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Securities of any series and the equivalent Exchange Securities of such series shall vote and consent together on all matters as one class and that none of the Securities of any series or the equivalent or the Exchange Securities of such series will have the right to vote or consent as a separate class on any matter other than those matters which may affect only that particular series of Securities or the equivalent Exchange Securities of such series.

As soon as practicable after the close of the Exchange Offer, the Issuer shall:

 

  (i) accept for exchange all Registrable Securities duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which shall be an exhibit thereto;

 

  (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities so accepted for exchange; and

 

  (iii)

cause the Trustee promptly to authenticate and deliver Exchange Securities to each Holder of Registrable Securities so accepted for exchange in a principal amount equal to the principal amount of the Registrable Securities of such Holder so accepted for exchange. Interest on each Exchange Security will accrue from the last date on which interest was paid on the Registrable Securities surrendered in exchange therefor or, if no interest has been paid on the Registrable Securities, from the date of original issuance. The Exchange Offer shall not be subject to any conditions, other than (A) that the Exchange Offer, or the making of

 

5


 

any exchange by a Holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, (B) the valid tendering of Registrable Securities in accordance with the Exchange Offer, (C) that each Holder of Registrable Securities exchanged in the Exchange Offer shall have represented that (i) all Exchange Securities to be received by it shall be acquired in the ordinary course of its business and that at the time of the consummation of the Exchange Offer it shall have no arrangement or understanding with any person to participate in the distribution (within the meaning of the 1933 Act) of the Securities or Exchange Securities, (ii) it is not prohibited by any law or policy from participating in the Exchange Offer, (iii) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of Exchange Securities (iv) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Registrable Securities that were acquired as a result of market-making activities or other trading activities and it will be required to acknowledge that it will deliver a Prospectus in connection with any resale of Exchange Securities and (v) it shall have made such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form F-4 or other appropriate form under the 1933 Act available, (E) that no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the Issuer’s judgment, would reasonably be expected to impair the ability of the Issuer to proceed with the Exchange Offer and (F) that the Exchange Offer will be made to all Holders other than to any Holder of the European Economic Area to whom the Exchange Offer cannot be made without requiring the production of a prospectus for the purposes of the Directive 2003/71/EC (which may be certified or validated by way of representations from Holders of Registrable Securities). The Issuer shall inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right, subject to applicable law, to contact such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer.

Upon consummation of the Exchange Offer in accordance with this Agreement, the Issuer and Guarantors shall have no further obligation to register the Registrable Securities pursuant to Clause 2.2 of this Agreement.

 

2.2 Shelf Registration

(a) If, because of any changes in law, SEC rules or regulations or applicable interpretations thereof by the staff of the SEC, the Issuer determines after consultation with its outside counsel that it is not permitted to effect the Exchange Offer as contemplated by Clause 2.1 hereof, (b) if for any other reason the Exchange Offer is not consummated within 300 days of the Closing Date, (c) upon the written request of any Initial Purchaser holding Registrable Securities that are not eligible to be exchanged for Exchange Securities in the Exchange Offer and held by it following the consummation of the Exchange Offer or (d) upon notice of any Holder (other than an Initial Purchaser) given to the Issuer in writing during the Exchange Period that (A) due to a change in law or SEC policy it is not entitled to participate in the Exchange Offer, (B) due to a change in law or SEC policy it may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) it is a broker-dealer and owns Registrable Securities acquired directly from the Issuer or an affiliate of the Issuer, then in case of each of paragraphs (a) through (d) the Issuer and the Guarantors shall, at their expense:

 

  (a)

As promptly as practicable and within 30 days from the date on which any of the conditions described in the foregoing clauses (a) - (d) occur, including in the cases if clauses (c) and (d) the receipt of notice (each a Trigger Event ) (but in no case earlier than 210 days following the Closing Date), use commercially reasonable efforts to file with the SEC, and thereafter

 

6


 

shall use their commercially reasonable efforts to cause to be declared effective as promptly as practicable and, in any event, within 90 days after the Trigger Event (but in no case earlier than 270 days following the Closing Date), a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by the Majority Holders participating in the Shelf Registration and set forth in such Shelf Registration Statement.

 

  (b) Use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming part thereof to be usable by Holders for a period of one year from the Trigger Event, or for such shorter period that will terminate when all Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding or otherwise to be Registrable Securities (the Effectiveness Period ); provided, however, that the Effectiveness Period in respect of the Shelf Registration Statement shall be extended up to a maximum of 90 days if necessary to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the 1933 Act and as otherwise provided herein.

 

  (c) Notwithstanding any other provisions hereof, use their commercially reasonable efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading.

The Issuer and the Guarantors agree (i) not to permit any securities other than Registrable Securities to be included in the Shelf Registration Statement and (ii), if necessary, to supplement or amend the Shelf Registration Statement, as required by Clause 3(b) below, and to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly as reasonably practicable after its being used or filed with the SEC.

 

2.3 Expenses

The Issuer and the Guarantors shall pay all Registration Expenses in connection with the registration pursuant to Clause 2.1 or 2.2. Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

 

2.4 Effectiveness.

 

(a)

The Issuer and the Guarantors will be deemed not to have used their respective commercially reasonable efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if the Issuer or any Guarantor voluntarily takes any action that would, or omits to take any action which omission would result in (i) any such Registration Statement not being declared effective or (ii) the Holders of Registrable Securities covered thereby not being able to exchange or offer and sell such Registrable Securities during that period as and to the extent contemplated hereby, unless (i) such action is required by applicable law, or (ii) such action is taken in good faith and for valid business reasons (not including avoidance of the Issuer’s or the Guarantor’s obligations hereunder), including

 

7


 

the acquisition or divestiture of assets, so long as the Issuer and the Guarantors promptly thereafter comply with the requirements of Clause 3(k) hereof, if applicable.

 

(b) An Exchange Offer Registration Statement pursuant to Clause 2.1 hereof or a Shelf Registration Statement pursuant to Clause 2.2 hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to an Exchange Offer Registration Statement or a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to be effective during the period of such interference, until the offering of Registrable Securities pursuant to such Registration Statement may legally resume.

 

2.5 Interest

In the event that either (a) the Exchange Offer Registration Statement is not filed with the Commission on or prior to the 210th calendar day following the Closing Date, (b) the Exchange Offer Registration Statement has not been declared effective on or prior to the 270th calendar day following the Closing Date, (c) the Exchange Offer is not consummated , on or prior to the 300th calendar day following the Closing Date, or (d) a Shelf Registration Statement is not declared effective within the time period specified in Section 2.2(a) (each such event referred to in paragraphs (a) through (d) above, a Registration Default ), the interest rate borne by the Securities shall be increased ( Additional Interest ) by one-quarter of one percent (0.25%) per annum for the first 90-day period immediately following the occurrence of such Registration Default, which rate will increase by one quarter of one percent (0.25%) with respect to each subsequent 90-day period (or portion thereof) that such Additional Interest continues to accrue under any such circumstance, provided that the maximum aggregate increase in the interest rate will in no event exceed one percent (1%) per annum; provided, however, that no Additional Interest shall be payable if the Exchange Offer Registration Statement is not filed or declared effective or the Exchange Offer is not consummated on account of the reasons set forth in paragraph (a) of the first paragraph of Clause 2.2 (it being understood, however, that in any such case the Issuer and the Guarantors shall be obligated to file a Shelf Registration Statement and Additional Interest shall be payable if the Shelf Registration Statement is not declared effective in accordance with paragraph (b)), that no Additional Interest shall be payable if the Shelf Registration Statement is not declared effective as set forth above because the request under paragraph (c) of the first paragraph of Clause 2.2 or notice under paragraph (d) of the first paragraph of Clause 2.2 was not made on a timely basis; and provided, further, that Additional Interest shall only be payable in case the Shelf Registration Statement is not declared effective as aforesaid.

Immediately following the cure of a Registration Default, the accrual of Additional Interest with respect to that particular Registration Default will cease.

If the Shelf Registration Statement is declared effective but becomes unusable by the Holders of Registrable Securities covered by such Shelf Registration Statement ( Shelf Registrable Securities ) for any reason, and the aggregate number of days in any consecutive 12-month period for which the Shelf Registration Statement shall not be usable exceeds 30 days in the aggregate, then the interest rate borne by the Shelf Registrable Securities will be increased by one-quarter of one percent (0.25%) per annum of the principal amount of the Securities for the first 30-day period (or portion thereof) beginning on the 31st such day that such Shelf Registration Statement ceases to be usable, which rate shall be increased by an additional one-quarter of one percent (0.25%) per annum of the principal amount of the Securities at the beginning of each subsequent 30-day period; provided that the maximum aggregate increase in the interest rate as a result of a Shelf Registration Statement being unusable (inclusive of any interest that accrues on such Shelf Registrable Securities pursuant to the first paragraph of this Clause 2.5) will in no event exceed one percent (1%) per annum. Upon the Shelf Registration Statement once again becoming usable, the interest rate borne by the Shelf

 

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Registrable Securities will be reduced to the original interest rate. Additional Interest shall be computed based on the actual number of days elapsed in each 30-day period in which the Shelf Registration Statement is unusable.

The Issuer shall notify the Trustee within five Business Days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an Event Date ). Additional Interest shall be paid by depositing with the Trustee, in trust, for the benefit of the Holders of Registrable Securities entitled to receive the interest payment, on or before the applicable semiannual interest payment date, immediately available funds in sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable on each interest payment date to the record Holder of Registrable Securities entitled to receive the interest payment to be paid on such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to accrue from and including the day following the applicable Event Date.

 

3. REGISTRATION PROCEDURES

In connection with the obligations of the Issuer and the Guarantors with respect to Registration Statements pursuant to Clauses 2.1 and 2.2 hereof, the Issuer and the Guarantors shall:

 

  (a) prepare and file with the SEC a Registration Statement, within the relevant time period specified in Clause 2, on the appropriate form under the 1933 Act, which form (i) shall be selected by the Issuer and/or the Parent Guarantor, (ii) shall, in the case of a Shelf Registration, be available for the sale of the Shelf Registrable Securities by the selling Holders thereof, and (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein;

 

  (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable to them with respect to the disposition of all securities covered by each Registration Statement during the applicable period in accordance, in the case of a Shelf Registration, with the intended method or methods of distribution by the selling Holders thereof (including sales by any Participating Broker-Dealer);

 

  (c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities, at least five Business Days prior to filing, that a Shelf Registration Statement with respect to the Registrable Securities is being filed and advising such Holders that the distribution of Registrable Securities will be made in accordance with the method selected by the Majority Holders participating in the Shelf Registration; (ii) furnish to each Holder of Registrable Securities and to each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if the Holder so requests, all exhibits in order to facilitate the public sale or other disposition of the Registrable Securities; and (iii) hereby consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Securities, in accordance with applicable law, in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto;

 

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  (d) use their commercially reasonable efforts to register or qualify the Registrable Securities under all applicable state securities or “blue sky” laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Securities shall reasonably request in writing by the time the applicable Registration Statement is declared effective by the SEC, and do any and all other acts and things which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that neither the Issuer nor any Guarantor shall be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Clause 3(d), (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject, or (iii) conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of such jurisdiction;

 

  (e) notify promptly each Holder of Registrable Securities under a Shelf Registration or any Participating Broker-Dealer who has notified the Issuer that it is utilizing the Exchange Offer Registration Statement as provided in paragraph (f) below and, if requested by such Holder or Participating Broker-Dealer, confirm such advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, provided that this Clause (i) shall not apply with respect to regular fillings of documents or reports under the 1934 Act, at any time following the effectiveness of such Registration Statement, where such filling is made as part of the Issuer’s or Guarantors’ ordinary-course periodic disclosure obligations under Section 13 or 15 of the 1934 Act, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) in the case of a Shelf Registration, if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Issuer contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects, (v) of the happening of any event or the discovery of any facts during the period a Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading, (vi) of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Registrable Securities or the Exchange Securities, as the case may be, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vii) of any determination by the Issuer that a post-effective amendment to such Registration Statement would be appropriate;

 

  (f)

in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer Registration Statement a section entitled “Plan of Distribution” which section shall be reasonably acceptable to JP Morgan, BAML and Deutsche Bank on behalf of the Participating Broker-Dealers, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that holds Registrable Securities acquired for its own account as a result of market-making activities or other trading activities and that will be the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Securities to be received by such broker-dealer in the Exchange Offer, whether such positions or policies

 

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have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of JP Morgan, BAML and Deutsche Bank on behalf of the Participating Broker-Dealers and its counsel, represent the prevailing views of the staff of the SEC, including a statement that any such broker-dealer who receives Exchange Securities for Registrable Securities pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has delivered to the Issuer the notice referred to in Clause 3(e), without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may reasonably request, (iii) hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto, by any Person subject to the prospectus delivery requirements of the SEC, including all Participating Broker-Dealers, in connection with the sale or transfer of the Exchange Securities covered by the Prospectus or any amendment or supplement thereto, (iv) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (x) the following provision:

“If the exchange offeree is a broker-dealer holding Registrable Securities acquired for its own account as a result of market-making activities or other trading activities, it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of Exchange Securities received in respect of such Registrable Securities pursuant to the Exchange Offer”;

and (y) a statement to the effect that by a broker-dealer making the acknowledgment described in paragraph (x) and by delivering a Prospectus in connection with the exchange of Registrable Securities, the broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the 1933 Act; and (v) deliver to JP Morgan, BAML and Deutsche Bank on behalf of the Participating Broker-Dealers upon the effectiveness of the Exchange Offer Registration Statement officers’ certificates substantially in the form customarily delivered in a public offering of debt securities and a comfort letter or comfort letters in customary form to the extent permitted by SAS 72 (or if such a comfort letter is not permitted by SAS 72, an agreed upon procedures letter in customary form) from the Issuer’s independent certified public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Issuer or of any business acquired by the Issuer for which financial statements are, or are required to be, included in the Registration Statement) at least as broad in scope and coverage as the comfort letter or comfort letters delivered to the Initial Purchasers in connection with the initial sale of the Securities to the Initial Purchasers;

 

  (g) (i) in the case of an Exchange Offer, furnish counsel for the Initial Purchasers and (ii) in the case of a Shelf Registration, furnish Special Counsel copies of comment letters received from the SEC or any other request by the SEC or any state securities authority for amendments or supplements to the applicable Registration Statement or for additional information;

 

  (h) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment;

 

  (i) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, and each underwriter, if any, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto, unless requested in writing);

 

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  (j) in the case of a Shelf Registration, co-operate with the selling Holders of Shelf Registrable Securities to facilitate the timely preparation and delivery of certificates representing Shelf Registrable Securities to be sold and not bearing any restrictive legends; and enable such Shelf Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders or the underwriters, if any, may reasonably request at least three Business Days prior to the closing of any sale of Shelf Registrable Shelf Securities;

 

  (k) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of any facts, each as contemplated by Clauses 3(e)(v), 3(e)(vi) and 3(e)(vii) hereof, as promptly as practicable after the occurrence of such an event, use its commercially reasonable efforts to prepare a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Shelf Registrable Securities or Participating Broker-Dealers, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. At such time as such public disclosure is otherwise made or the Issuer determines that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Issuer agrees promptly to notify each Holder of such determination and to furnish each Holder with such number of copies of the Prospectus as amended or supplemented, as such Holder may reasonably request and the Initial Purchasers, on their own behalf and on behalf of subsequent Holders, hereby agree to suspend use of the Prospectus until the Issuer has amended or supplemented to correct such misstatement or omission;

 

  (l) obtain a CUSIP number for all Exchange Securities or Shelf Registrable Securities, as the case may be, not later than the effective date of a Registration Statement applicable to such securities, and provide the Trustee with printed certificates for the Exchange Securities, or the Registrable Securities, as the case may be, in a form eligible for deposit with the Depositary;

 

  (m) (i) cause the Indenture to be qualified under the TIA in connection with the registration of the Exchange Securities or Shelf Registrable Securities, as the case may be, (ii) co-operate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use its commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;

 

  (n) in the case of a Shelf Registration, enter into customary agreements (including underwriting agreements) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Shelf Registrable Securities and in such connection whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration:

 

  (i) make such representations and warranties to the Holders of such Shelf Registrable Securities and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by them;

 

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  (ii) obtain opinions of United States and local counsel to the Issuer and the Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the holders of a majority in principal amount of the Shelf Registrable Securities being sold and their respective counsel) addressed to each selling Holder and the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters with such customary exceptions and qualifications as contained in the opinions delivered pursuant to the Purchase Agreement;

 

  (iii) obtain “cold comfort” letters and updates thereof from the Parent Guarantor’s independent certified public accountants (and, if necessary, any other independent certified public accountants of any material subsidiary of the Parent Guarantor or of any business directly or indirectly acquired by the Parent Guarantor for which financial statements are, or are required to be, included in the Registration Statement) addressed to each selling Holder of Shelf Registrable Securities (to the extent permitted by applicable professional standards) and the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters to underwriters in connection with similar underwritten offerings, such letters to be agreed upon by the selling Holders and underwriters and such accountants, such agreement not to be unreasonably withheld;

 

  (iv) if so requested by the Majority Holders, enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Shelf Registrable Securities, which agreement shall be in form, substance and scope customary for similar offerings;

 

  (v) if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Clause 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types of transactions; provided that such underwriting agreement shall contain customary provisions regarding indemnification of the Issuer with respect to information provided by the underwriter; and

 

  (vi) deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Majority Holders of the Shelf Registrable Securities being sold and the managing underwriters, if any.

The above shall be done at (A) the effectiveness of such Registration Statement (and each post-effective amendment thereto) and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder;

 

  (o)

in the case of a Shelf Registration or if a Prospectus is required to be delivered by any Participating Broker-Dealer in the case of an Exchange Offer, for a reasonable period of time preceding the filing of the applicable Registration Statement and prior to the execution of any applicable underwriting agreement, make available for inspection by representatives of the Holders of the Shelf Registrable Securities who are selected by Holders of a majority in aggregate principal amount of Shelf Registrable Securities, any underwriters participating in any disposition pursuant to a Shelf Registration Statement, any Participating Broker-Dealer, any Special Counsel or any accountant retained by any of the foregoing, all financial and other records, pertinent corporate documents and properties of the Issuer and the

 

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Guarantors reasonably requested by any such persons, and cause the respective officers, directors, employees, and any other agents of the Issuer and the Guarantors to supply all information reasonably requested by any such representative, underwriter, Special Counsel or accountant in connection with a Registration Statement, and make such representatives of the Issuer and the Guarantors available for discussion of such documents as shall be reasonably requested by the Initial Purchasers, provided, however that such records, documents or information which the Issuer identify as being confidential shall not be disclosed by the representative, Holder, attorney or accountant unless (i) the disclosure of such records, documents or information is necessary to avoid or correct a misstatement or omission in a Registration Statement; (ii) the release of such records, documents or information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or as part of the evidentiary procedures of a court of competent jurisdiction; or (iii) such records, documents or information have previously been generally made available to the public, and the Issuer shall be entitled to require that such persons sign a confidentiality agreement to that effect;

 

  (p) in the case of an Exchange Offer Registration Statement, a reasonable time prior to the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an Exchange Offer Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Initial Purchasers and to their counsel and make such changes in any such document prior to the filing thereof as the Initial Purchasers or such counsel may reasonably request and, except as otherwise required by applicable law, not file any such document in a form to which the Initial Purchasers and their counsel shall not have previously been advised and furnished a copy of or to which the Initial Purchasers or their counsel shall reasonably object, and make the representatives of the Issuer available for discussion of such documents as shall be reasonably requested by the Initial Purchasers;

 

  (q) in the case of a Shelf Registration, a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of Shelf Registrable Securities, to the Initial Purchasers, to Special Counsel and to the underwriter or underwriters of an underwritten offering of Shelf Registrable Securities, if any, make such changes in any such document prior to the filing thereof as the Initial Purchasers, Special Counsel or the underwriter or underwriters reasonably request and not file any such document in a form to which the Majority Holders of Shelf Registrable Securities, the Initial Purchasers on behalf of the Holders of Registrable Securities, Special Counsel or any underwriter shall not have previously been advised and furnished a copy of or to which such Majority Holders, the Initial Purchasers on behalf of the Holders of Registrable Securities, Special Counsel or any underwriter shall reasonably object, and make the representatives of the Issuer available for discussion of such document as shall be reasonably requested by the Majority Holders of Registrable Securities, the Initial Purchasers on behalf of Holders of Registrable Securities, Special Counsel or any underwriter;

 

  (r) in the case of a Shelf Registration, use its commercially reasonable efforts to cause all Exchange Securities and Shelf Registrable Securities to be listed on any securities exchange on which similar debt securities issued by the Issuer are then listed if requested by the Majority Holders or if requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any, which request shall, in the reasonable judgment of the Majority Holders or underwriters, as applicable, be for purposes of facilitating the sale or resale of the Exchange Securities or Shelf Registrable Securities;

 

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  (s) in the case of a Shelf Registration, use its commercially reasonable efforts to cause the Shelf Registrable Securities to be rated by the same nationally recognized statistical rating agencies rating the Registrable Securities, if so requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any;

 

  (t) otherwise comply with all applicable rules and regulations of the SEC and make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;

 

  (u) co-operate and assist in any filings required to be made with FINRA and, in the case of a Shelf Registration, in the performance of any due diligence investigation by any underwriter and its counsel (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of FINRA); and

 

  (v) upon consummation of an Exchange Offer, obtain customary opinions of counsel to the Issuer and the Guarantors addressed to the Trustee, if so required by the Trustee, which includes opinions that (i) the Issuer and the Guarantors have duly authorized, executed and delivered the Exchange Securities, as applicable, and the related indenture and guarantees, and (ii) each of the Exchange Securities and guarantees and related indenture constitute a legal, valid and binding obligation of the Issuer and the Guarantors, enforceable against the Issuer and the Guarantors in accordance with its respective terms (with customary exceptions).

In the case of a Shelf Registration Statement, the Issuer may (as a condition to such Holder’s participation in the Shelf Registration) require each Holder of Shelf Registrable Securities to furnish to the Issuer such information regarding the Holder and the proposed distribution by such Holder of such Shelf Registrable Securities as the Issuer may from time to time reasonably request in writing for use in connection with any Shelf Registration Statement or Prospectus included therein, including without limitation, information specified in Item 507 of Regulation S-K under the 1933 Act and the Issuer may exclude from such registration the Shelf Registrable Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request.

In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Issuer of the happening of any event or the discovery of any facts, each of the kind described in Clause 3(e)(v)-(vii) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Clause 3(k) hereof, and, if so directed by the Issuer, such Holder will deliver to the Issuer (at its expense) all copies in such Holder’s possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Shelf Registrable Securities current at the time of receipt of such notice.

Without prejudice to the obligation in Clause 2.5 to pay additional interest relating to periods when the Shelf Registration Statement is not available, during any 365-day period, the Issuer, upon notice to the Holders of Shelf Registrable Securities covered by the Shelf Registration Statement, may suspend the availability of such Registration Statement for up to two periods of up to 45 consecutive days (except for the consecutive 45-day period immediately prior to the maturity of the Securities), but not more than an aggregate of 60 days during any 365-day period, if the Issuer’s Board of Directors determines in good faith that there is a valid purpose for the suspension.

If any of the Registrable Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage

 

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such offering will be selected by the Majority Holders of such Registrable Securities included in such offering, provided such selection is acceptable to the Issuer. No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

4. INDEMNIFICATION; CONTRIBUTION

 

4.1 The Issuer and the Guarantors agree to indemnify and hold harmless the Initial Purchasers, each Holder, each Participating Broker-Dealer, each Person who participates as an underwriter in an offering of Shelf Registrable Securities (any such Person being an Underwriter ), each of their respective directors, officers and affiliates and each Person, if any, who controls any Holder or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

 

  (a) against any and all loss, liability, claim, damage and expense, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Exchange Securities or Shelf Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or any Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the 1933 Act or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

  (b) against any and all loss, liability, claim, damage and expense, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Clause 4.3 below) any such settlement is effected with the written consent of the indemnifying party, which shall not be unreasonably withheld; and

 

  (c) against any and all expense, as incurred (including the fees and disbursements of counsel chosen by any indemnified party as provided therein), reasonably incurred in investigating or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (a) or (c) above;

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Issuer by the Holder or Underwriter expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) or any Free Writing Prospectus.

The indemnity provided for in this Clause 4 will be in addition to any liability that the Issuer or the Guarantors may otherwise have to the indemnified parties.

 

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4.2 Each Holder severally, but not jointly, agrees to indemnify and hold harmless the Issuer and the Guarantors, the Initial Purchasers, each Underwriter and the other selling Holders, and each of their respective directors, officers and affiliates, and each Person, if any, who controls the Issuer, the Initial Purchasers, any Underwriter or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Clause 4.1 hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) or any Free Writing Prospectus in reliance upon and in conformity with written information with respect to such Holder furnished to the Issuer by such Holder expressly for use in the Shelf Registration Statement (or any amendment thereto or any Free Writing Prospectus) or such Prospectus (or any amendment or supplement thereto); provided, however, that no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Shelf Registration Statement.

 

4.3

Promptly after receipt by an indemnified party under this Clause 4 of notice of the commencement of any action for which such indemnified party is entitled to indemnification under this Clause 4, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Clause 4, notify the indemnifying party of the commencement thereof in writing; but the omission to so notify the indemnifying party (a) will not relieve it from any liability under Clause 4.1 or 4.2 above unless and to the extent such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (b) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in Clause 4.1 or 4.2 above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after receipt by the indemnifying party of notice of the institution of such action, then, in each such case, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Clause 4 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Initial Purchasers, Holders or Underwriters in the case of Clause 4.1 or the Issuer or Guarantors in the case of Clause 4.2, representing the indemnified parties under such clause, who are parties to such action or actions) or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. All fees and expenses reimbursed pursuant to this

 

17


 

Clause 4.3 shall be reimbursed as they are incurred. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless such indemnified party waived in writing its rights under this Clause 4, in which case the indemnified party may effect such a settlement without such consent. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party, or indemnity could have been sought hereunder by any indemnified party, unless such settlement (A) includes an unconditional written release of the indemnified party, in form and substance reasonably satisfactory to the indemnified party, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any indemnified party.

 

4.4 If the indemnification provided for in this Clause 4 is for any reason unavailable to hold harmless an indemnified party (other than by reason of the first sentence of Clause 4.3) in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the Issuer on the one hand and the Holders and the Initial Purchasers on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

The relative fault of the Issuer on the one hand and the Holders and the Initial Purchasers on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Issuer, the Holders or the Initial Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Issuer, the Holders and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Clause 4 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Clause 4. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Clause 4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Clause 4, in no event shall any Initial Purchaser be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased and sold by it pursuant to the Purchase Agreement exceeds the amount of any damages which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

For purposes of this Clause 4, each Person, if any, who controls an Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each of their respective directors, officers, agents, employees and affiliates shall have the same rights to contribution as such

 

18


Initial Purchaser or Holder, and each Person, if any, who controls the Issuer within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each of the Issuer’s directors, officers, agents, employees and affiliates shall have the same rights to contribution as the Issuer. The Initial Purchasers’ respective obligations to contribute pursuant to this Clause 4 are several in proportion to the principal amount of Securities set forth opposite their respective names in Schedule 1 to the Purchase Agreement and not joint.

 

5. MISCELLANEOUS

 

5.1 Rule 144 and Rule 144A

For so long as the Issuer or the Parent Guarantor is subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Issuer and the Parent Guarantor covenant that they will file the reports required to be filed by each of them under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder. If the Issuer or the Parent Guarantor ceases to be so required to file such reports, the Issuer and the Parent Guarantor covenant that they will upon the request of any Holder of Registrable Securities (a) make publicly available such information as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a prospective purchaser as is necessary under applicable rules and regulations to permit sales pursuant to Rule 144A under the 1933 Act and will take such further action as any Holder of Registrable Securities may reasonably request, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Issuer will deliver to such Holder a written statement as to whether it has complied with such requirements. The Issuer’s obligations under this Clause 5.1 shall terminate upon the later of the consummation of the Exchange Offer and the Effectiveness Period.

 

5.2 No Inconsistent Agreements

The Issuer and the Guarantors have not entered into and the Issuer and the Guarantors will not after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not and will not for the term of this Agreement in any way conflict with the rights granted to the holders of the Issuer’s other issued and outstanding securities under any such agreements.

 

5.3 Amendments and Waivers

The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Issuer has obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure.

 

5.4 Notices

All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telecopier, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Issuer by means of a notice given in accordance with the provisions of this Clause 5.4, which address initially is the address set forth in the Purchase Agreement with respect to the Initial Purchasers; and (b) if to the

 

19


Issuer, initially at the Issuer’s address set forth in the Purchase Agreement, and thereafter at such other address of which notice is given in accordance with the provisions of this Clause 5.4.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands, or other communications shall be concurrently delivered by the person giving the same to the Trustee under the Indenture, at the address specified in such Indenture.

 

5.5 Successor and Assigns

This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such person shall be entitled to receive the benefits hereof.

 

5.6 Third Party Beneficiaries

Each Holder of Registrable Securities shall be a third party beneficiary to the agreements made hereunder between the Issuer and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights hereunder. The Initial Purchasers (even if the Initial Purchasers are not Holders of Registrable Securities) shall be third party beneficiaries to the agreements made hereunder between the Issuer and the Guarantors, on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder.

 

5.7 Specific Enforcement

Without limiting the remedies available to the Initial Purchasers and the Holders, the Issuer and the Guarantors acknowledge that any failure by the Issuer and the Guarantors to comply with their obligations under Clauses 2.1 through 2.4 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it would not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Issuer’s and the Guarantors’ obligations under Clauses 2.1 through 2.4 hereof.

 

5.8 Counterparts

This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

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5.9 Headings

The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

5.10 GOVERNING LAW; CONSENT TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; WAIVER OF JURY TRIAL

 

(a) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.

 

(b) Each of the Initial Purchasers and the Issuer irrevocably consents and agrees that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or based on this Agreement may be brought in any United States federal or state court in the State of New York, County of New York.

 

(c) The Issuer and each of the Initial Purchasers hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

(d) The Issuer, each of the Guarantors and each of the Initial Purchasers hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby.

 

5.11 Severability

In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

5.12 Waiver of rights under Jersey law

Each Guarantor irrevocably and unconditionally waives any right it may have or claim at any time under Jersey law:

 

  (a) whether by virtue of the droit de discussion or otherwise to require that recourse be had to the assets of any other person before any claim is enforced against the Guarantor under this Agreement in respect of the obligations assumed by the Guarantor under this Agreement; and

 

  (b) whether by virtue of the droit de division or otherwise to require that any liability under this Agreement be divided or apportioned with any other person or reduced in any manner whatsoever.

 

5.13 Guarantors

Notwithstanding anything herein to the contrary, to the extent that the registration of the Securities pursuant to an Exchange Offer Registration Statement or a Shelf Registration Statement in accordance with Clause 2.1 or Clause 2.2 of this Agreement would, under the rules, regulations or interpretations of the SEC, require a Guarantor (other than the Parent Guarantor) to include its

 

21


financial statements in any such Registration Statement or periodic reports filed with or furnished to the SEC, the guarantee of such Guarantor (each, a Guarantee ) shall not be applicable to any Securities so registered on a Registration Statement and shall be terminated in accordance with the Notes Indenture; and, moreover, the relevant Guarantor will be under no obligation to issue such Guarantee with respect to any Exchange Securities. In addition, to the extent it is deemed reasonably necessary for purposes of meeting the requirements of Rule 3-10 under Regulation S-X under the 1933 Act (or any successor or similar regulation or exemption) in order for financial statements of such Guarantor (other than the Parent Guarantor) not to be required to be included in any Registration Statement or periodic reports filed with or furnished to the SEC, such Guarantor shall be entitled to amend or modify the terms of its Guarantee with respect to the Securities or the Exchange Securities or the limitations applicable to its Guarantee, in any respect in accordance with the terms of the Notes Indenture.

IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first written above.

 

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SIGNATORIES

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance
ANHEUSER-BUSCH INBEV NV/SA
By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance
By:  

/s/ Jean-Louis de Perre

  Name: Jean-Louis de Perre
  Title:   VP Tax
INBEV BELGIUM SA/NV
By:  

/s/ Erland Van Vreckham

  Name: Erland Van Vreckham
  Title:   Legal Director Benelux
By:  

/s/ Vincent Borreman

  Name: Vincent Borreman
  Title:   Senior Legal Counsel
ANHEUSER-BUSCH COMPANIES, INC.
By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance

BRANDBREW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-75696

 

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance
COBREW NV/SA
By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance
By:  

/s/ Peter Suy

  Name: Peter Suy
  Title:   Director Finance Services

 

23


INBEV NEDERLAND N.V.
By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:   Senior Legal Counsel Corporate,
Finance Governance
AB INBEV FRANCE S.A.S.
By:  

/s/ Emilie Ruyant

  Name: Emilie Ruyant
  Title:   Legal Director
INTERBREW INTERNATIONAL B.V.
By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:   Senior Legal Counsel, Corporate
Finance and Governance

INTERBREW CENTRAL EUROPEAN HOLDING B.V.

By:  

/s/ Gert Boulangé

  Name: Gert Boulangé
  Title:   Tax Director
By:  

/s/ Liesbeth Hellemans

  Name: Liesbeth Hellemans
  Title:   Senior Legal Counsel, Corporate
Finance and Governance
NIMBUSPATH LIMITED
By:  

/s/ Claude Bahoshy

  Name: Claude Bahoshy
  Title:   Director

AMBREW S.A.

a société anonyme with its registered address at 5, Parc d’Activité Syrdall, L-5365 Luxembourg and registered with the Luxembourg register of commerce and companies under number B-99525

 

By:  

/s/ Benoit Loore

  Name: Benoit Loore
  Title:   VP Legal Corporate and Compliance

 

24


J.P. MORGAN SECURITIES INC.
By:  

/s/ Maria Sramek

  Name:   Maria Sramek
  Title:   Executive Director
BANC OF AMERICA SECURITIES LLC
By:  

/s/ Brendan Hauley

  Name:   Brendan Hauley
  Title:   Managing Director
DEUTSCHE BANK SECURITIES INC.
By:  

/s/ Nigel W.H. Cree

  Name:   Nigel W.H. Cree
  Title:   Managing Director, Debt Syndicate
By:  

/s/ Jacob Gearhart

  Name:   Jacob Gearhart
  Title:   Director, Debt Syndicate

 

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Schedule 1

Subsidiary Guarantors

 

Name

  

Jurisdiction of Incorporation

InBev Belgium SA/NV    Belgium
Anheuser-Busch Companies, Inc.    Delaware
BrandBrew S.A.    Luxembourg
CoBrew NV/SA    Belgium
InBev Nederland N.V.    Netherlands (Corporate Seat Breda)
AB InBev France S.A.S.    France
Interbrew International B.V.    Netherlands (Corporate Seat Breda)
Interbrew Central European Holding B.V.    Netherlands (Corporate Seat Breda)
Nimbuspath Limited    United Kingdom
AmBrew S.A.    Luxembourg

 

26

EXHIBIT 5.1

November 30, 2009

Anheuser-Busch InBev Worldwide Inc.,

1209 Orange Street,

    Wilmington, DE 19801.

Ladies and Gentlemen:

In connection with the registration under the Securities Act of 1933, as amended (the “Act”), of (i) $1,500,000,000 aggregate principal amount of 3.000% Notes due 2012, $1,250,000,000 aggregate principal amount of 4.125% Notes due 2015, $2,250,000,000 aggregate principal amount of 5.375% Notes due 2020 and $500,000,000 aggregate principal amount of 6.375% Notes due 2040 (collectively, the “Notes”), of Anheuser-Busch InBev Worldwide Inc., a Delaware corporation (the “Issuer”), to be issued in exchange for the Issuers’ outstanding 3.000% Notes due 2012, 4.125% Notes due 2015, 5.375% Notes due 2020 and 6.375% Notes due 2040, respectively, pursuant to the Indenture, dated as of October 16, 2009, as supplemented by the First Supplemental Indenture, dated October 16, 2009, the Second Supplemental Indenture, dated as of October 16, 2009, the Third Supplemental Indenture, dated as of October 16, 2009, and the Fourth Supplemental Indenture, dated as of October 16, 2009 and the Fifth Supplemental Indenture, dated November 27, 2009 (collectively, the “Indenture”), each by and among the Issuer, Anheuser-Busch InBev NV/SA (the “Parent Guarantor”) and each of the subsidiary guarantors listed on Annex A hereto (the “Subsidiary Guarantors”, and together with the Parent Guarantor, the “Guarantors”) and the Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and (ii) the Guarantees (the “Guarantees”) of each of the Guarantors endorsed upon the Notes, we, as your counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion.

Upon the basis of such examination, we advise you that, in our opinion, when (i) the registration statement on Form F-4 relating to the Notes and the Guarantees (the “Registration Statement”) has become effective under the Act, (ii) the terms of the Notes and the Guarantees and of their issuance and exchange have been duly established in conformity with the Indenture so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Issuer or any of the Guarantors and so as to comply with any requirement or restriction imposed by any


court or governmental body having jurisdiction over the Issuer or any of the Guarantors, and (iii) the Notes and the Guarantees have been duly executed and, in the case of the Notes, authenticated in accordance with the Indenture and issued and exchanged as contemplated by the Registration Statement, (1) the Notes will constitute valid and legally binding obligations of the Issuer and (2) the Guarantees will constitute valid and legally binding obligations of the respective Guarantors, subject in each case, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

The foregoing opinion is limited to the Federal laws of the United States, the laws of the States of New York and Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction or as of any later date. For purposes of our opinion, we have, with your approval, assumed that (i) BrandBrew S.A. and AmBrew S.A. (the “Luxembourg Guarantors”) are validly existing as companies limited by shares ( sociétés anonymes ) under the laws of Luxembourg, (ii) Cobrew NV/SA, InBev Belgium SA/NV and Anheuser-Busch InBev SA/NV are validly existing as Belgian companies ( société anonyme/naamloze vennotschap ) under the laws of Belgium (the “Belgian Guarantors”), (iii) AB InBev France S.A.S. is validly existing as a société par actions simplifiée under the laws of France (the “French Guarantor”), (iv) Interbrew International B.V. and Interbrew Central European Holding B.V. are validly existing as private companies with limited liability ( besloten vennootschnap met beperkte aansprakelijkheid ) under Dutch law and InBev Nederland N.V. is validly existing as a limited liability company ( naamloze vennootschap ) under Dutch law (collectively, the “Dutch Guarantors”), (v) Nimbuspath Limited is validly existing as a company incorporated in England under the Companies Act 1985 (the “English Guarantor”, and together with the Luxembourg Guarantors, the Belgian Guarantors, the French Guarantor and the Dutch Guarantors, the “Foreign Guarantors”), (vi) the Indenture has been duly authorized, executed and delivered by each Foreign Guarantor under the laws of its jurisdiction of organization, (vii) the execution and delivery of the Indenture has not resulted in any breach or violation of, or conflict with, any Luxembourg, Belgian, French, Dutch or English statute, rule or regulation and (viii) the provisions of the Indenture designating the law of the State of New York as the governing law for the Indenture are valid and binding on each Foreign Guarantor under the laws of its jurisdiction of organization. We note that, with respect to all matters of Belgian law, Dutch law, Luxembourg law, French law and English law, you are relying upon the opinions of Linklaters LLP, which are also filed as exhibits to the Registration Statement.

Also, we have relied as to certain factual matters on information obtained from public officials, officers of the Issuers and the Guarantors and other sources believed by us to be responsible, and we have assumed that the Indenture has been duly authorized, executed and delivered by the Trustee thereunder, that the Notes and the Guarantees endorsed thereon will conform to the specimens thereof examined by us and


that the signatures on all documents examined by us are genuine, assumptions which we have not independently verified.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading “Validity of the New Notes” in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.

 

Very truly yours,
/s/ Sullivan & Cromwell


Annex A

Subsidiary Guarantors

 

Subsidiary Guarantor     

Jurisdiction of Incorporation or

Organization

InBev Belgium SA/NV      Belgium
Cobrew NV/SA      Belgium
Anheuser-Busch Companies, Inc.      Delaware
AB InBev France S.A.S.      France
AmBrew S.A.      Luxembourg
BrandBrew S.A.      Luxembourg
Interbrew Central European Holding B.V.      The Netherlands
Interbrew International B.V.      The Netherlands
InBev Nederland N.V.      The Netherlands
Nimbuspath Limited      United Kingdom

EXHIBIT 5.2

 

Avocats à la Cour de Paris       Linklaters LLP

Solicitors of the Senior Courts of England and Wales

  

25 rue de Marignan

75008 Paris

Telephone (+33) 1 56 43 56 43

Facsimile (+33) 1 43 59 41 96

Palais J 030

 

To:   

Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street

Wilmington

Delaware 19801

3 December 2009

Dear Sirs

Anheuser-Busch InBev Worldwide Inc.

Offer to exchange all outstanding U.S.$1,500,000,000 3.000 per cent. Notes due 2012, all outstanding U.S.$1,250,000,000 4.125 per cent. Notes due 2015, all outstanding U.S.$2,250,000,000 5.375 per cent. Notes due 2020 and all outstanding U.S.$500,000,000 6.375 per cent. Notes due 2040 (together, the “Notes”) guaranteed by Anheuser-Busch InBev NV/SA, Brandbrew S.A., Cobrew NV/SA, InBev Belgium SA/NV, AB InBev France S.A.S. (“AB InBev France”), InBev Nederland N.V., Interbrew Central European Holding B.V., Interbrew International B.V., Nimbuspath Limited, Ambrew S.A. and Anheuser-Busch Companies, Inc. (together, the “Guarantors”) for registered U.S.$1,500,000,000 3.000 per cent. Notes due 2012, registered U.S.$1,250,000,000 4.125 per cent. Notes due 2015, registered U.S.$2,250,000,000 5.375 per cent. Notes due 2020 and registered U.S.$500,000,000 6.375 per cent. Notes due 2040 (together, the “Exchange Notes”)

 

1 We have acted as your French legal advisers in connection with the registration of the Exchange Notes and the guarantees to be endorsed thereon (the “ Exchange Guarantees ”) under the U.S. Securities Act of 1933 (the “ Securities Act ”). Unless, the context otherwise requires, capitalised terms used in the opinion shall have the meanings given to them in the Schedule hereto.

 

2 This opinion is limited to French law as applied by the French courts and published and in effect on the date of this opinion. It is given on the basis that all matters relating to it will be governed by, and that it (including all terms used in it) will be construed in accordance with, French law. In particular, we express no opinion on matters of United States federal or state law or the laws of any other jurisdiction.

 

3 For the purpose of this opinion we have examined the documents listed and, where appropriate, defined in the Schedule to this opinion. The documents referred to under paragraphs 3 to 5 of the Schedule to this opinion are collectively referred to as the “ Exchange Documents ”. Terms defined in the Exchange Documents shall have the same meaning herein, unless the context requires otherwise and subject to any contrary indication.


4 We have assumed that:

 

  4.1 all copy documents conform to the originals and all originals are genuine, complete and up-to-date;

 

  4.2 each signature is the genuine signature of the individual concerned;

 

  4.3 the statuts and other documents of AB InBev France referred to in the Schedule to this opinion are up-to-date;

 

  4.4 the decision referred to in paragraph 7 of the Schedule hereto was validly passed and remains in full force and effect without modification;

 

  4.5 the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes are within the capacity and powers of, and have been validly authorised and signed by, each party other than AB InBev France;

 

  4.6 the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes constitute legal, valid, binding and enforceable obligations of AB InBev France under the laws of the State of New York;

 

  4.7 AB InBev France is deriving adequate corporate benefit and consideration from the entering into the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes; the obligations of AB InBev France under the Guarantees and the Exchange Guarantees will not exceed the financial capacities of AB InBev France;

 

  4.8 the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes will be notified and approved pursuant to and in accordance with Article L.227-10 of the French Code de commerce and the statuts of AB InBev France;

 

  4.9 the Exchange Guarantees will be identical in all respects to the Guarantees dated 16 October 2009, save for such changes as are not material to the matters on which we opine.

 

5 In our opinion:

 

  5.1 AB InBev France is existing as a société par actions simplifiée under the laws of France and is duly registered with the Registre du Commerce et des Sociétés of Lille with the number 321 336 208 .

 

  5.2 The extract of the registration particulars ( extrait K-bis ( Infogreffe )) issued by the Lille Commercial Court ( greffe du Tribunal de commerce ) with respect to AB InBev France reveals no notice of judicial reorganisation ( redressement judiciaire ), safeguard procedure ( procédure de sauvegarde ), judicial liquidation ( liquidation judiciaire ) or voluntary liquidation ( liquidation volontaire ) filed with the relevant Commercial Court ( greffe du Tribunal de commerce ) as of 1 December 2009 with respect to AB InBev France. Notice of any change affecting the status of AB InBev France may not however be filed immediately at the relevant Commercial Court ( greffe du Tribunal de commerce ) and as a consequence, may not immediately appear on the extract of the registration particulars ( extrait K-bis ).

 

  5.3 AB InBev France has the legal capacity and corporate power to enter into and perform the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes.

 

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  5.4 AB InBev France has taken all necessary corporate action to authorise its entry into and performance of the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes.

 

  5.5 Under French law, there are no governmental or regulatory consents, approvals or authorisations required by AB InBev France for its entry into and performance of the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes.

 

  5.6 When the Registration Statement has become effective under the Securities Act and the Exchange Notes (including the endorsement of the Exchange Guarantees on the Exchange Notes) have been duly executed and authenticated in accordance with the terms of the Indenture and duly issued and delivered in exchange for the Notes, there is no reason insofar as French law is concerned why the obligations of AB InBev France under the Exchange Guarantees are not valid and binding upon AB InBev France.

 

  5.7 The entry into and performance of the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes by AB InBev France does not violate the statuts of AB InBev France or any applicable laws, decrees or published administrative regulations of a governmental or regulatory body of the Republic of France.

 

  5.8 The submission by AB InBev France in the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes to the jurisdiction of the courts of the State of New York (assuming it to be effective in such courts) is irrevocable and binding on AB InBev France. The choice of the laws of the State of New York to govern the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes is valid and would be given effect in any proceedings brought against AB InBev France in the French courts, provided that the relevant content of the laws of the State of New York is duly proved and not held to be contrary to French ordre public international . The obligations of AB InBev France in the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes are not, in our opinion, contrary to French ordre public international .

 

  5.9 A final judgment for a sum of money in relation to the Indenture, or the Exchange Guarantees to be endorsed on the Exchange Notes obtained against AB InBev France in the New York courts would be recognised and enforceable by the French courts subject to and in accordance with Article 509 et seq. of the French Code de Procédure Civile unless the New York courts are held by the French courts either (i) not to have jurisdiction over AB InBev France according to French principles of forum selection; (ii) to have been used fraudulently in order to escape the jurisdiction of a court more closely related to the dispute; (iii) not to have complied with due process ( ordre public procédural ) or to have breached French public policy ( ordre public international ).

 

  5.10

In the absence of any statement of practice or judicial precedent issued by the French tax authorities in respect of payments made under a guarantee agreement, we do not express any opinion as to whether the payments made by AB InBev France under the Guarantees are subject to withholding tax in France, but we note that: (i) in accordance with one interpretation of French tax law, payments made under a guarantee are to be treated as a payment in lieu of payments to be made on the Notes by the relevant Issuer and accordingly, the payments to be made by AB InBev France under the Guarantees should be exempt from withholding tax in France to the extent that they would be exempt from such tax if paid by the relevant Issuer itself; (ii) in accordance with another interpretation of French tax law, payments made under a guarantee are to be treated as a

 

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payment independent from the payments to be made under the Notes and accordingly, and in the absence of any specific provision to the contrary in the French tax code, such payments should be exempt from withholding tax in France.

 

  5.11 No stamp duties ( droits d’enregistrement ) or similar taxes are payable in France in connection with the signing or enforcement of the Indenture or the Exchange Guarantees to be endorsed on the Exchange Notes. Subject to paragraph 5.10 above, we have not been asked to, and we do not, express any opinion as to any other taxation (including value added tax) which will or may arise as a result of any transaction effected in connection with the Indenture or the Exchange Guarantees to be endorsed on the Exchange Notes.

 

6 The term “ enforceable ” as used above means that the obligations assumed by AB InBev France under the Indenture, and the Exchange Guarantees to be endorsed on the Exchange Notes are of a type which the French courts enforce. It does not mean that those obligations will necessarily be enforced in all circumstances in accordance with their terms. In particular:

 

  6.1 Enforcement may be limited by conciliation, sauvegarde, redressement judiciaire, liquidation judiciaire (including a provision that creditors’ proofs of debts denominated in foreign currencies would be converted into euros at the rate applicable on the date of the court decision instituting the redressement judiciaire proceedings), insolvency, moratorium and other laws of general application affecting the rights of creditors.

 

  6.2 Claims may become barred by reason of prescription or may become subject to defences of set-off ( compensation ) or counterclaim ( demande reconventionnelle ).

 

  6.3 Specific performance ( exécution en nature ) may not be available where damages are considered by a French court to be the only possible remedy.

 

  6.4 In respect of payment obligations, a French court has power under Articles 1244-1 et seq. of the French Civil Code to grant time to the debtor (not in excess of two years), taking into account the position of the debtor and the needs of the creditor. The court is also empowered to decide that the deferred amounts shall bear interest at a reduced rate (but at least equal to the legal rate or taux légal ) or that payments made by the debtor must be applied in priority in or towards reduction of the principal due, notwithstanding any contractual provision to the contrary; any such decision by the court will suspend all enforcement proceedings instituted by the creditor against his debtor for the payment of his debt and all extra interest or penalties for late payment shall cease to be due during the grace period fixed by the court.

 

7 This opinion is subject to the following:

 

  7.1 Without limiting the generality of the foregoing, we have made no investigation as to the accuracy and exhaustiveness of the facts (including statements of foreign law) contained in the documents referred to in this opinion.

 

  7.2 Damages, liquidated damages and penalties may be varied by a French court if they amount to a manifestly excessive or derisory penalty under French law.

 

  7.3 A certificate, determination, notification or opinion might be held by the French courts to be inconclusive if it could be shown to have an unreasonable or arbitrary basis or in the event of manifest error despite any provision in any document to the contrary.

 

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  7.4 In order to enforce in France any document in connection with the Indenture and the Exchange Guarantees to be endorsed on the Exchange Notes which are written in English, a certified translation into French of such document will be required.

 

  7.5 We express no opinion on the enforceability under French law, or before the French courts, of any provision in the Indenture or the Exchange Guarantees to be endorsed on the Exchange Notes requiring increased payments by AB InBev France in respect of any withholding or deduction that may be required in France on account of any tax.

 

  7.6 This opinion is strictly confined to the specific matters set forth in paragraph 5 and should not be read as extending by implication to any other matter in connection with the transaction contemplated therein. We shall have no duty to update this opinion as to any matter (including any changes in French law) that may occur after the date of this letter and which may affect the matters addressed herein.

 

  7.7 It should be understood that we have not been responsible for investigating or verifying the accuracy of the facts, including statements of foreign law, or the reasonableness of any statements of opinion, contained in the Registration Statement, or that no material facts have been omitted from it.

 

  7.8 Insofar as this opinion relates to the obligations of AB InBev France, it is given on the assumption that they have been entered into in good faith and for the purpose of carrying out AB InBev France’s business and that, at the time they were entered into, there were reasonable grounds for believing that to do so would benefit AB InBev France.

 

8 We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

 

Yours faithfully
/s/ Gilles Endréo
Gilles Endréo
Avocat à la Cour

 

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Schedule

 

1 A copy of the constitutive documents ( statuts ) of AB InBev France dated 29 June 2009.

 

2 An extract of the registration particulars ( extrait k-bis (Infogreffe) ) relating to AB InBev France dated 1 December 2009 issued by the Registre du commerce et des sociétés of Lille.

 

3 An executed copy of the original indenture dated 16 October 2009 (the “ Initial Indenture ”) between Anheuser-Busch InBev Worldwide Inc as Issuer, the Guarantors party thereto from time to time (including AB Inbev France) and the Trustee.

 

4 Copies of the first supplemental indenture dated 16 October 2009 relating to the U.S.$1,500,000,000 3.000 per cent. Notes due 2012 (the “ First Supplemental Indenture ”), the second supplemental indenture dated 16 October 2009 relating to the U.S.$1,250,000,000 4.125 per cent. Notes due 2015 (the “ Second Supplemental Indenture ”), the third supplemental indenture dated 16 October 2009 relating to the U.S.$2,250,000,000 5.375 per cent. Notes due 2020 (the “ Third Supplemental Indenture ”), the fourth supplemental indenture dated 16 October 2009 relating to the U.S.$500,000,000 6.375 per cent. Notes due 2040 (the “ Fourth Supplemental Indenture ”) and the fifth supplemental indenture dated 27 November 2009 relating to the amendment of Section 209 of the Initial Indenture (the “ Fifth Supplemental Indenture ” and, together with the Initial Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “ Indenture ”).

 

5 The Form F-4 Registration Statement as filed with the Securities and Exchange Commission on 3 December 2009 (the “ Registration Statement ”).

 

6 Executed copies of the guarantees of AB InBev France dated 16 October 2009 related to the Notes (the “ Guarantees ”).

 

7 A copy of the power of attorney dated 12 May 2009 by which Christian Cools, Président of AB InBev France, delegates to Nicolas Bonnel and Emilie Ruyant, acting jointly or separately, the power to issue the Guarantees on behalf of AB InBev France and to sign any document relating to such issue

 

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EXHIBIT 5.3

 

Avocats   

35 Avenue John F. Kennedy

P.O. Box 1107

L-1011 Luxembourg

Telephone (352) 26 08 1

Facsimile (352) 26 08 88 88

patrick.geortay@linklaters.com

 

To:

 

Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street

Wilmington

Delaware 19801

  

3 December 2009

Dear Sirs,

Anheuser-Busch InBev Worldwide Inc. - Offer to exchange all outstanding U.S.$1,500,000,000 3.000% Notes due 2012, all outstanding U.S.$1,250,000,000 4.125% Notes due 2015, all outstanding U.S.$2,250,000,000 5.375% Notes due 2020 and all outstanding U.S.$500,000,000 6.375% Notes due 2040 (together, the “Initial Notes”) issued under the Indenture (as defined below) for registered U.S.$1,500,000,000 3.000 per cent. Notes due 2012, registered U.S.$1,250,000,000 4.125 per cent. Notes due 2015, registered U.S.$2,250,000,000 5.375 per cent. Notes due 2020 and registered U.S.$500,000,000 6.375 per cent. Notes due 2040 (together, the “Exchange Notes”)

 

1 Introduction

We have acted as Luxembourg legal advisers to Anheuser-Busch InBev N.V./S.A. in connection with the registration of the Exchange Notes and the guarantees to be endorsed thereon (the “ Exchange Guarantees ”) under the U.S. Securities Act of 1933 (the “ Securities Act ”). The Exchange Guarantees are granted by, among others, Brandbrew S.A., a company incorporated and existing under the laws of the Grand Duchy of Luxembourg (“ Luxembourg ”), having its registered office at 5, Parc d’Activité Syrdall, L-5365 Münsbach, and registered with the Luxembourg Register of Commerce and Companies under the number B-75696 (“ Brandbrew ”) and by Ambrew S.A., a company incorporated and existing under the laws of Luxembourg, having its registered office at 5, Parc d’Activité Syrdall, L-5365 Münsbach, and registered with the Luxembourg Register of Commerce and Companies under the number B-99.525 (“ Ambrew ” and together with Brandbrew, the “ Guarantors ”).

We have taken instructions from Anheuser-Busch InBev N.V./S.A. and the Guarantors.

This communication is confidential and may be privileged or otherwise protected by work product immunity.

Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. It is a law firm regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of Linklaters LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP together with a list of those non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England or on www.linklaters.com and such persons are either solicitors, registered foreign lawyers or European lawyers.

Please refer to www.linklaters.com/regulation for important information on our regulatory position.


2 Scope of Inquiry

For the purpose of this opinion, we have examined the following documents:

 

  2.1 the Form F-4 Registration Statement dated 3 December 2009 (the “ Registration Statement ”) as filed with the Securities and Exchange Commission;

 

  2.2 the base indenture dated 16 October 2009 between, among others, the Issuer, Anheuser-Busch InBev N.V./S.A. as Parent Guarantor, the Guarantors and The Bank of New York Mellon Trust Company, N.A. as Trustee (the “ Base Indenture ”);

 

  2.3 the first supplemental indenture dated 16 October 2009 between, among others, the Issuer, Anheuser-Busch InBev N.V./S.A. as Parent Guarantor, the Guarantors and The Bank of New York Mellon Trust Company, N.A. as Trustee relating to the U.S.$ 1,500,000,000 3.000% Notes due 2012 (the “ First Supplemental Indenture ”), the second supplemental indenture dated 16 October 2009 relating to the U.S.$ 1,250,000,000 4.125% Notes due 2015 (the “ Second Supplemental Indenture ”), the third supplemental indenture dated 16 October 2009 relating to the U.S.$ 2,250,000,000 5.375% Notes due 2020 (the “ Third Supplemental Indenture ”), the fourth supplemental indenture dated 16 October 2009 relating to the U.S.$ 500,000,000 6.375% Notes due 2040 (the “ Fourth Supplemental Indenture ”) and the fifth supplemental indenture dated 27 November 2009 relating to the amendment of Section 209 of the Base Indenture (including, as a schedule thereto, the form of Exchange Notes and Exchange Guarantees) (the “ Fifth Supplemental Indenture ” and together with the Base Indenture, the First Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “ Indenture ”);

 

  2.4 the coordinated articles of incorporation of Brandbrew dated 25 July 2007 (the “ Brandbrew Articles ”);

 

  2.5 the coordinated articles of incorporation of Ambrew dated 18 November 2008 (the “ Ambrew Articles ” and together with the Brandbrew Articles, the “ Articles ”);

 

  2.6 an excerpt of the Luxembourg Register of Commerce and Companies pertaining to Brandbrew dated 26 November 2009 (the “ Brandbrew Excerpt ”);

 

2


  2.7 an excerpt of the Luxembourg Register of Commerce and Companies pertaining to Ambrew dated 26 November 2009 (the “ Ambrew Excerpt ” and together with the Brandbrew Excerpt, the “ Excerpts ”);

 

  2.8 a copy of the circular resolutions of all directors of Brandbrew adopted on 9 October 2009 and 14 October 2009, approving the granting of a guarantee in relation to the Notes and the entering by Brandbrew into the Documents (as defined below) (the “ Brandbrew Resolutions ”);

 

  2.9 a copy of the circular resolutions of all directors of Ambrew adopted on 9 October 2009 and 14 October 2009, approving the granting of a guarantee in relation to the Notes and the entering by Ambrew into the Documents (as defined below) (the “ Ambrew Resolutions ” and together with the Brandbrew Resolutions, the “ Resolutions ”);

 

  2.10 a copy of the power of attorney and appointment granted to Mr. John Blood by Benoit Loore in relation to the execution of the Registration Statement on behalf of AmBrew (the “ First PoA ”);

 

  2.11 a copy of the power of attorney and appointment granted to Mr. John Blood by Benoit Loore in relation to the execution of the Registration Statement on behalf of BrandBrew (the “ Second PoA ”);

 

  2.12 a copy of the power of attorney granted by Gert Bert Maria Magis and Jan Craps in relation to the execution of the Registration Statement and the registration of the Exchange Notes under the Securities Act on behalf of AmBrew (the “ Third PoA ”);

 

  2.13 a copy of the power of attorney granted by Gert Bert Maria Magis and Jean-Louis Van de Perre in relation to the execution of the Registration Statement and the registration of the Exchange Notes under the Securities Act on behalf of BrandBrew (the “ Fourth PoA ” and together with the First PoA, the Second PoA and the Third PoA, the “ PoAs ”);

 

  2.14 a non-bankruptcy certificate issued on 3 December 2009 by the Clerk’s office of the Luxembourg District Court with respect to Brandbrew (the “ Brandbrew Non-Bankruptcy Certificate ”); and

 

  2.15 a non-bankruptcy certificate issued on 3 December 2009 by the Clerk’s office of the Luxembourg District Court with respect to Ambrew (the “ Ambrew Non-Bankruptcy Certificate ” and together with the Brandbrew Non-Bankruptcy Certificate, the “ Non-Bankruptcy Certificates ”).

The documents referred to under 2.1 to 2.3 being collectively referred to as the “ Documents ”.

Terms defined in the Documents shall have the same meaning herein, unless the context requires otherwise and subject to any contrary indication.

 

3 Assumptions

For the purposes of this opinion, we have assumed:

 

  3.1 the genuineness of all signatures on all documents submitted to us as originals and the completeness and conformity to originals thereof of all documents submitted to us as copies or specimens, and that each signature on an Document is the signature of the individual so identified and the signature of an individual who is not identified is the genuine signature of a person duly authorized to represent the relevant party to the Documents;

 

3


  3.2 the due authorisation, execution and delivery of the Documents by the parties thereto other than the Guarantors, and the power, authority and legal right of the parties thereto other than the Guarantors to enter into, execute, deliver and perform their respective obligations thereunder, and compliance with all applicable laws and regulations, other than Luxembourg law;

 

  3.3 that all authorisations, approvals and consents of any country other than Luxembourg which may be required in connection with the execution, delivery and performance of the Documents have been or will be obtained;

 

  3.4 that the Documents and other documents in respect of the Exchange Notes are valid, binding and enforceable under all applicable laws other than Luxembourg law;

 

  3.5 that the Articles remain in full force and effect without modification;

 

  3.6 that the Resolutions are true records of the proceedings described in them, were validly taken and remain in full force and effect without modification;

 

  3.7 that the PoAs were validly granted, have not been revoked and remain in full force and effect without modification;

 

  3.8 that the Guarantors derive from the Documents a direct or indirect commercial or financial benefit;

 

  3.9 the choice of the laws of the State of New York as the governing law of the Documents has been made in good faith and would be regarded as a valid and binding selection as a matter of law in the State of New York, and would be upheld by the Courts of the State of New York and the laws of all other relevant jurisdictions (other than the laws of Luxembourg);

 

  3.10 that the Excerpts and the Non-Bankruptcy Certificates are up-to-date;

 

  3.11 that there are no dealings between the parties to the Documents that affect the rights and obligations of the parties to the Documents;

 

  3.12 that the Guarantors have their central administration, within the meaning of the law of 10 August 1915 on commercial companies, as amended, and/or the centre of their main interests, within the meaning of Council Regulation EC/1346/2000 of 29 May 2000 on insolvency proceedings, in Luxembourg;

 

  3.13 that the Exchange Guarantees will be (i) identical to the guarantees given in respect of the Initial Notes, save for those changes reflected in the Fifth Supplemental Indenture or for those changes which are not changes of substance and (ii) issued in accordance with the terms and conditions of the Indenture or an indenture identical to the form thereof, save for those changes which are not changes of substance.

 

  3.14 that the Exchange Notes will not be the subject of a public offer in Luxembourg or a listing or admission to trading on a market in Luxembourg, unless the relevant requirements of Luxembourg law concerning the public offer or listing or admission to trading on a market of securities have been fulfilled; and

 

4


  3.15 that there is nothing under any law (other than Luxembourg law) which would or might affect the opinions hereinafter appearing.

 

4 Opinion

Based on the documents referred to in section 2 above, subject to the assumptions made in section 3 above and subject to the qualifications in section 5 below and subject further to any matters not disclosed to us, we are of the following opinion:

 

  4.1 The Guarantors have been duly incorporated for an unlimited duration and are validly existing as companies limited by shares ( sociétés anonymes ) under the laws of Luxembourg. As of the date of this opinion and based on the Non-Bankruptcy Certificates, the Guarantors are not subject to bankruptcy (“ faillite ”), reprieve from payment (“ sursis de paiement”), controlled management (“gestion contrôlée”) or an arrangement with creditors (“concordat préventif de la faillite”) in Luxembourg.

 

  4.2 The Guarantors have full power, capacity and authority under their respective Articles to enter into and execute the Documents and the Exchange Notes (including the endorsement of the Exchange Guarantees on the Exchange Notes) and to perform their respective obligations under the Documents in accordance with their terms.

 

  4.3 The Documents and the Exchange Notes (including the endorsement of the Exchange Guarantees on the Exchange Notes) have been duly authorised by and on behalf of the Guarantors.

 

  4.4 The Documents have been duly executed.

 

  4.5 There is no reason so far as Luxembourg law is concerned why, in any action in the Luxembourg courts where the laws of the State of New York are pleaded and proved, the obligations of the Guarantors under the Indenture would not be valid, legal, binding and enforceable in accordance with their terms.

 

  4.6 The execution of the Documents and the Exchange Notes (including the endorsement of the Exchange Guarantees on the Exchange Notes) by the Guarantors and the performance of their respective obligations thereunder do not conflict with or result in a breach of any of the terms or provisions of the Articles or any law, public rule or regulation applicable to the Guarantors in Luxembourg currently in force.

 

  4.7 No authorisations, consents or approvals are required from any governmental authorities or agencies or other official bodies in Luxembourg in connection with the authorisation, execution or delivery of the Documents, the Exchange Notes and/or the Exchange Guarantees or the performance by the Guarantors of their respective obligations under any of them.

 

  4.8 It is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of the Documents, the Exchange Notes and the Exchange Guarantees that any documents be filed, recorded or enrolled with any governmental department or other authority in Luxembourg.

 

  4.9 Luxembourg courts will recognize the choice of the laws of the State of New York as the governing law of the Documents, the Exchange Notes and/or the Exchange Guarantees subject to Luxembourg overriding statutes and unless the substantive law chosen by the parties is incompatible with Luxembourg international public policy.

 

  4.10 The consents, where relevant, to the jurisdiction of the Courts of New York or New York State or federal courts sitting in the Borough of Manhattan, the City of New York, New York, as the case may be, as contained in the Documents, the Exchange Notes and/or the Exchange Guarantees are valid and binding in any action in the Luxembourg courts.

 

5


  4.11 There are no stamp, registration or similar taxes, duties or charges under the laws of Luxembourg payable in connection with the performance of the Guarantors’ obligations under the Documents, the Exchange Notes and/or the Exchange Guarantees. Depending on the nature of the document at stake, a registration fee (“ droit d’enregistrement ”) of €12 and/or of 0.24% ad valorem will be due if any of the Documents, the Exchange Notes and/or the Exchange Guarantees are voluntarily presented to the registration formalities or are adduced as evidence before a Luxembourg court or exhibited before a Luxembourg public authority (“ autorité constituée ”), should such court or public authority order the registration of such Document, Exchange Notes and/or Exchange Guarantee.

 

  4.12 The Guarantors are not entitled to any immunity in Luxembourg on the basis of sovereignty or otherwise in respect of its obligations under the Documents.

 

  4.13 A final civil and commercial judgment obtained in the Courts of the State of New York, United States of America in respect of the Indenture will be enforceable in Luxembourg subject to Luxembourg ordinary rules on enforcement (“ exequatur ”) of foreign judgments. Pursuant to such rules, an enforceable judgment rendered by any US court based on contract would not directly be enforceable in Luxembourg. However, a party who obtains a judgment in a US court may initiate enforcement proceedings in Luxembourg (“ exequatur ”), by requesting enforcement of the US judgment before the competent District Court (“ Tribunal d’Arrondissement ”), pursuant to Section 678 of the New Luxembourg Code of Civil Procedure. The District Court will authorize the enforcement in Luxembourg of the US judgment if it is satisfied that the following conditions are met:

 

   

the US judgment is enforceable (“ exécutoire ”) in the United States;

 

   

the jurisdiction of the US court is founded according to Luxembourg private international law rules and to the applicable domestic US jurisdiction rules;

 

   

the US court has applied to the dispute the substantive law which would have been applied by Luxembourg courts;

 

   

the principles of natural justice have been complied with; and

 

   

the US judgment does not contravene the Luxembourg international public policy.

Luxembourg courts do currently not review the merits of the case in enforcement proceedings, although there is no clear statutory prohibition of such review.

 

  4.14 When the Registration Statement has become effective under the Securities Act and the Exchange Notes (including the endorsement of the Exchange Guarantees on the Exchange Notes) have been duly executed and authenticated in accordance with the terms of the Indenture and duly issued and delivered in exchange for the Initial Notes, there is no reason insofar as Luxembourg law is concerned why the obligations of the Guarantors under the Exchange Guarantees would not be valid and binding upon the Guarantors.

 

5 Qualifications

Our opinion as to the enforceability of the Documents is subject to the following qualifications:

 

  5.1 The binding effect and validity of the Documents, the Exchange Notes and the Exchange Guarantees and their enforceability against the Guarantors are subject to all limitations by reason of bankruptcy, insolvency, moratorium, controlled management, general settlement with creditors, reorganisation, or similar laws relating to or affecting the rights of creditors generally.

 

6


  5.2 Any obligation to pay a sum of money in a currency other than the euro will be enforceable in Luxembourg in terms of euro only. Monetary judgments may be expressed in a foreign currency or its euro equivalent at the time of judgment or payment.

 

  5.3 Certain obligations other than payment of money obligations may not be the subject of specific performance pursuant to Court orders, but may result in damages only.

 

  5.4 Obligations to make payment that may be regarded as penalties might not be enforceable under Luxembourg law.

 

  5.5 Any certificate or determination which would by contract be deemed to be conclusive may not be upheld in a Luxembourg Court.

 

  5.6 A Luxembourg Court may refuse to give effect to a purported contractual obligation to pay costs imposed upon another party in respect of the costs of any unsuccessful litigation brought against that party before a Luxembourg Court and the Luxembourg Court may not award by way of costs all of the expenditure incurred by a successful litigant in proceedings brought before a Luxembourg Court.

 

  5.7 The provisions in jurisdiction clauses contained in the Documents, the Exchange Notes and/or the Exchange Guarantees whereby the taking of proceedings in one or more jurisdictions shall not preclude the taking of proceedings in any other jurisdiction, whether concurrently or not, might not be enforceable in a Luxembourg Court. If proceedings were previously commenced between the same parties and on the same grounds as proceedings in Luxembourg, a plea of pendency might (and, in some cases, has to) be entered in the Luxembourg Court and proceedings stayed pending the termination of the proceedings abroad.

 

  5.8 A contractual provision allowing the service of process against the Guarantors to a service agent or any other third party appointed to such effect could be overridden by Luxembourg statutory provisions allowing the valid service of process against the Guarantors in accordance with applicable laws at the registered office of each of the Guarantors.

 

  5.9 Claims may become barred under applicable statutory limitations period rules.

 

  5.10 Claims may be or become subject to applicable defenses of set-off or counterclaims.

 

  5.11 Any term of any of the agreements herein referred to may be amended orally or by conduct by the parties thereto, notwithstanding any provision to the contrary contained therein.

 

  5.12 We express no opinion as to tax matters save for the opinions in 4.11.

 

  5.13 We express no opinion as to accounting matters.

 

  5.14 Luxembourg courts may award payment terms (i.e. an extended period within which the debtor is to make payment) in exceptional circumstances.

 

  5.15 We express no opinion as to the accuracy of any representations and/or warranties given by the Guarantors (expressly or impliedly) under or by virtue of the Documents, the Exchange Notes and/or the Exchange Guarantees save if and insofar as the matters represented and/or warranted are the subject of specific opinions on this matter.

 

7


  5.16 A translation into the French or German language of the Documents, the Exchange Notes and/or the Exchange Guarantees may be required if they were adduced as evidence before a Luxembourg Court or before any other official authority (“ autorité constituée ”) in Luxembourg.

 

  5.17 We reserve our opinion as to the extent to which Luxembourg courts would, in the event of any relevant illegality or unenforceability, sever the offending provisions and enforce the remainder of the transaction of which such provisions form a part, notwithstanding any express provisions in this regard.

 

  5.18 Where any obligations are to be performed or observed, or are based upon matters arising in a jurisdiction outside Luxembourg, they may not be enforceable under Luxembourg law if and to the extent that such performance or observance would be unlawful, unenforceable, or contrary to public policy under the laws of such other jurisdiction.

 

  5.19 In Luxembourg, enforcement may be limited by the general principle of good faith.

 

  5.20 The enforcement in the Luxembourg courts of the Documents, the Exchange Notes and/or the Exchange Guarantees will require that the content of the laws of the State of New York, by which they are expressed to be governed, be positively proven by the parties, if they require the application of the laws of the State of New York.

 

  5.21 Our opinion that the Guarantors are existing is based on the Articles, the Non-Bankruptcy Certificates and the Extracts pertaining to them. It should be noted that the Non-Bankruptcy Certificates and the Extracts are not capable of revealing conclusively whether or not a winding up or administration petition or order has been presented or made, a receiver appointed, an arrangement with creditors proposed or approved or any other insolvency proceedings commenced.

 

  5.22 Under Luxembourg law it is acceptable for a Luxembourg company to grant a guarantee for the obligations of group companies, if the granting of such guarantee is justified by the group’s interest. In such a case, it is generally considered that the guarantees / third party security granted for group purposes may not exceed the guarantor’s financial capabilities. In the case at hand, even though this is a factual matter on which we do not opine, the combination in the guarantee limitation language referred to in section 209 of the Base Indenture of (i) no inclusion in the maximum aggregate liability of Ambrew of Ambrew’s other liabilities for group purposes under the agreements to which Ambrew is or will become a party and (ii) limitation of the liability of the Guarantors to 100% (one hundred percent) of their own capital and their subordinated debt might result in the guarantees to exceed the Guarantors’ financial capabilities.

We are not aware of any published Luxembourg case law in respect of the above. In the absence of any Luxembourg case law, French and/or Belgian authorities may have certain bearing. In case the guarantees exceed the Guarantors’ financial capabilities,

 

  (a) the guarantees could be held null and void and/or unenforceable; and

 

8


  (b) in specific circumstances, the creditors, who have taken advantage of the guarantees, might be liable in tort, in which case damages may be due to harmed third parties.

We are not aware of any French or Belgian authorities which would have decided that the unenforceability would only apply to the excess risk taken by the Guarantors. Even though it sounds sensible to us that there should only be a partial unenforceability in such a case, it is unclear whether this approach would be followed by a court.

 

6 Luxembourg Law

This opinion speaks as of its date and is confined to, and is solely given on the basis of, the laws of Luxembourg as applied by the Luxembourg Courts and as presently in force. We undertake no responsibility to notify any addressee of this opinion of any change in the laws of Luxembourg or their construction or application after the date of this opinion.

In this opinion, Luxembourg legal concepts are expressed in English terms and not in their original French terms. The concepts concerned may not be identical to the concepts described by the same English terms as they exist under the laws of other jurisdictions. This opinion may, therefore, only be relied upon under the express condition that it is given under Luxembourg law and that any issues of interpretation arising thereunder will be governed by Luxembourg law and be brought before a Luxembourg court.

We express no opinion as to any laws other than the laws of Luxembourg and we have assumed that there is nothing in any other law that affects our opinion. In particular, we have made no independent investigation of the laws of the State of New York as the basis for the opinion stated herein and we do not express or imply any opinion on such laws.

 

7 Reliance

We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

Yours faithfully

Linklaters LLP

by

/s/ Patrick Geortay

Patrick Geortay

 

9

EXHIBIT 5.4

 

 

Avocats/Advocaten

    

Linklaters LLP

Rue Brederode 13

B - 1000 Brussels

Telephone (+32) 2 501 94 11

Facsimile (+32) 2 501 94 94

francois.debauw@linklaters.com

gilles.nejman@linklaters.com

 

To: Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street

Wilmington

Delaware 19801

USA

    
     3 December 2009

Dear Sirs

Anheuser-Busch InBev SA/NV (the “Company”)

Offer to exchange all outstanding USD 1,500,000,000 3.000% Notes due 2012, all outstanding USD 1,250,000,000 4.125% Notes due 2015, all outstanding USD 2,250,000,000 5.375% Notes due 2020 and all outstanding USD 500,000,000 6.375% Notes due 2040 (together, the “Notes”) issued by Anheuser-Busch InBev Worldwide Inc., guaranteed by the Company, for registered USD 1,500,000,000 3.000% Notes due 2012, registered USD 1,250,000,000 4.125% Notes due 2015, registered USD 2,250,000,000 5.375% Notes due 2020 and registered USD 500,000,000 6.375% Notes due 2040 (together, the “Exchange Notes”), guaranteed by the Company (the “Exchange”)

 

1 Introduction

We have acted as your Belgian legal advisers in connection with the registration of the Exchange Notes and the guarantees to be endorsed thereon (the “ Exchange Guarantees ”) under the U.S. Securities Act of 1933 (the “ Securities Act ”).

 

2 Belgian Law

This opinion is limited to Belgian law as applied by the Belgian courts and published and in effect on the date of this opinion. It is given on the basis that all matters relating to it will be governed by, and that it (including all terms used in it) will be construed in accordance with, Belgian law. Nothing herein may be construed as an opinion on matters governed by the federal or state laws of the United States of America or the federal or state laws of any other jurisdiction.

This communication is confidential and may be privileged or otherwise protected by work product immunity.

Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. It is a law firm regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of the LLP or an independent consultant or, outside of Belgium, an employee of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP and of the non members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England, or on www.linklaters.com.

Please refer to www.linklaters.com/regulation for important information on Linklaters LLP’s regulatory position.


3 Scope of Inquiry

For the purpose of rendering this opinion, we have examined and relied upon the following documents:

 

(i) a copy of the Form F-4 Registration Statement dated 3 December 2009 as filed with the U.S. Securities and Exchange Commission (the “ Registration Statement ”);

 

(ii) an executed copy of the base indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., the Company as parent guarantor and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Base Indenture ”);

 

(iii) an executed copy of the first supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., the Company as parent guarantor and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ First Supplemental Indenture ”);

 

(iv) an executed copy of the second supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., the Company as parent guarantor and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Second Supplemental Indenture ”);

 

(v) an executed copy of the third supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., the Company as parent guarantor and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Third Supplemental Indenture ”);

 

(vi) an executed copy of the fourth supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., the Company as parent guarantor and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Fourth Supplemental Indenture ”);

 

(vii) an executed copy of the fifth supplemental indenture dated 27 November 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., the Company as parent guarantor and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Fifth Supplemental Indenture ” and, together with the Base Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “ Indenture ”);

 

(viii) an executed copy of the guarantees of the Company dated 16 October 2009 relating to the Notes (the “ Guarantees ”);

 

(ix) a copy of the unanimous written resolution of the directors of the Company dated 7 October 2009 and 13 October 2009 resolving to approve, among others, the Registration Statement and the Issue Documents (as defined below);

 

(x) the co-ordinated articles of association ( statuts / statuten ) of the Company as most recently filed with the Clerk of the Commercial Court of Brussels ( i.e ., the coordination dated 22 October 2009);

 

(xi) a certificate dated 3 December 2009 issued by the Clerk of the Commercial Court of Brussels stating that the Company has not been declared bankrupt nor filed any request for judicial composition ( gerechtelijk akkoord / concordat judiciaire ) or judicial reorganisation ( réorganisation judiciaire / gerechtelijk reorganisatie ) until the date thereof; and

 

(xii) such other documents as we deemed necessary or useful for the delivery of this opinion letter.

The documents referred to under (ii) to (viii) are collectively referred to as the “ Issue Documents ”, which term also includes the Exchange Guarantees.

 

Page 2 of 6


Terms defined in the Issue Documents shall have the same meaning herein, unless the context requires otherwise and subject to any contrary indication.

 

4 Assumptions

For the purpose of this opinion, we have made the following assumptions:

 

4.1 We have examined (save for the Exchange Guarantees) certified, ordinary or facsimile copies of the documents mentioned in paragraph 3 above as executed by the parties, and we assume the conformity thereof to the originals and the genuineness of all signatures. We have assumed (save for the Exchange Guarantees) that the documents mentioned in paragraph 3 above have been executed by the persons, whose names are indicated thereon as being the names of the signatories, or if such names are not indicated, by the persons authorised to execute such documents.

 

4.2 We have also assumed, without any investigation, that all agreements and documents contemplated therein constitute legal, valid and binding obligations of all parties thereto, including the Company, fully enforceable against all such parties under all applicable laws other than the laws of the Kingdom of Belgium, and that:

 

  4.2.1 all parties thereto other than the Company have taken all corporate and other actions required to authorise the execution, delivery and performance of the Issue Documents and that the transactions contemplated in the Issue Documents may be effected by such parties;

 

  4.2.2 all such other parties have obtained all consents, approvals, licences or authorisations of, or complied with all notarisation, validation or stamping by, or filing, recording or registration with, any public authority, as may be required for the execution, delivery and performance by such parties of the Issue Documents or in order to ensure their admissibility in evidence in Court, or their enforceability vis-à-vis third parties;

 

  4.2.3 the Issue Documents have (save for the Exchange Guarantees) been executed by duly authorised representative(s) of each party other than the Company and the authorised signatories of each such other party have validly given their consent to the Issue Documents and had, at the time of executing the Issue Documents, full legal power and capacity to execute the Issue Documents in the name and on behalf of each such other party.

 

4.3 The Exchange Guarantees will be identical in all respects to the Guarantees, save for such changes as are not material to the matters on which we opine.

 

4.4 The statements of fact contained in the written resolution, letters, agreements, records and other documents mentioned in paragraph 3 are accurate and complete.

 

4.5 There are no agreements or understandings among the parties, written or oral, and no usage of trade or course of prior dealings among the parties that would in either case define, supplement, change or qualify the terms of the Issue Documents.

 

4.6 The Exchange will be conducted in compliance with the restrictions applicable to the exchange of securities as set forth in the Registration Statement.

 

4.7 The obligations undertaken by the Company under the Issue Documents meet its corporate interest.

 

Page 3 of 6


5 Opinion

Based upon the foregoing and subject to the qualifications made below, we are of the following opinion:

 

5.1 The Company has been duly incorporated and validly exists as a société anonyme / naamloze vennootschap under the laws of Belgium.

 

5.2 The Company has not been declared bankrupt nor filed any request for judicial composition until 3 December 2009.

 

5.3 The Company has the legal capacity and the corporate authority to enter into the Issue Documents and perform its obligations thereunder in accordance with their terms.

 

5.4 The Issue Documents (save for the Exchange Guarantees) have been validly executed by the Company; the persons who have signed the Issue Documents for the Company were validly representing and empowered to bind the Company.

 

5.5 The Issue Documents (and, when duly executed, the Exchange Guarantees will) constitute legal, valid and binding obligations of the Company, fully enforceable against the Company under Belgian law in accordance with their terms.

 

5.6 The execution by the Company of the Issue Documents and the performance by the Company of its obligations thereunder do not contravene any provision of Belgian law or the articles of association ( status / statuten ) of the Company.

 

5.7 The Issue Documents and the Registration Statement have been validly approved by the Company.

 

5.8 The submission of the Company under the Indenture to the non-exclusive jurisdiction of the courts of New York is valid. Any final and conclusive judgment obtained against the Company in the courts of New York will be recognised by the courts of Belgium in accordance with and subject to the rules of, Article 25 of the Belgian Private International Law Code (which requires, among others things, that the consequences of the recognition or enforcement of the judgment are not manifestly incompatible with Belgian public policy, that the rights of defence have been respected and that the judgment is final, i.e. not subject to any normal right of appeal).

 

5.9 The Company has no right of immunity from suit, execution, attachment or any other legal process in Belgium.

 

6 Qualifications

 

6.1 This opinion is subject to any limitations arising from bankruptcy, insolvency, liquidation, moratorium, reorganisation and other laws of general application relating to or affecting the rights of creditors.

 

6.2 The resolutions of the Board of Directors of the Company referred to in section 3 above may be revoked, supplemented or modified at any time.

 

6.3 The “Change of Control Clause”, as referred to in the section entitled “Description of the New Notes” in the Registration Statement will not be effective unless and until it is approved by a resolution of the general meeting of shareholders of the Company.

 

6.4 Claims may be or become subject to set-off or counterclaim.

 

Page 4 of 6


6.5 Claims may become barred under applicable Belgian statutes of limitation.

 

6.6 The enforcement in Belgium of the Issue Documents will be subject to the Belgian rules of civil procedure.

 

6.7 We express no opinion as to the validity or enforceability of contractual provisions requiring a party to an agreement to pay to another party to such agreement legal costs, attorney’s fees or other expenses relating to the costs of litigation between parties to such agreement brought before a court including, without limitation, enforcement procedures in Belgium of foreign judgments, incurred by another party in connection with the enforcement of its rights vis-à-vis the former party.

 

6.8 The granting of certain remedies, such as injunctions orders or specific performance for obligations other than to pay a sum of money, may be at the discretion of the Belgian courts, and such remedies are not necessarily granted.

 

6.9 Belgian courts may grant payment terms to debtors in exceptional circumstances.

 

6.10 Provisions of the Issue Documents, releasing, exculpating or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction to the extent that the action or inaction involves wilful negligence or misconduct, fraud or unlawful conduct, might not be enforceable in Belgium. The enforceability of such provisions may also be restricted in cases where they have the effect of discharging a party of its obligations or depriving the obligations assumed by such a party of any significance.

 

6.11 The enforceability of the Issue Documents is subject to and may be limited by the effect of general principles of equity, including, without limitations, concepts of materiality, reasonableness, good faith, abuse of right, fair dealings and public order.

 

6.12 A certificate, determination, notification, opinion or the like might be held by the Belgian courts not to be conclusive, final or binding if it could be shown to have an unreasonable or arbitrary basis or in the event of manifest error despite any provision in the Issue Documents to the contrary.

 

6.13 Under Belgian law, the unenforceability of a part of an agreement may result in the entire agreement being unenforceable if the unenforceable portion is deemed to be an essential part of that agreement, notwithstanding the inclusion of a severability clause in the agreement.

 

6.14 Under Belgian law:

 

  (a) late payment interest may not accrue on any overdue amount at a rate exceeding the aggregate of 0.5% per annum and the rate of interest accruing on the principal amount when not overdue (article 1907 of the Belgian Civil Code);

 

  (b) prepayment fees may not exceed six months of interest on the prepaid amount, calculated at the rate of interest accruing on the principal amount (article 1907 bis of the Belgian Civil Code);

 

  (c) a creditor may not claim interest on overdue interest unless the overdue interest has accrued over a period of more than one year and the interest has formally been claimed by the creditor, or the debtor has agreed to pay it, after such period has passed (article 1154 of the Belgian Civil Code).

It is uncertain whether any provisions of the Issue Documents which provide for the payment of (default) interest or prepayment fees which would contravene the statutory provisions referred to in this paragraph 6.14 (if any) would be considered as contrary to Belgian international public policy. If so, the enforceability of such provisions of the Issue Documents could be affected to that extent, without affecting the enforceability of the other provisions of the Issue Documents.

 

Page 5 of 6


6.15 Damages, liquidated damages and penalties may be varied by a Belgian court if they amount to a manifestly excessive or derisory penalty under Belgian law.

 

6.16 Remedies such as specific performance and issuance of injunctions or orders are at the discretion of the courts and such remedies are not necessarily granted.

 

6.17 Where any party is vested with a discretion or may determine a matter in its opinion, Belgian law may require such discretion to be exercised reasonably or such opinion to be based on reasonable grounds.

 

6.18 We do not express any opinion as to any taxation matters.

 

7 Reliance

This opinion is addressed to you solely for your benefit and solely for the purpose of the Exchange. It is not to be transmitted to anyone else nor is it to be relied upon by anyone else or for any other purpose or quoted or referred to in any public document or filed with anyone without our express consent. This opinion may, however, be disclosed by the addressees hereof to the extent required by law, regulation or any governmental or competent regulatory authority, or in connection with legal proceedings relating to the Exchange, provided that no such party to whom the opinion is disclosed may rely on the opinion without our express consent.

We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

This opinion shall be governed by and construed in accordance with Belgian law and all disputes arising out or in connection with this opinion shall be subject to the exclusive jurisdiction of the courts of Brussels (Belgium).

Nothing in this opinion should be construed as expressing an opinion in respect of any information, representation, statement, matter or other element contained in any document or agreement reviewed by us, except as expressly mentioned here above.

 

Yours sincerely
/s/ Gilles Nejman
/s/ François De Bauw
Gilles Nejman / François De Bauw

 

Page 6 of 6

EXHIBIT 5.5

 

Avocats/Advocaten   

Linklaters LLP

Rue Brederode 13

B - 1000 Brussels

Telephone (+32) 2 501 94 11

Facsimile (+32) 2 501 94 94

francois.debauw@linklaters.com

gilles.nejman@linklaters.com

To: Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street

Wilmington

Delaware 19801

USA

  
   3 December 2009

Dear Sirs

InBev Belgium SA/NV (“InBev Belgium”) and Cobrew NV/SA (“Cobrew”) (together the “Companies” and each a “Company”)

Offer to exchange all outstanding USD 1,500,000,000 3.000% Notes due 2012, all outstanding USD 1,250,000,000 4.125% Notes due 2015, all outstanding USD 2,250,000,000 5.375% Notes due 2020 and all outstanding USD 500,000,000 6.375% Notes due 2040 (together, the “Notes”) issued by Anheuser-Busch InBev Worldwide Inc., guaranteed by the Companies, for registered USD 1,500,000,000 3.000% Notes due 2012, registered USD 1,250,000,000 4.125% Notes due 2015, registered USD 2,250,000,000 5.375% Notes due 2020 and registered USD 500,000,000 6.375% Notes due 2040 (together, the “Exchange Notes”), guaranteed by the Companies (the “Exchange”)

 

1 Introduction

We have acted as your Belgian legal advisers in connection with the registration of the Exchange Notes and the guarantees to be endorsed thereon (the “ Exchange Guarantees ”) under the U.S. Securities Act of 1933 (the “ Securities Act ”).

 

2 Belgian Law

This opinion is limited to Belgian law as applied by the Belgian courts and published and in effect on the date of this opinion. It is given on the basis that all matters relating to it will be governed by, and that it (including all terms used in it) will be construed in accordance with, Belgian law. Nothing herein may be construed as an opinion on matters governed by the federated or state laws of the United States of America or the federated or state laws of any other jurisdiction.

This communication is confidential and may be privileged or otherwise protected by work product immunity.

Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. It is a law firm regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of the LLP or an independent consultant or, outside of Belgium, an employee of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP and of the non members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England, or on www.linklaters.com.

Please refer to www.linklaters.com/regulation for important information on Linklaters LLP’s regulatory position.


3 Scope of Inquiry

For the purpose of rendering this opinion, we have examined and relied upon the following documents:

 

(i) a copy of the Form F-4 Registration Statement dated 3 December 2009 as filed with the U.S. Securities and Exchange Commission (the “ Registration Statement ”);

 

(ii) an executed copy of the base indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV as parent guarantor, the Companies as subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Base Indenture ”);

 

(iii) an executed copy of the first supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc, Anheuser-Busch InBev SA/NV as parent guarantor, the Companies as subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ First Supplemental Indenture ”);

 

(iv) an executed copy of the second supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV as parent guarantor, the Companies as subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Second Supplemental Indenture ”);

 

(v) an executed copy of the third supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV as parent guarantor, the Companies as subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Third Supplemental Indenture ”);

 

(vi) an executed copy of the fourth supplemental indenture dated 16 October 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV as parent guarantor, the Companies as subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Fourth Supplemental Indenture ”);

 

(vii) an executed copy of the fifth supplemental indenture dated 27 November 2009 between, among others, Anheuser-Busch InBev Worldwide Inc., Anheuser-Busch InBev SA/NV as parent guarantor, the Companies as subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A. as trustee (the “ Fifth Supplemental Indenture ” and, together with the Base Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “ Indenture ”);

 

(viii) an executed copy of (a) the guarantees of InBev Belgium dated 16 October 2009 relating to the Notes and (b) the guarantees of Cobrew dated 16 October 2009 relating to the Notes (together, the “ Guarantees ”);

 

(ix) a copy of the minutes of the meeting of InBev Belgium’s board of directors dated 9 October 2009 and 14 October 2009 resolving to approve, among others, the Issue Documents (as defined below);

 

(x) a copy of the minutes of the meeting of Cobrew’s board of directors dated 9 October 2009 and 14 October 2009 resolving to approve, among others, the Issue Documents (as defined below);

 

(xi) the co-ordinated articles of association ( statuts / statuten ) of each of the Companies as most recently filed with the Clerk of the Commercial Court of Brussels ( i.e ., the coordination dated, in the case of InBev Belgium, 31 August 2005 and, in the case of Cobrew, 13 June 2006) and obtained from the Clerk of the Commercial Court of Brussels on 3 December 2009;

 

Page 2 of 7


(xii) a certificate dated 3 December 2009 issued by the Clerk of the Commercial Court of Brussels stating that InBev Belgium has not been declared bankrupt nor filed any request for judicial composition ( gerechtelijk akkoord / concordat judiciaire ) or judicial reorganisation ( réorganisation judiciaire / gerechtelijk reorganisatie ) until the date thereof;

 

(xiii) a certificate dated 3 December 2009 issued by the Clerk of the Commercial Court of Brussels stating that Cobrew has not been declared bankrupt nor filed any request for judicial composition ( gerechtelijk akkoord / concordat judiciaire ) or judicial reorganisation ( réorganisation judiciaire / gerechtelijk reorganisatie ) until the date thereof; and

 

(xiv) such other documents as we deemed necessary or useful for the delivery of this opinion letter.

The documents referred to under (ii) to (viii) are collectively referred to as the “ Issue Documents ”, which term also includes the Exchange Guarantees (the “ Exchange Guarantees ”).

Terms defined in the Issue Documents shall have the same meaning herein, unless the context requires otherwise and subject to any contrary indication.

 

4 Assumptions

For the purpose of this opinion, we have made the following assumptions:

 

4.1 We have examined (save for the Exchange Guarantees) certified, ordinary or facsimile copies of the documents mentioned in paragraph 3 above as executed by the parties, and we assume the conformity thereof to the originals and the genuineness of all signatures. We have (save for the Exchange Guarantees) assumed that the documents mentioned in paragraph 3 above have been executed by the persons, whose names are indicated thereon as being the names of the signatories, or if such names are not indicated, by the persons authorised to execute such documents.

 

4.2 We have also assumed, without any investigation, that all agreements and documents contemplated therein constitute legal, valid and binding obligations of all parties thereto, including the Companies, fully enforceable against all such parties under all applicable laws other than the laws of the Kingdom of Belgium, and that:

 

  4.2.1 all parties thereto other than the Companies have taken all corporate and other actions required to authorise the execution, delivery and performance of the Issue Documents and that the transactions contemplated in the Issue Documents may be effected by such parties;

 

  4.2.2 all such other parties have obtained all consents, approvals, licences or authorisations of, or complied with all notarisation, validation or stamping by, or filing, recording or registration with, any public authority, as may be required for the execution, delivery and performance by such parties of the Issue Documents or in order to ensure their admissibility in evidence in Court, or their enforceability vis-à-vis third parties;

 

  4.2.3 the Issue Documents have (save for the Exchange Guarantees) been executed by duly authorised representative(s) of each party other than the Companies and the authorised signatories of each such other party have validly given their consent to the Issue Documents and had, at the time of executing the Issue Documents, full legal power and capacity to execute the Issue Documents in the name and on behalf of each such other party.

 

Page 3 of 7


4.3 The Exchange Guarantees will be identical in all respects to the Guarantees, save for such changes as are not material to the matters on which we opine.

 

4.4 The statements of fact contained in the written resolution, minutes, letters, agreements, records and other documents mentioned in paragraph 3 are accurate and complete.

 

4.5 There are no agreements or understandings among the parties, written or oral, and no usage of trade or course of prior dealings among the parties that would in either case define, supplement, change or qualify the terms of the Issue Documents.

 

4.6 The Exchange will be conducted in compliance with the restrictions applicable to the exchange of securities as set forth in the Registration Statement.

 

4.7 The obligations undertaken by each Company under the Issue Documents meet their corporate interest.

 

5 Opinion

Based upon the foregoing and subject to the qualifications made below, we are of the following opinion:

 

5.1 Each Company has been duly incorporated and validly exists as a société anonyme / naamloze vennootschap under the laws of Belgium.

 

5.2 Neither Company has been declared bankrupt nor filed any request for judicial composition until 3 December 2009.

 

5.3 Each Company has the legal capacity and the corporate authority to enter into the Issue Documents and perform its obligations thereunder in accordance with their terms.

 

5.4 The Issue Documents to which each Company is a party (save for the Exchange Guarantees) have been validly executed by it; the persons who have signed the Issue Documents for such Company were validly representing and empowered to bind it.

 

5.5 The Issue Documents to which each Company is a party (and, when duly executed, the Exchange Guarantees will) constitute legal, valid and binding obligations of such Company, fully enforceable against such Company under Belgian law in accordance with their respective terms.

 

5.6 The execution by each Company of the Issue Documents to which it is a party and the performance by such Company of its obligations thereunder do not contravene any provision of Belgian law or the articles of association ( status / statuten ) of each Company.

 

5.7 The Issue Documents to which each Company is a party have been validly approved by it.

 

5.8 The submission of the Companies under the Indenture and the Purchase Agreement to the non-exclusive jurisdiction of the courts of New York is valid. Any final and conclusive judgment obtained against the Companies in the courts of New York will be recognised by the courts of Belgium in accordance with and subject to the rules of, Article 25 of the Belgian Private International Law Code (which requires, among others things, that the consequences of the recognition or enforcement of the judgment are not manifestly incompatible with Belgian public policy, that the rights of defence have been respected and that the judgment is final, i.e. not subject to any normal right of appeal).

 

Page 4 of 7


5.9 Neither Company has no right of immunity from suit, execution, attachment or any other legal process in Belgium.

 

6 Qualifications

 

6.1 This opinion is subject to any limitations arising from bankruptcy, insolvency, liquidation, moratorium, reorganisation and other laws of general application relating to or affecting the rights of creditors.

 

6.2 The board minutes of InBev Belgium and Cobrew dated 9 October 2009 and 14 October 2009 referred to in section 3 above may be revoked, supplemented or modified at any time.

 

6.3 The “Change of Control Clause”, as referred to in the section entitled “Description of the New Notes” in the Registration Statement will not be effective toward the Companies unless and until it is approved by a resolution of the general meeting of shareholders of Anheuser-Busch InBev SA/NV and of each of the Companies.

 

6.4 Claims may be or become subject to set-off or counterclaim.

 

6.5 Claims may become barred under applicable Belgian statutes of limitation.

 

6.6 The enforcement in Belgium of the Issue Documents will be subject to the Belgian rules of civil procedure.

 

6.7 We express no opinion as to the validity or enforceability of contractual provisions requiring a party to an agreement to pay to another party to such agreement legal costs, attorney’s fees or other expenses relating to the costs of litigation between parties to such agreement brought before a court including, without limitation, enforcement procedures in Belgium of foreign judgments, incurred by another party in connection with the enforcement of its rights vis-à-vis the former party.

 

6.8 The granting of certain remedies, such as injunctions orders or specific performance for obligations other than to pay a sum of money, may be at the discretion of the Belgian courts, and such remedies are not necessarily granted.

 

6.9 Belgian courts may grant payment terms to debtors in exceptional circumstances.

 

6.10 Provisions of the Issue Documents, releasing, exculpating or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction to the extent that the action or inaction involves wilful negligence or misconduct, fraud or unlawful conduct, might not be enforceable in Belgium. The enforceability of such provisions may also be restricted in cases where they have the effect of discharging a party of its obligations or depriving the obligations assumed by such a party of any significance.

 

6.11 The enforceability of the Issue Documents is subject to and may be limited by the effect of general principles of equity, including, without limitations, concepts of materiality, reasonableness, good faith, abuse of right, fair dealings and public order.

 

6.12 A certificate, determination, notification, opinion or the like might be held by the Belgian courts not to be conclusive, final or binding if it could be shown to have an unreasonable or arbitrary basis or in the event of manifest error despite any provision in the Issue Documents to the contrary.

 

Page 5 of 7


6.13 Under Belgian law, the unenforceability of a part of an agreement may result in the entire agreement being unenforceable if the unenforceable portion is deemed to be an essential part of that agreement, notwithstanding the inclusion of a severability clause in the agreement.

 

6.14 Under Belgian law:

 

  (a) late payment interest may not accrue on any overdue amount at a rate exceeding the aggregate of 0.5% per annum and the rate of interest accruing on the principal amount when not overdue (article 1907 of the Belgian Civil Code);

 

  (b) prepayment fees may not exceed six months of interest on the prepaid amount, calculated at the rate of interest accruing on the principal amount (article 1907 bis of the Belgian Civil Code);

 

  (c) a creditor may not claim interest on overdue interest unless the overdue interest has accrued over a period of more than one year and the interest has formally been claimed by the creditor, or the debtor has agreed to pay it, after such period has passed (article 1154 of the Belgian Civil Code).

It is uncertain whether any provisions of the Issue Documents which provide for the payment of (default) interest or prepayment fees which would contravene the statutory provisions referred to in this paragraph 6.14 (if any) would be considered as contrary to Belgian international public policy. If so, the enforceability of such provisions of the Issue Documents could be affected to that extent, without affecting the enforceability of the other provisions of the Issue Documents.

 

6.15 Damages, liquidated damages and penalties may be varied by a Belgian court if they amount to a manifestly excessive or derisory penalty under Belgian law.

 

6.16 Remedies such as specific performance and issuance of injunctions or orders are at the discretion of the courts and such remedies are not necessarily granted.

 

6.17 Where any party is vested with a discretion or may determine a matter in its opinion, Belgian law may require such discretion to be exercised reasonably or such opinion to be based on reasonable grounds.

 

6.18 We do not express any opinion as to any taxation matters.

 

7 Reliance

This opinion is addressed to you solely for your benefit and solely for the purpose of the Exchange. It is not to be transmitted to anyone else nor is it to be relied upon by anyone else or for any other purpose or quoted or referred to in any public document or filed with anyone without our express consent. This opinion may, however, be disclosed by the addressees hereof to the extent required by law, regulation or any governmental or competent regulatory authority, or in connection with legal proceedings relating to the Exchange, provided that no such party to whom the opinion is disclosed may rely on the opinion without our express consent.

We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

This opinion shall be governed by and construed in accordance with Belgian law and all disputes arising out or in connection with this opinion shall be subject to the exclusive jurisdiction of the courts of Brussels (Belgium).

 

Page 6 of 7


Nothing in this opinion should be construed as expressing an opinion in respect of any information, representation, statement, matter or other element contained in any document or agreement reviewed by us, except as expressly mentioned here above.

 

Yours sincerely
/s/ Gilles Nejman
/s/ François De Bauw
Gilles Nejman/François De Bauw

 

Page 7 of 7

EXHIBIT 5.6

 

  

Linklaters LLP

World Trade Centre Amsterdam

Zuidplein 180

1077 XV Amsterdam

Telephone (31 20) 799 6200

Facsimile (31 20) 799 6300

To:

Anheuser Busch InBev Worldwide Inc.

1209 Orange Street

Wilmington

Delaware 19801

United States of America

 

SUBJECT TO CHANGE   3 December 2009            

Dear Sirs

Interbrew International B.V. (“Interbrew International”), Interbrew Central European Holding B.V. (“Interbrew Central”) and InBev Nederland N.V. (“InBev Nederland” and together with Interbrew International and Interbrew Central, the “Companies”) – Offer (the “Offer”) to exchange all outstanding U.S.$1,500,000,000 3.000% Notes due 2012, all outstanding U.S.$1,250,000,000 4.125% Notes due 2015, all outstanding U.S.2,250,000,000 5.375% Notes due 2020 and all outstanding U.S.$500,000,000 6.375% Notes due 2040 (collectively, the “Original Notes”) issued on 16 October 2009 by Anheuser-Bush InBev Worldwide Inc. (the “Issuer”) for registered U.S.$1,500,000,000 3.000% Notes due 2012, registered U.S.$1,250,000,000 4.125% Notes due 2015, registered U.S.2,250,000,000 5.375% Notes due 2020 and registered U.S.$500,000,000 6.375% Notes due 2040 (collectively, the “Exchange Notes” and together with the Original Notes, the “Notes”) issued by the Issuer

 

1 We have acted as Dutch legal advisers to the Companies in connection with the registration of the Exchange Notes and the guarantees to be endorsed thereon (the “ Exchange Guarantees ”) under the U.S. Securities Act of 1933 (the “ Securities Act ”). The Original Notes are, and the Exchange Notes will be, issued pursuant to the Indentures (as defined below). The Notes are stated to be unconditionally and irrevocably guaranteed by, among others, Anheuser-Bush InBev SA/NV and the Companies (all such guarantors collectively, the “ Guarantors ”).

 

2 This opinion is limited to Dutch law as applied by the Dutch courts and published in print and in effect on the date of this opinion, excluding tax law, the laws of the European Union (insofar as not implemented or incorporated in Dutch law) and competition, market abuse and procurement laws. This opinion is given on the basis that we undertake no responsibility to notify any addressee of this opinion of any change in Dutch law after the date of this opinion. It is given on the basis that it and all matters relating to it will be governed by and construed in accordance with Dutch law and that any action relating to it can only be brought before a Dutch court. In this opinion, Dutch legal concepts are expressed in English terms and not in their original Dutch terms. The Dutch concepts concerned may not be identical to the concepts described by the English terms as they may exist or be interpreted under the laws of jurisdictions other than the Netherlands.

This communication is confidential and may be privileged or otherwise protected by work product immunity.

Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. It is regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of Linklaters LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP together with a list of those non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England or on www.linklaters.com and such persons are either solicitors, registered foreign lawyers or European lawyers.

Please refer to www.linklaters.com/regulation for important information on our regulatory position.


3 For the purpose of this opinion we have examined the documents listed and, where appropriate, defined in the Schedule to this letter. Our examination has been limited to the text of the documents. In addition we have obtained the following confirmations given by telephone or otherwise on the date of this opinion:

 

  3.1 Confirmation from the Chamber of Commerce that the Trade Register Extracts are up to date in all respects material for this opinion.

 

  3.2 Confirmation from the insolvency office ( afdeling insolventie ) of the competent court in Breda and the central insolvency register ( centraal insolventieregister ) in The Hague that none of the Companies is registered as having been declared bankrupt ( failliet verklaard ) or granted suspension of payments ( surseance verleend ).

 

4 We have assumed the following:

 

  4.1 All copy documents conform to the originals and all originals are genuine and complete.

 

  4.2 Each signature is the genuine signature of the individual concerned.

 

  4.3 All documents were at their date, and have through the date hereof remained, accurate, complete and in full force and effect without modification, and have been or will have been executed in the same form as examined by us for the purposes of this opinion, the Original Notes have been validly issued, offered, authenticated and fully paid up and the Exchange Notes will have been authenticated, issued, offered and exchanged for the Original Notes as contemplated by, and in accordance with, the Indentures and the Registration Statement. All confirmations referred to in paragraph 3 are true. The Exchange Guarantees will be identical in all material respects to the guarantees dated 16 October 2009 provided by the Companies relating to the Original Notes.

 

  4.4 None of the Companies has (i) had its assets placed under administration ( onder bewind gesteld ), (ii) been dissolved ( ontbonden ), merged ( gefuseerd ) or split up ( gesplitst ), or (iii) been subjected to emergency measures ( noodregeling ) under the Financial Supervision Act ( Wet op het financieel toezicht ) or any one of the insolvency and winding-up proceedings listed in Annex A or Annex B to the Council Regulation EC No. 1346/2000 of 29 May 2000 on Insolvency Proceedings (“ Insolvency Proceedings ”, including bankruptcy ( faillissement )).

 

  4.5 The entry into and performance of the Agreements and the transactions contemplated thereby are conducive to the corporate objects and in the interest of each of the Companies.

 

  4.6 The written resolutions referred to in the Schedule have been validly passed.

 

  4.7 No advice is required from any works council under the Works Councils Act ( Wet op de ondernemingsraden ) in connection with each Company’s entry into and performance of the Agreements.

 

  4.8 The Exchange Guarantees will have been signed on behalf of each of the Companies by two members of its management board in office at the time of signing or by two persons or persons duly authorised to do so under a valid power of attorney (including the Power of Attorney).

 

Page 2 of 6


  4.9 All documents and their entry into and performance are within the capacity and powers (corporate and otherwise) of, and have been or will have been validly authorised, entered into and duly performed by, each party other than the Companies.

 

  4.10 All documents, including any governing law provisions contained therein, are valid, binding and enforceable on each party (including the Companies) under the law to which they are expressed to be subject where that is not Dutch law, and under any other applicable law than Dutch law. Words and phrases used in those documents have the same meaning and effect as they would if those documents were governed by Dutch law.

 

  4.11 Insofar as any obligation of the Companies under the Agreements falls to be performed in, or is otherwise affected by the laws of, any jurisdiction other than the Netherlands, its performance would not be illegal or ineffective under the laws of that jurisdiction.

 

  4.12 There are no provisions of any law, other than Dutch law, which may apply to the Notes or the Agreements (or the transactions contemplated thereby) or to any power of attorney issued by the Companies (including the Powers of Attorney), which would affect this opinion.

 

5 In our opinion:

 

  5.1 Interbrew International and Interbrew Central have been incorporated and are existing as a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) under Dutch law. InBev Nederland has been incorporated and is existing as a limited liability company ( naamloze vennootschap ) under Dutch law.

 

  5.2 Each of the Companies has the corporate power to enter into and perform the Agreements.

 

  5.3 Each of the Companies has taken all necessary corporate action to authorise its entry into and performance of the Agreements.

 

  5.4 Each of the Companies has validly signed the Intendures. When signed on behalf of each of the Companies as set out in paragraph 4.8, the Exchange Guarantees will have been validly signed by each of the Companies.

 

6 This opinion is subject to any matters not disclosed to us and to the following qualifications:

 

  6.1 This opinion is limited by, and therefore we do not express any opinion or statement as to the consequences of, any Insolvency Proceeding, insolvency, liquidation ( ontbinding en vereffening ), reorganisation, fraudulent conveyance ( Actio Pauliana ) and other laws relating to or affecting the rights of creditors.

 

  6.2

Under Dutch law, a power of attorney does not preclude the principal from performing the legal acts covered by the power of attorney and can be made irrevocable only insofar as it is granted for the purpose of performing a legal act in the interest of the attorney or a third party and subject to any amendments made or limitations imposed by the court on serious grounds ( gewichtige redenen ). Each power of attorney ( volmacht ) or mandate ( lastgeving ), whether or not irrevocable, granted by a company, will terminate by force of law and without

 

Page 3 of 6


 

notice, upon bankruptcy of the company or the death of or termination by the attorney or the attorney being placed under guardianship, and will cease to have effect upon the company having been granted a suspension of payments. This qualification would also apply to the extent that the appointment of a process agent or other agent were to be deemed to constitute a power of attorney or a mandate.

 

  6.3 Under Dutch law, a legal act ( rechtshandeling ) performed by a legal entity (including (without limitation) a guarantee pursuant to which it guarantees the performance of obligations of a third party, whether or not affiliated with such third party, and any other legal act having similar effect and including (without limitation) an agreement pursuant to which it agrees to provide or provides security for its obligations under such agreement or guarantee or other act), may be nullified by any of its creditors if (a) such transactions are entered into by such debtor without a legal obligation to do so, (b) the rights of such creditors are thereby prejudiced, and (c) there is knowledge on the part of the relevant legal entity and the party with whom the transaction is made that the rights of the other creditors would be prejudiced.

 

  6.4 If a legal act ( rechtshandeling ) performed by a legal entity (including (without limitation) a guarantee pursuant to which it guarantees the performance of obligations of a third party, whether or not affiliated with such third party, and any other legal act having similar effect and including (without limitation) an agreement pursuant to which it agrees to provide or provides security for its obligations under such agreement or guarantee or other act) which exceeds the entity’s objects or is not in the entity’s corporate interest (i.e. is not in furtherance of the entity’s objects), the act may (i) exceed the entity’s corporate power, (ii) violate its articles of association and (iii) be nullified by it on the basis of section 2:7 of the Dutch Civil Code if the other party or parties to the act knew or should have known that the entity’s objects were exceeded or that the act was not in the entity’s corporate interest.

 

  6.5 The Trade Register Extracts and the confirmations referred to in paragraph 3 do not provide conclusive evidence that the information set out in the Trade Register Extracts is correct or that each of the Companies has not become the subject of an Insolvency Proceeding.

 

  6.6 We do not express any opinion as to facts.

 

  6.7 It should be understood that we have not been responsible for investigating or verifying the accuracy of the facts or the reasonableness of any statements of belief or opinion contained in the Registration Statement, or that no material facts have been omitted from it.

 

7 This opinion is addressed to you solely for your benefit in connection with the Offer. It is not to be transmitted to anyone else nor is it to be relied upon by anyone else or for any other purpose or quoted or referred to in any public document or filed with anyone without our prior written consent. We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

Yours faithfully

/s/ Linklaters LLP

Linklaters LLP

 

Page 4 of 6


Schedule

 

1 An extract from the trade register obtained from the chamber of commerce for Zuidwest-Nederland (the “ Chamber of Commerce ”) regarding Interbrew International dated 1 December 2009 (the “ Interbrew International Extract ”).

 

2 A faxed copy of a notarial copy of Interbrew International’s deed of incorporation dated 25 April 1978 and of its articles of association as most recently amended on 28 December 2000, all as obtained from and according to the Chamber of Commerce.

 

3 A print-out of an electronic copy of a written resolution of the management board of Interbrew International dated 12 October 2009, including a power of attorney granted by Interbrew International to each of J.L.J. van de Perre, B.A.V. Loore, G. Boulangé, J.H.M. van Erve, J. Heerkens, Mrs. L. Hellemans and J.I.C. Wiersema acting jointly with another attorney (the “ Interbrew International Power of Attorney ”), of a written resolution of the management board of Interbrew International dated 14 October 2009, of a written resolution of Anheuser-Busch InBev SA/NV and InBev Belgium SA/NV in their stated capacity as Interbrew International’s only shareholders dated 12 October 2009 and of a written resolution of Anheuser-Busch InBev SA/NV and InBev Belgium SA/NV in their stated capacity as Interbrew International’s only shareholders dated 14 October 2009.

 

4 An extract from the trade register obtained from the Chamber of Commerce regarding Interbrew Central dated 1 December 2009 (the “ Interbrew Central Extract ”).

 

5 A faxed copy of a notarial copy of Interbrew Central’s deed of incorporation dated 13 March 1985 and of its articles of association as most recently amended on 29 May 1997, all as obtained from and according to the Chamber of Commerce.

 

6 A print-out of an electronic copy of a written resolution of the management board of Interbrew Central dated 12 October 2009, including a power of attorney granted by Interbrew Central to each of J.L.J. van de Perre, B.A.V. Loore, G. Boulangé, J.H.M. van Erve, J. Heerkens, Mrs. L. Hellemans and J.I.C. Wiersema acting jointly with another attorney (the “ Interbrew Central Power of Attorney ”), of a written resolution of the management board of Interbrew Central dated 14 October 2009, of a written resolution of Interbrew International in its stated capacity as Interbrew Central’s sole shareholder dated 12 October 2009 and of a written resolution of Interbrew International in its stated capacity as Interbrew Central’s sole shareholder dated 14 October 2009.

 

7 An extract from the trade register obtained from the Chamber of Commerce regarding InBev Nederland dated 1 December 2009 (the “ InBev Nederland Extract ”).

 

8 A faxed copy of an addendum to the Dutch Governmental Gazette ( Bijvoegsel tot de Nederlandsche Staatscourant ) of 24 June 1930 containing the text of the Company’s deed of incorporation dated 29 April 1930 and of its articles of association as most recently amended on 2 January 2006, both as obtained from and according to the Chamber of Commerce.

 

9

A print-out of an electronic copy of a written resolution of the management board of InBev Nederland dated 12 October 2009, including a power of attorney granted by InBev Nederland to

 

Page 5 of 6


 

each managing director of InBev Nederland and each of J.L.J. van de Perre, B.A.V. Loore, G. Boulangé, J.H.M. van Erve, J. Heerkens, Mrs. L. Hellemans and J.I.C. Wiersema acting jointly with another attorney (the “ InBev Nederland Power of Attorney ”), of a written resolution of the management board of InBev Nederland dated 14 October 2009, of a written resolution of the supervisory board of InBev Nederland dated 12 October 2009, of a written resolution of the supervisory board of InBev Nederland dated 14 October 2009, of a written resolution of Interbrew International B.V. in its stated capacity as the sole shareholder of InBev Nederland dated 12 October 2009 and of a written resolution of Interbrew International B.V. in its stated capacity as the sole shareholder of InBev Nederland dated 14 October 2009.

 

10 A print-out of an electronic copy of a registration statement on Form F-4 as filed with the Securities and Exchange Commission on 3 December 2009 (such registration statement including the prospectus relating to the Exchange Notes contained therein, the “ Registration Statement ”).

 

11 A print-out of an electronic copy of an executed indenture dated as of 16 October 2009 (the “ Indenture ”) between the Issuer, the Guarantors and the Trustee.

 

12 A print-out of an electronic copy of an executed first supplemental indenture dated as of 16 October 2009 to the Indenture (the “ First Supplemental Indenture ”) between the Issuer, the Guarantors and the Trustee, relating to the U.S.$1,500,000,000 3.000% Notes due 2012.

 

13 A print-out of an electronic copy of an executed second supplemental indenture dated as of 16 October 2009 to the Indenture (the “ Second Supplemental Indenture ”) between the Issuer, the Guarantors and the Trustee, relating to the U.S.$1,250,000,000 4.125% Notes due 2015.

 

14 A print-out of an electronic copy of an executed third supplemental indenture dated as of 16 October 2009 to the Indenture (the “ Third Supplemental Indenture ”) between the Issuer, the Guarantors and the Trustee, relating to the U.S.2,250,000,000 5.375% Notes due 2020.

 

15 A print-out of an electronic copy of an executed fourth supplemental indenture dated as of 16 October 2009 to the Indenture (the “ Fourth Supplemental Indenture ”) between the Issuer, the Guarantors and the Trustee, relating to the U.S.$500,000,000 6.375% Notes due 2040.

 

16 A print-out of an electronic copy of an executed fifth supplemental indenture dated as of 27 November 2009 to the Indenture (the “ Fifth Supplemental Indenture ”) between the Issuer, the Guarantors and the Trustee, relating to the amendment of Section 209 of the Indenture.

The Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture and the Fifth Supplemental Indenture are collectively referred to as the “ Indentures ”; the Indentures and the Exchange Guarantees are collectively referred to as the “ Agreements ”; the Interbrew International Extract, the Interbrew Central Extract and the InBev Nederland Extract are collectively referred to as the “ Trade Register Extracts ”; the Interbrew International Power of Attorney, the Interbrew Central Power of Attorney and the InBev Nederland Power of Attorney are collectively referred to as the “ Powers of Attorney ”; references to the “ Notes ” include the Notes in global form, unless the context requires otherwise; references to “ documents ” are to any and all documents mentioned in this Schedule including the Notes, unless the context requires otherwise.

 

Page 6 of 6

EXHIBIT 5.7

 

      Linklaters LLP
      One Silk Street
      London EC2Y 8HQ
      Telephone (+44) 20 7456 2000
      Facsimile (+44) 20 7456 2222
      DX Box Number 10 CDE

 

To:

  

Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street

Wilmington

Delaware 19801

  
      3 December 2009

Dear Sirs

Anheuser-Busch InBev Worldwide Inc. (the “Offeror”): Offer to exchange all outstanding U.S.$1,500,000,000 3.000 per cent. Notes due 2012, all outstanding U.S.$1,250,000,000 4.125 per cent. Notes due 2015, all outstanding U.S.$2,250,000,000 5.375 per cent. Notes due 2020 and all outstanding U.S.$500,000,000 6.375 per cent. Notes due 2040 (together, the “Notes”) guaranteed by Anheuser-Busch InBev NV/SA (“Anheuser-Busch InBev”), Brandbrew S.A., Cobrew NV/SA, InBev Belgium SA/NV, AB InBev France S.A.S., InBev Nederland N.V., Interbrew Central European Holding B.V., Interbrew International B.V., Nimbuspath Limited (“Nimbuspath”), Ambrew S.A. and Anheuser-Busch Companies, Inc. (together, the “Guarantors”) for registered U.S.$1,500,000,000 3.000 per cent. Notes due 2012, registered U.S.$1,250,000,000 4.125 per cent. Notes due 2015, registered U.S.$2,250,000,000 5.375 per cent. Notes due 2020 and registered U.S.$500,000,000 6.375 per cent. Notes due 2040 (together, the “Exchange Notes”)

 

1 We have acted as your English legal advisers in connection with the registration of the Exchange Notes and the guarantees to be endorsed thereon (the “ Exchange Guarantees ”) under the U.S. Securities Act of 1933 (the “ Securities Act ”). Unless, the context otherwise requires, capitalised terms used in the opinion shall have the meanings given to them in the Schedule hereto.

 

2 This opinion is limited to English law as applied by the English courts and is given on the basis that it will be governed by and construed in accordance with English law. In particular, we express no opinion on matters of United States federal or state law or the laws of any other jurisdiction.

 

3 For the purpose of this opinion we have examined the documents listed and, where appropriate, defined in the Schedule to this letter.

 

4 We have assumed that:

 

4.1 each of the documents which are the subject of this opinion is valid and binding on each party under the law to which it is expressed to be subject where that is not English law and that words and phrases used in those documents have the same meaning and effect as they would if those documents were governed by English law;

This communication is confidential and may be privileged or otherwise protected by work product immunity.

Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. It is a law firm regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of Linklaters LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP together with a list of those non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ or on www.linklaters.com and such persons are either solicitors, registered foreign lawyers or European lawyers.

Please refer to www.linklaters.com/regulation for important information on our regulatory position.


4.2 the meetings of (i) the Board of Directors of Nimbuspath (held on 7 October 2009 and 15 October 2009) and (ii) the Board of Directors of InBev Belgium SA/NV (held on 9 October 2009 and 14 October 2009), extracts of which have been supplied to us, were duly convened and constituted, a quorum was present and acting throughout and the resolutions referred to in such minutes were duly and validly adopted and have not been amended, modified or rescinded;

 

4.3 the written resolutions of the sole shareholder of Nimbuspath (circulated on 6 October 2009 and 15 October 2009), copies of which have been supplied to us, were duly and validly passed and adopted in accordance with the constitution of Nimbuspath, were duly executed and have not been amended, modified or rescinded; and

 

4.4 the Exchange Guarantees will be identical in all respects to the Guarantees dated 16 October 2009 provided by Nimbuspath relating to the Notes, save for such changes as are not material to the matters on which we opine.

 

5 In our opinion:

 

5.1 Nimbuspath is a company incorporated in England under the Companies Act 1985.

 

5.2 Nimbuspath has corporate power to enter into and to perform its obligations under the Indentures and the Exchange Guarantees to be endorsed on the Exchange Notes and has taken all necessary corporate action to authorise its execution, delivery and performance of the Indentures and the Exchange Guarantees to be endorsed on the Exchange Notes.

 

5.3 When the Registration Statement has become effective under the Securities Act and the Exchange Notes (including the endorsement of the Exchange Guarantees on the Exchange Notes) have been duly executed and authenticated in accordance with the terms of the Indentures and duly issued and delivered in exchange for the Notes, there is no reason insofar as English law is concerned why the obligations of Nimbuspath under the Exchange Guarantees are not valid and binding upon Nimbuspath.

 

6 This opinion is subject to the following:

 

6.1 It should be understood that we have not been responsible for investigating or verifying the accuracy of the facts, including statements of foreign law, or the reasonableness of any statements of opinion, contained in the Registration Statement, or that no material facts have been omitted from it.

 

6.2 Insofar as this opinion relates to the obligations of Nimbuspath, it is given on the assumption that they have been entered into in good faith and for the purpose of carrying out Nimbuspath’s business and that, at the time they were entered into, there were reasonable grounds for believing that to do so would benefit Nimbuspath.

 

7 We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

 

Yours faithfully
/s/ Linklaters LLP
Linklaters LLP

 

Page 2 of 3


Schedule

 

1 A certified copy of the Memorandum and Articles of Association of Nimbuspath.

 

2 A copy of the Minutes of a Meeting of (i) the Board of Directors of Nimbuspath held on 7 October 2009 and 15 October 2009 and (ii) the Board of Directors of InBev Belgium SA/NV held on 9 October 2009 and 14 October 2009.

 

3 Copies of the written resolutions of the sole shareholder of Nimbuspath circulated on 6 October 2009 and 15 October 2009.

 

4 The Form F-4 Registration Statement (the “ Registration Statement ”) as filed with the Securities and Exchange Commission on 3 December 2009.

 

5 The Indenture dated 16 October 2009 (the “ Indenture ”) between the Issuer, the Guarantors party thereto from time to time and the Trustee, the First Supplemental Indenture dated 16 October 2009 relating to the U.S.$1,500,000,000 3.000 per cent. Notes due 2012 (the “ First Supplemental Indenture ”), the Second Supplemental Indenture dated 16 October 2009 relating to the U.S.$1,250,000,000 4.125 per cent. Notes due 2015 (the “ Second Supplemental Indenture ”), the Third Supplemental Indenture dated 16 October 2009 relating to the U.S.$2,250,000,000 5.375 per cent. Notes due 2020 (the “ Third Supplemental Indenture ”), the Fourth Supplemental Indenture dated 16 October 2009 relating to the U.S.$500,000,000 6.375 per cent. Notes due 2040 (the “ Fourth Supplemental Indenture ”) and the Fifth Supplemental Indenture dated 27 November 2009 relating to the amendment of Section 209 of the Indenture (the “ Fifth Supplemental Indenture ”, and, together with the Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “ Indentures ”).

 

Page 3 of 3

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors of Anheuser-Busch InBev SA/NV:

We consent to the use of our report dated June 26, 2009, except as to Note 36, which is as of November 30, 2009, with respect to the consolidated balance sheets of Anheuser-Busch InBev SA/NV and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, recognized income and expenses and cash flows for each of the years in the three-year period ended December 31, 2008, which report appears in the Registration Statement on Form F-4 of Anheuser-Busch InBev SA/NV. We also consent to the reference to our firm under the heading “Experts” in such Registration Statement.

KPMG Bedrijfsrevisoren – Réviseurs d’Entreprises

Statutory auditor

represented by

/s/ Jos Briers

Réviseur d’Entreprises/Bedrijfsrevisor

Brussels, BELGIUM

November 30, 2009

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to use in this Registration Statement on Form F-4 of Anheuser-Busch InBev SA/NV of our report dated February 27, 2008, relating to the financial statements of Anheuser-Busch Inc. as of December 31, 2007 and 2006 and for the three years ended December 31, 2007. We also consent to the use in this Registration Statement of our report dated June 26, 2009, relating to the financial statement of Anheuser-Busch Inc. as of December 31, 2008, which is not separately presented in this Registration Statement. We also consent to the references to us under the heading “Experts” in such Registration Statement.

 

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
St. Louis, MO
December 3, 2009

EXHIBIT 24.1

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ Anheuser-Busch InBev Worldwide Inc. — Power of Attorney ]


Date: November 25, 2009     By:  

/s/ David A. Peacock

    David A. Peacock
   

President, Chief Executive Officer

and Director (Chairman of the Board of Directors)

    Anheuser-Busch InBev Worldwide Inc.
Date: November 25, 2009     By:  

/s/ David Ameida

    David Almeida
    Vice President, Finance
    Anheuser-Busch InBev Worldwide Inc.
Date: November 25, 2009     By:  

/s/ Larry D. Baumann

    Larry D. Baumann
    Vice President, Controller
    Anheuser-Busch InBev Worldwide Inc.
Date: November 25, 2009     By:  

/s/ Luiz F. Edmond

    Luiz F. Edmond
    Director
    Anheuser-Busch InBev Worldwide Inc.
Date: November 25, 2009     By:  

/s/ Gary L. Rutledge

    Gary L. Rutledge
    Director
    Anheuser-Busch InBev Worldwide Inc.

[ Anheuser-Busch InBev Worldwide Inc. — Power of Attorney ]

EXHIBIT 24.2

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”) under the US Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]


Date: November 24, 2009     By:  

/s/ Carlos Brito

    Carlos Brito
    Chief Executive Officer
    Anheuser-Busch InBev SA/NV
Date: November 24, 2009     By:  

/s/ Felipe Dutra

    Felipe Dutra
    Chief Financial Officer
    Anheuser-Busch InBev SA/NV
Date: November 23, 2009     By:  

/s/ Jean-Luc Dehaene

    Jean-Luc Dehaene
    Director
    Anheuser-Busch InBev SA/NV
Date: November 23, 2009     By:  

/s/ Stéfan Descheemaeker

    Stéfan Descheemaeker
    Director
    Anheuser-Busch InBev SA/NV
Date: November 24, 2009     By:  

/s/ Peter Harf

    Peter Harf
   

Director

(Chairman of the Board)

    Anheuser-Busch InBev SA/NV

[ Signature page of Power of Attorney ]


Date: November 24, 2009     By:  

/s/ Marcel Hermann Telles

    Marcel Hermann Telles
    Director
    Anheuser-Busch InBev SA/NV
Date: November 23, 2009     By:  

/s/ Jorge Paul Lemann

    Jorge Paulo Lemann
    Director
    Anheuser-Busch InBev SA/NV
Date: November 23, 2009     By:  

/s/ Grégoire de Spoelberch

    Grégoire de Spoelberch
    Director
    Anheuser-Busch InBev SA/NV
Date: November 24, 2009     By:  

/s/ Kees J. Storm

    Kees J. Storm
    Director
    Anheuser-Busch InBev SA/NV
Date: November 24, 2009     By:  

/s/ Roberto Moses Thompson Motta

    Roberto Moses Thompson Motta
    Director
    Anheuser-Busch InBev SA/NV
Date: November 24, 2009     By:  

/s/ Alexandre Van Damme

    Alexandre Van Damme
    Director
    Anheuser-Busch InBev SA/NV

[ Signature page of Power of Attorney ]


Date: November 24, 2009     By:  

/s/ Carlos Alberto da Veiga Sicupira

    Carlos Alberto da Veiga Sicupira
    Director
    Anheuser-Busch InBev SA/NV
Date: November 23, 2009     By:  

/s/ Mark Winkelman

    Mark Winkelman
    Director
    Anheuser-Busch InBev SA/NV

[ Signature page of Power of Attorney ]

EXHIBIT 24.3

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ InBev Belgium SA/NV — Power of Attorney ]


Date: November 27, 2009     By:  

/s/ Eric Lauwers

    Eric Lauwers
    Chairman of the Board of Directors
    InBev Belgium SA/NV
Date: November 27, 2009     By:  

/s/ Jan Craps

    Jan Craps
    Member of the Board of Directors
    InBev Belgium SA/NV
Date: November 27, 2009     By:  

/s/ Manisha Thakker

    Manisha Thakker
    Member of the Board of Directors
    InBev Belgium SA/NV
Date: November 27, 2009     By:  

/s/ Erlend Van Vreckem

    Erlend Van Vreckem
    Member of the Board of Directors
    InBev Belgium SA/NV

[ InBev Belgium SA/NV — Power of Attorney ]

EXHIBIT 24.4

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ BrandBrew S.A. — Power of Attorney ]


Date: November 26, 2009     By:  

/s/ Gert Magis

    Gert Magis,
    Member of the Board of Directors
    BrandBrew S.A.
Date: November 27, 2009     By:  

/s/ Jean-Louis Van de Perre

    Jean-Louis Van de Perre
    Member of the Board of Directors
    BrandBrew S.A.

[ BrandBrew S.A. — Power of Attorney ]

EXHIBIT 24.5

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ Cobrew NV/SA — Power of Attorney ]


Date: November 27, 2009     By:  

/s/ Gert Boulangé

    Gert Boulangé
    Member of the Board of Directors
    Cobrew NV/SA
Date: November 27, 2009     By:  

/s/ Peter Suy

    Peter Suy
    Member of the Board of Directors
    Cobrew NV/SA
Date: November 27, 2009     By:  

/s/ Jo Van Biesbroeck

    Jo Van Biesbroeck
    Member of the Board of Directors
    Cobrew NV/SA
Date: November 30, 2009     By:  

/s/ Jean-Louis Van de Perre

    Jean-Louis Van de Perre
    Member of the Board of Directors
    Cobrew NV/SA

[ Cobrew NV/SA — Power of Attorney ]

EXHIBIT 24.6

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ InBev Nederland N.V. — Power of Attorney ]


Date: November 27, 2009     By:  

/s/ Eric Lauwers

    Eric Lauwers
    General Manager and Chairman of the Board of Directors
    InBev Nederland N.V.
Date: November 27, 2009     By:  

/s/ Koen Van Loock

    Koen Van Loock
    Finance Director and Member of the Board of Directors
    InBev Nederland N.V.
Date: November 27, 2009     By:  

/s/ Remco Boerefijn

    Remco Boerefijn
    Member of the Board of Directors
    InBev Nederland N.V.

[ InBev Nederland N.V. — Power of Attorney ]

EXHIBIT 24.7

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ AB InBev France S.A.S. — Power of Attorney ]


Date: December 1, 2009     By:  

/s/ Christian Cools

    Christian Cools
    President and Member of the Board of Directors
    AB InBev France S.A.S.
Date: December 1, 2009     By:  

/s/ Nicolas Bonnel

    Nicolas Bonnel
    Member of the Board of Directors
    AB InBev France S.A.S.
Date: December 1, 2009     By:  

/s/ Emilie Ruyant

    Emilie Ruyant
    Member of the Board of Directors
    AB InBev France S.A.S.

[ AB InBev France S.A.S. — Power of Attorney ]

EXHIBIT 24.8

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument. This Power of Attorney is governed by Dutch law.

[ Remainder of this page left intentionally blank .]

[ Interbrew International B.V. — Power of Attorney ]


Date: November 26, 2009     By:  

/s/ Gert Boulangé

    Gert Boulangé
    Member of the Board of Directors
    Interbrew International B.V., also being the sole managing director of Interbrew Central European Holding B.V.
Date: November 26, 2009     By:  

/s/ Johannes Henricus Maria van Erve

    Johannes Henricus Maria van Erve
    Member of the Board of Directors
    Interbrew International B.V., also being the sole managing director of Interbrew Central European Holding B.V.
Date: November 30, 2009     By:  

/s/ Jeroen Heerkens

    Jeroen Heerkens
    Member of the Board of Directors
    Interbrew International B.V., also being the sole managing director of Interbrew Central European Holding B.V.
Date: November 26, 2009     By:  

/s/ Jolette Ida Claire Wiersema

    Jolette Ida Claire Wiersema
    Member of the Board of Directors
    Interbrew International B.V., also being the sole managing director of Interbrew Central European Holding B.V.

[ Interbrew International B.V. — Power of Attorney ]

EXHIBIT 24.9

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ Nimbuspath Limited — Power of Attorney ]


Date: November 30, 2009     By:  

/s/ Claude Bahoshy

    Claude Bahoshy
    Member of the Board of Directors
    Nimbuspath Limited
Date: November 30, 2009     By:  

/s/ Rosanna Longobardi

    Rosanna Longobardi
    Member of the Board of Directors
    Nimbuspath Limited
Date: November 30, 2009     By:  

/s/ Stuart MacFarlane

    Stuart MacFarlane
    Member of the Board of Directors
    Nimbuspath Limited
Date: November 30, 2009     By:  

/s/ Bhavesh Mistry

    Bhavesh Mistry
    Member of the Board of Directors
    Nimbuspath Limited

[ Nimbuspath Limited — Power of Attorney ]

EXHIBIT 24.10

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ AmBrew S.A. — Power of Attorney ]


Date: November 27, 2009     By:  

/s/ Gert Bert Maria Magis

    Gert Bert Maria Magis
    Member of the Board of Directors
    AmBrew S.A.
Date: November 27, 2009     By:  

/s/ Jan Craps

    Jan Craps
    Member of the Board of Directors
    AmBrew S.A.

[ AmBrew S.A. — Power of Attorney ]

EXHIBIT 24.11

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints any Vice President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together, shall constitute one instrument.

[ Remainder of this page left intentionally blank .]

[ Anheuser-Busch Companies, Inc. — Power of Attorney ]


Date: November 25, 2009     By:  

/s/ David A. Peacock

    David A. Peacock
   

President, Chief Executive Officer

and Director (Chairman of the Board of Directors)

Anheuser-Busch Companies, Inc.

Date: November 25, 2009     By:  

/s/ David Almeida

    David Almeida
   

Vice President, Finance

Anheuser-Busch Companies, Inc.

Date: November 25, 2009     By:  

/s/ Larry D. Baumann

    Larry D. Baumann
   

Vice President, Controller

Anheuser-Busch Companies, Inc.

Date: November 25, 2009     By:  

/s/ Luiz F. Edmond

    Luiz F. Edmond
   

Director

Anheuser-Busch Companies, Inc.

Date: November 25, 2009     By:  

/s/ Gary L. Rutledge

    Gary L. Rutledge
    Director
    Anheuser-Busch Companies, Inc.

[ Anheuser-Busch Companies, Inc. — Power of Attorney ]

EXHIBIT 24.12

POWER OF ATTORNEY

Reference is hereby made to the proposed registration by Anheuser-Busch InBev SA/NV (“ AB InBev ”), Anheuser-Busch InBev Worldwide Inc., InBev Belgium SA/NV, BrandBrew S.A., Cobrew NV/SA, InBev Nederland N.V., AB InBev France S.A.S., Interbrew International B.V., Interbrew Central European Holding B.V., Nimbuspath Limited, AmBrew S.A. and Anheuser-Busch Companies, Inc. under the US Securities Act of 1933, as amended (the “ Securities Act ”), of U.S.$1,500,000,000 principal amount of 3.000% Notes due 2012, U.S.$1,250,000,000 principal amount of 4.125% Notes due 2015, U.S.$2,250,000,000 principal amount of 5.375% Notes due 2020 and U.S.$500,000,000 principal amount of 6.375% Notes due 2040, together with the guarantees thereof (collectively, the “ Securities ”). Such Securities will be registered on one or more registration statements on Form F-4 (each such registration statement, a “ Registration Statement ”) filed with the US Securities and Exchange Commission (the “ SEC ”).

KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints any Vice-President of AB InBev, the Corporate Secretary or any Assistant Corporate Secretary of AB InBev, and each of them, with full power to act alone, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign one or more Registration Statements, any and all amendments thereto (including post-effective amendments) and any subsequent registration statement in respect of the Securities that is to be effective upon filing by AB InBev pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith in order to effect the registration of the Securities under the Securities Act and qualification of the Securities, the related indenture and any other instrument under the U.S. Trust Indenture Act of 1939, as amended, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

[ Remainder of this page left intentionally blank .]


Date: November 25, 2009   By:  

/s/ John Blood

    Name:   John Blood
    Title:   Authorized Representative in the United States
      Anheuser-Busch InBev SA/NV
      InBev Belgium SA/NV
      BrandBrew S.A.
      Cobrew NV/SA
      InBev Nederland N.V.
      AB InBev France S.A.S.
      Interbrew International B.V.
      Interbrew Central European Holding B.V.
      Nimbuspath Limited
      AmBrew S.A.

[ Authorized Representative in the U.S. — Power of Attorney ]

Exhibit 25.1

 

 

FORM T-1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE

ELIGIBILITY OF A TRUSTEE PURSUANT TO

SECTION 305(b)(2)         ¨

 

 

THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A.

(Exact name of trustee as specified in its charter)

 

  95-3571558

(State of incorporation

if not a U.S. national bank)

 

(I.R.S. employer

identification no.)

700 South Flower Street

Suite 500

Los Angeles, California

(Address of principal executive offices)

 

90017

(Zip code)

 

 

Anheuser-Busch InBev Worldwide Inc.

(Exact name of obligor as specified in its charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

43-1162835

(I.R.S. employer

identification no.)

One Busch Place

St. Louis, Missouri

(Address of principal executive offices)

 

63118

(Zip code)


Anheuser-Busch InBev SA/NV

(Exact name of obligor as specified in its charter)

Belgium

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

Grand Place/Grote Markt 1

1000 Brussels, Belgium

(Address of principal executive offices)

  (Zip code)

AmBrew S.A.

(Exact name of obligor as specified in its charter)

Luxembourg

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

5, Parc d’Activité Syrdall,

L-5365 Münsbach, Luxembourg

(Address of principal executive offices)

  (Zip code)

Cobrew NV/SA

(Exact name of obligor as specified in its charter)

Belgium

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

Brouwerijplein 1,

3000 Leuven, Belgium

(Address of principal executive offices)

  (Zip code)

 

- 2 -


InBev Belgium NV/SA

(Exact name of obligor as specified in its charter)

Belgium

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

21, Boulevard Industriel,

1070 Brussels (Anderlecht), Belgium

(Address of principal executive offices)

  (Zip code)

AB InBev France S.A.S.

(Exact name of obligor as specified in its charter)

France

(State or other jurisdiction

of incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

Immeuble le Crystal Zac Euralille

Romarin, 38 allée Vaubon,

avenue de la République, 59110 France

(Address of principal executive offices)

  (Zip code)

InBev Nederland N.V.

(Exact name of obligor as specified in its charter)

The Netherlands

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

Ceresstraat 1, 4811 CA Breda,

The Netherlands

(Address of principal executive offices)

  (Zip code)

 

- 3 -


Interbrew Central European Holding B.V.

(Exact name of obligor as specified in its charter)

The Netherlands

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

Ceresstraat 1, 4811 CA Breda,

The Netherlands

(Address of principal executive offices)

  (Zip code)

Interbrew International B.V.

(Exact name of obligor as specified in its charter)

The Netherlands

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

Ceresstraat 1, 4811 CA Breda,

The Netherlands

(Address of principal executive offices)

  (Zip code)

Nimbuspath Limited

(Exact name of obligor as specified in its charter)

United Kingdom

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

Porter Tun House, 500 Capability Green,

Luton, Bedfordshire,

LU1 3LS, United Kingdom

(Address of principal executive offices)

  (Zip code)

 

- 4 -


BrandBrew S.A.

(Exact name of obligor as specified in its charter)

Luxembourg

(State or other jurisdiction of

incorporation or organization)

 

Not Applicable

(I.R.S. employer

identification no.)

5, Parc d’Activité Syrdall,

L-5365 Münsbach, Luxembourg

(Address of principal executive offices)

  (Zip code)

Anheuser-Busch Companies, Inc.

(Exact name of obligor as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

 

43-1162835

(I.R.S. employer

identification no.)

One Busch Place

St. Louis, Missouri

(Address of principal executive offices)

 

63118

(Zip code)

 

 

3.00% Notes due 2012

4.125% Notes due 2015

5.375% Notes due 2020

6.375% Notes due 2040

Guarantees of 3.00% Notes due 2012

Guarantees of 4.125% Notes due 2015

Guarantees of 5.375% Notes due 2020

Guarantees of 6.375% Notes due 2040

(Title of the indenture securities)

 

 

 

- 5 -


1. General information. Furnish the following information as to the trustee:

 

  (a) Name and address of each examining or supervising authority to which it is subject.

 

Name

  

Address

Comptroller of the Currency

United States Department of the Treasury

   Washington, D.C. 20219
Federal Reserve Bank    San Francisco, California 94105
Federal Deposit Insurance Corporation    Washington, D.C. 20429

 

  (b) Whether it is authorized to exercise corporate trust powers.

Yes.

 

2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

 

16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).

 

  1. A copy of the articles of association of The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152875).

 

  2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948).

 

  3. A copy of the authorization of the trustee to exercise corporate trust powers (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-152875).

 

- 6 -


  4. A copy of the existing by-laws of the trustee (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-162713).

 

  6. The consent of the trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152875).

 

  7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

 

- 7 -


SIGNATURE

Pursuant to the requirements of the Act, the trustee, The Bank of New York Mellon Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Louis, and State of Missouri, on the 24th day of November, 2009.

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
By:  

/S/ Kerry McFarland

Name:   Kerry McFarland
Title:   Vice President

 

- 8 -


EXHIBIT 7

Consolidated Report of Condition of

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

of 700 South Flower Street, Suite 200, Los Angeles, CA 90017

At the close of business September 30, 2009, published in accordance with Federal regulatory authority instructions.

 

     Dollar Amounts
in Thousands
ASSETS   

Cash and balances due from depository institutions:

  

Noninterest-bearing balances and currency and coin

     1,585

Interest-bearing balances

     426

Securities:

  

Held-to-maturity securities

     16

Available-for-sale securities

     553,806

Federal funds sold and securities purchased under agreements to resell:

  

Federal funds sold

     83,000

Securities purchased under agreements to resell

     0

Loans and lease financing receivables:

  

Loans and leases held for sale

     0

Loans and leases, net of unearned income

     0

LESS: Allowance for loan and lease losses

     0

Loans and leases, net of unearned income and allowance

     0

Trading assets

     0

Premises and fixed assets (including capitalized leases)

     10,983

Other real estate owned

     0

Investments in unconsolidated subsidiaries and associated companies

     1

Direct and indirect investments in real estate ventures

     0

Intangible assets:

  

Goodwill

     852,858

Other intangible assets

     251,145

Other assets

     156,398
      

Total assets

   $ 1,910,218
      

 

1


LIABILITIES   

Deposits:

  

In domestic offices

   1,712

Noninterest-bearing

   1,712

Interest-bearing

   0

Not applicable

  

Federal funds purchased and securities sold under agreements to repurchase:

  

Federal funds purchased

   0

Securities sold under agreements to repurchase

   0

Trading liabilities

   0

Other borrowed money:

  

(includes mortgage indebtedness and obligations under capitalized leases)

   268,691

Not applicable

  

Not applicable

  

Subordinated notes and debentures

   0

Other liabilities

   198,124

Total liabilities

   468,527

Not Applicable

  

EQUITY CAPITAL

  

Perpetual preferred stock and related surplus

   0

Common stock

   1,000

Surplus (exclude all surplus related to preferred stock)

   1,121,520

Not Applicable

  

Retained earnings

   316,907

Accumulated other comprehensive income

   2,264

Other equity capital components

   0

Not Available

  

Total bank equity capital

   1,441,691

Noncontrolling (minority) interests in consolidated subsidiaries

   0

Total equity capital

   1,441,691
    

Total liabilities and equity capital

   1,910,218
    

I, Karen Bayz, Managing Director of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief.

Karen Bayz        )                Managing Director

We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct.

Troy Kilpatrick, MD                   )

Frank P. Sulzberger, MD            )            Directors (Trustees)

William D. Lindelof, MD           )

 

2

EXHIBIT 99.1

LETTER OF TRANSMITTAL

To Tender for Exchange

3.000% Notes due 2012

4.125% Notes due 2015

5.375% Notes due 2020

6.375% Notes due 2040

of

Anheuser-Busch InBev Worldwide Inc.

With an unconditional, full and irrevocable guarantee as to payment of principal and

interest from

Anheuser-Busch InBev SA/NV

and various Subsidiary Guarantors

 

 

Pursuant to the Prospectus dated             , 2009

EACH EXCHANGE OFFER AND RELATED WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON             , 2009 (UNLESS EXTENDED FOR THAT EXCHANGE OFFER (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED WITH RESPECT TO SUCH EXCHANGE OFFER, THE “EXPIRATION DATE”). TENDERS MUST BE MADE PRIOR TO THE EXPIRATION DATE. TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.

The Exchange Agent:

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

 

By Mail, Hand Delivery or Overnight Courier:

 

Bank of New York Mellon Corporation

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, New York 10286

Attention: Carolle Montreuil

 

By Facsimile Transmission:

 

(212) 298-1915

 

Confirm by Telephone

 

(212) 815-5920

For Information, Call: (212) 815-5920

Delivery of this instrument to an address other than as set forth above or transmission of this instrument to a facsimile number other than the one listed above will not constitute a valid delivery. The instructions set forth in this letter of transmittal should be read carefully before this letter of transmittal is completed.


The undersigned acknowledges receipt of the prospectus dated             , 2009 (the “Prospectus”) of Anheuser-Busch InBev Worldwide Inc. (the “Company”) and the various guarantors listed on Annex A hereto (the “Guarantors”) and this Letter of Transmittal (the “Letter of Transmittal”), which, together with the Prospectus, constitute the Company’s offers (each, an “Exchange Offer”, and together, the “Exchange Offers”) to exchange up to $1,500,000,000 aggregate principal amount of the Company’s 3.000% Notes due 2012 (the “New 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s 4.125% Notes due 2015 (the “New 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s 5.375% Notes due 2020 (the “New 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s 6.375% Notes due 2040 (the “New 2040 Notes” and together with the New 2012 Notes, the New 2015 Notes and the New 2020 Notes, the “New Notes”), each of which is unconditionally, fully and irrevocably guaranteed by the Guarantors, and which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for, respectively, up to $1,500,000,000 aggregate principal amount of the Company’s outstanding 3.000% Notes due 2012 (the “Old 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s outstanding 4.125% Notes due 2015 (the “Old 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s outstanding 5.375% Notes due 2020 (the “Old 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s outstanding 6.375% Notes due 2040 (the “Old 2040 Notes” and together with the Old 2012 Notes, the Old 2015 Notes and the Old 2020 Notes, the “Old Notes”), each of which is unconditionally, fully and irrevocably guaranteed by the Guarantors, upon the terms and subject to the conditions set forth in the Prospectus and this Letter of Transmittal.

The Company has filed a registration statement, which became effective under the Securities Act on , 2009, to register the New Notes under the Securities Act.

Recipients of the Prospectus should read the requirements described in such Prospectus with respect to eligibility to participate in the Exchange Offers. Capitalized terms used but not defined herein have the meanings given to them in the Prospectus.

Old Notes may be tendered only by book-entry transfer to the Exchange Agent’s account at The Depository Trust Company (the “Depositary”). Tenders of the Old Notes must be effected in accordance with the procedures mandated by the Depositary’s Automated Tender Offer Program (“ATOP”) and the procedures set forth in the Prospectus under the caption “The Exchange Offers — Book-Entry Transfer.”

The undersigned hereby tenders the Old Notes described in the boxes entitled “Description of Old 2012 Notes,” “Description of Old 2015 Notes,” “Description of Old 2020 Notes” and “Description of Old 2040 Notes” below pursuant to the terms and conditions described in the Prospectus and this Letter of Transmittal. The undersigned is the registered holder of all the Old Notes covered by this Letter of Transmittal and the undersigned represents that it has received from each beneficial owner of Old Notes (“Beneficial Owners”) a duly completed and executed form of “Instruction to Registered Holder from Beneficial Owner” accompanying this Letter of Transmittal, instructing the undersigned to take the action described in this Letter of Transmittal. Registered holder, as used herein, refers to a participant in the Depositary whose name appears on the Depositary’s security position listing as the owner of the Old Notes tendered hereby. The undersigned hereby represents and warrants that the information set forth in the box entitled “Beneficial Owner(s)” is true and correct. Any Beneficial Owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder of Old Notes promptly and instruct such registered holder of Old Notes to tender on behalf of the Beneficial Owner.

In order to properly complete this Letter of Transmittal, a holder of Old Notes must (i) complete the applicable boxes entitled “Description of Old 2012 Notes,” “Description of Old 2015 Notes,” “Description of Old 2020 Notes” and “Description of Old 2040 Notes,” (ii) if appropriate, check and complete the boxes relating to Book-Entry Transfer, Prospectus Copies, Special Issuance Instructions and Beneficial Owner(s), (iii) sign this Letter of Transmittal by completing the box entitled “Sign Here,” and (iv) complete and sign the attached IRS Form W-9, or if applicable, the appropriate Form W-8 (which can be found at www.irs.gov). Each holder of Old Notes should carefully read the detailed instructions below prior to completing the Letter of Transmittal. If the holder of Old Notes wishes to tender for exchange less than all of such holder’s Old Notes, column (3) in the applicable boxes entitled “Description of Old 2012 Notes” “Description of Old 2015 Notes,” “Description of Old 2020 Notes” and “Description of the Old 2040 Notes” must be completed in full. See also Instruction 5.

 

2


DESCRIPTION OF OLD 2012 NOTES
(1)    (2)    (3)

Name(s) and Address(es) of

Registered Holder(s) of Old 2012 Notes,

Exactly as the Name of the Participant

Appears on the Book-Entry Transfer Facility’s

Security Position Listing

(Please fill in, if blank)

   Aggregate
Principal
Amount
  

Principal Amount

Tendered for Exchange

(only if different amount

from Column (2))

(Must be in minimum

denominations of $2,000
and

integral multiples of
$1,000 in

excess thereof) (1)

           
           
           
           
           
           
           
           
           
           
           
           
           

 

1.

Column (3) need not be completed by holders of Old 2012 Notes who wish to tender for exchange the principal amount of Old 2012 Notes listed in column (2). Completion of column (3) will indicate that the holder of Old 2012 Notes wishes to tender for exchange only the principal amount of Old 2012 Notes indicated in column (3).

 

¨

CHECK HERE IF OLD 2012 NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITARY AND COMPLETE THE FOLLOWING:

 

Name of Tendering

Institution:

 

 

Account

Number:

 

 

Transaction Code

Number:

 

 

 

3


BY CREDITING THE OLD 2012 NOTES TO THE EXCHANGE AGENT’S ACCOUNT WITH THE DEPOSITARY’S ATOP AND BY COMPLYING WITH APPLICABLE ATOP PROCEDURES WITH RESPECT TO THE EXCHANGE OFFER, THE HOLDER OF THE OLD 2012 NOTES ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS LETTER OF TRANSMITTAL AND CONFIRMS ON BEHALF OF ITSELF AND THE BENEFICIAL OWNERS OF SUCH OLD 2012 NOTES ALL PROVISIONS OF THIS LETTER OF TRANSMITTAL APPLICABLE TO IT AND SUCH BENEFICIAL OWNERS AS FULLY AS IF SUCH BENEFICIAL OWNERS HAD COMPLETED THE INFORMATION REQUIRED HEREIN AND EXECUTED AND TRANSMITTED THIS LETTER OF TRANSMITTAL.

ATTENTION BROKER-DEALERS: IMPORTANT NOTICE

CONCERNING YOUR ABILITY TO RESELL THE NEW 2012 NOTES

IF THE COMPANY OR THE EXCHANGE AGENT DOES NOT RECEIVE ANY LETTERS OF TRANSMITTAL FROM BROKER-DEALERS REQUESTING ADDITIONAL COPIES OF THE PROSPECTUS FOR USE IN CONNECTION WITH RESALES OF THE NEW NOTES, THE COMPANY INTENDS TO TERMINATE THE EFFECTIVENESS OF THE REGISTRATION STATEMENT AS SOON AS PRACTICABLE AFTER THE CONSUMMATION OR TERMINATION OF THE EXCHANGE OFFERS. IF THE EFFECTIVENESS OF THE REGISTRATION STATEMENT IS TERMINATED, YOU WILL NOT BE ABLE TO USE THE PROSPECTUS IN CONNECTION WITH RESALES OF NEW 2012 NOTES AFTER SUCH TIME. SEE SECTION ENTITLED “THE EXCHANGE OFFERS — TERMS OF THE EXCHANGE OFFERS” CONTAINED IN THE PROSPECTUS FOR MORE INFORMATION.

 

¨

CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

 

Name:  

 

Address:  

 

Telephone No.:  

 

IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED REPRESENTS THAT IT IS NOT PARTICIPATING IN, AND DOES NOT INTEND TO PARTICIPATE IN, A DISTRIBUTION OF NEW 2012 NOTES. IF THE UNDERSIGNED IS A BROKER-DEALER THAT WILL RECEIVE NEW 2012 NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD 2012 NOTES THAT WERE ACQUIRED AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, IT ACKNOWLEDGES THAT IT WILL DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF SUCH NEW 2012 NOTES; HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, THE UNDERSIGNED WILL NOT BE DEEMED TO ADMIT THAT IT IS AN “UNDERWRITER” WITHIN THE MEANING OF THE SECURITIES ACT.

 

4


SPECIAL ISSUANCE INSTRUCTIONS

(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if Old 2012 Notes tendered by book-entry transfer which are not exchanged are to be returned by credit to an account maintained at the Depositary other than the account referred to on the second preceding page.

Credit Old 2012 Notes not exchanged and delivered by book-entry transfer to the Depositary account set forth below:

 

 

(Account Number)

 

BENEFICIAL OWNER(S)

STATE OF PRINCIPAL RESIDENCE OF EACH

BENEFICIAL OWNER OF OLD 2012 NOTES

  PRINCIPAL AMOUNT OF OLD 2012 NOTES HELD
FOR ACCOUNT OF BENEFICIAL OWNER(S)
   
     
   
     
   
     
   
     
   
     
   
     
   
     
   
     

 

5


DESCRIPTION OF OLD 2015 NOTES
(1)    (2)    (3)

Name(s) and Address(es) of

Registered Holder(s) of Old 2015 Notes,

Exactly as the Name of the Participant

Appears on the Book-Entry Transfer Facility’s

Security Position Listing

(Please fill in, if blank)

   Aggregate
Principal
Amount
  

Principal Amount

Tendered for Exchange

(only if different amount

from Column (2))

(Must be in minimum

denominations of $2,000
and

integral multiples of
$1,000 in

excess thereof) (1)

           
           
           
           
           
           
           
           
           
           
           
           
           

 

1.

Column (3) need not be completed by holders of Old 2015 Notes who wish to tender for exchange the principal amount of Old 2015 Notes listed in column (2). Completion of column (3) will indicate that the holder of Old 2015 Notes wishes to tender for exchange only the principal amount of Old 2015 Notes indicated in column (3).

 

¨

CHECK HERE IF OLD 2015 NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITARY AND COMPLETE THE FOLLOWING:

 

Name of Tendering

Institution:

 

 

Account

Number:

 

 

Transaction Code

Number:

 

 

 

6


BY CREDITING THE OLD 2015 NOTES TO THE EXCHANGE AGENT’S ACCOUNT WITH THE DEPOSITARY’S ATOP AND BY COMPLYING WITH APPLICABLE ATOP PROCEDURES WITH RESPECT TO THE EXCHANGE OFFER, THE HOLDER OF THE OLD 2015 NOTES ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS LETTER OF TRANSMITTAL AND CONFIRMS ON BEHALF OF ITSELF AND THE BENEFICIAL OWNERS OF SUCH OLD 2015 NOTES ALL PROVISIONS OF THIS LETTER OF TRANSMITTAL APPLICABLE TO IT AND SUCH BENEFICIAL OWNERS AS FULLY AS IF SUCH BENEFICIAL OWNERS HAD COMPLETED THE INFORMATION REQUIRED HEREIN AND EXECUTED AND TRANSMITTED THIS LETTER OF TRANSMITTAL.

ATTENTION BROKER-DEALERS: IMPORTANT NOTICE

CONCERNING YOUR ABILITY TO RESELL THE NEW 2015 NOTES

IF THE COMPANY OR THE EXCHANGE AGENT DOES NOT RECEIVE ANY LETTERS OF TRANSMITTAL FROM BROKER-DEALERS REQUESTING ADDITIONAL COPIES OF THE PROSPECTUS FOR USE IN CONNECTION WITH RESALES OF THE NEW NOTES, THE COMPANY INTENDS TO TERMINATE THE EFFECTIVENESS OF THE REGISTRATION STATEMENT AS SOON AS PRACTICABLE AFTER THE CONSUMMATION OR TERMINATION OF THE EXCHANGE OFFER. IF THE EFFECTIVENESS OF THE REGISTRATION STATEMENT IS TERMINATED, YOU WILL NOT BE ABLE TO USE THE PROSPECTUS IN CONNECTION WITH RESALES OF NEW 2015 NOTES AFTER SUCH TIME. SEE SECTION ENTITLED “THE EXCHANGE OFFERS — TERMS OF THE EXCHANGE OFFERS” CONTAINED IN THE PROSPECTUS FOR MORE INFORMATION.

 

¨

CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

 

Name:  

 

Address:  

 

Telephone No.:  

 

IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED REPRESENTS THAT IT IS NOT PARTICIPATING IN, AND DOES NOT INTEND TO PARTICIPATE IN, A DISTRIBUTION OF NEW 2015 NOTES. IF THE UNDERSIGNED IS A BROKER-DEALER THAT WILL RECEIVE NEW 2015 NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD 2015 NOTES THAT WERE ACQUIRED AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, IT ACKNOWLEDGES THAT IT WILL DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF SUCH NEW 2015 NOTES; HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, THE UNDERSIGNED WILL NOT BE DEEMED TO ADMIT THAT IT IS AN “UNDERWRITER” WITHIN THE MEANING OF THE SECURITIES ACT.

 

7


SPECIAL ISSUANCE INSTRUCTIONS

(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if Old 2015 Notes tendered by book-entry transfer which are not exchanged are to be returned by credit to an account maintained at the Depositary other than the account referred to on the second preceding page.

Credit Old 2015 Notes not exchanged and delivered by book-entry transfer to the Depositary account set forth below:

 

 

(Account Number)

 

BENEFICIAL OWNER(S)

STATE OF PRINCIPAL RESIDENCE OF EACH

BENEFICIAL OWNER OF OLD 2015 NOTES

 

PRINCIPAL AMOUNT OF OLD 2015 NOTES HELD

FOR ACCOUNT OF BENEFICIAL OWNER(S)

   
     
   
     
   
     
   
     
   
     
   
     
   
     
   
     

 

8


DESCRIPTION OF OLD 2020 NOTES
(1)    (2)    (3)
Name(s) and Address(es) of
Registered Holder(s) of Old 2020 Notes,
Exactly as the Name of the Participant
Appears on the Book-Entry Transfer Facility’s
Security Position Listing
(Please fill in, if blank)
   Aggregate
Principal
Amount
  

Principal Amount

Tendered for Exchange

(only if different amount

from Column (2))

(Must be in minimum

denominations of $2,000
and

integral multiples of
$1,000 in

excess thereof) (1)

           
           
           
           
           
           
           
           
           
           
           
           
           

 

1.

Column (3) need not be completed by holders of Old 2020 Notes who wish to tender for exchange the principal amount of Old 2020 Notes listed in column (2). Completion of column (3) will indicate that the holder of Old 2020 Notes wishes to tender for exchange only the principal amount of Old 2020 Notes indicated in column (3).

 

¨

CHECK HERE IF OLD 2020 NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITARY AND COMPLETE THE FOLLOWING:

 

Name of Tendering

Institution:

 

 

Account

Number:

 

 

Transaction Code

Number:

 

 

 

9


BY CREDITING THE OLD 2020 NOTES TO THE EXCHANGE AGENT’S ACCOUNT WITH THE DEPOSITARY’S ATOP AND BY COMPLYING WITH APPLICABLE ATOP PROCEDURES WITH RESPECT TO THE EXCHANGE OFFER, THE HOLDER OF THE OLD 2020 NOTES ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS LETTER OF TRANSMITTAL AND CONFIRMS ON BEHALF OF ITSELF AND THE BENEFICIAL OWNERS OF SUCH OLD 2020 NOTES ALL PROVISIONS OF THIS LETTER OF TRANSMITTAL APPLICABLE TO IT AND SUCH BENEFICIAL OWNERS AS FULLY AS IF SUCH BENEFICIAL OWNERS HAD COMPLETED THE INFORMATION REQUIRED HEREIN AND EXECUTED AND TRANSMITTED THIS LETTER OF TRANSMITTAL.

ATTENTION BROKER-DEALERS: IMPORTANT NOTICE

CONCERNING YOUR ABILITY TO RESELL THE NEW 2020 NOTES

IF THE COMPANY OR THE EXCHANGE AGENT DOES NOT RECEIVE ANY LETTERS OF TRANSMITTAL FROM BROKER-DEALERS REQUESTING ADDITIONAL COPIES OF THE PROSPECTUS FOR USE IN CONNECTION WITH RESALES OF THE NEW NOTES, THE COMPANY INTENDS TO TERMINATE THE EFFECTIVENESS OF THE REGISTRATION STATEMENT AS SOON AS PRACTICABLE AFTER THE CONSUMMATION OR TERMINATION OF THE EXCHANGE OFFERS. IF THE EFFECTIVENESS OF THE REGISTRATION STATEMENT IS TERMINATED, YOU WILL NOT BE ABLE TO USE THE PROSPECTUS IN CONNECTION WITH RESALES OF NEW 2020 NOTES AFTER SUCH TIME. SEE SECTION ENTITLED “THE EXCHANGE OFFERS — TERMS OF THE EXCHANGE OFFERS” CONTAINED IN THE PROSPECTUS FOR MORE INFORMATION.

 

¨

CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

 

Name:  

 

Address:  

 

Telephone No.:  

 

IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED REPRESENTS THAT IT IS NOT PARTICIPATING IN, AND DOES NOT INTEND TO PARTICIPATE IN, A DISTRIBUTION OF NEW 2020 NOTES. IF THE UNDERSIGNED IS A BROKER-DEALER THAT WILL RECEIVE NEW 2020 NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD 2020 NOTES THAT WERE ACQUIRED AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, IT ACKNOWLEDGES THAT IT WILL DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF SUCH NEW 2020 NOTES; HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, THE UNDERSIGNED WILL NOT BE DEEMED TO ADMIT THAT IT IS AN “UNDERWRITER” WITHIN THE MEANING OF THE SECURITIES ACT.

 

10


SPECIAL ISSUANCE INSTRUCTIONS

(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if Old 2020 Notes tendered by book-entry transfer which are not exchanged are to be returned by credit to an account maintained at the Depositary other than the account referred to on the second preceding page.

Credit Old 2020 Notes not exchanged and delivered by book-entry transfer to the Depositary account set forth below:

 

 

(Account Number)

 

BENEFICIAL OWNER(S)

STATE OF PRINCIPAL RESIDENCE OF EACH

BENEFICIAL OWNER OF OLD 2020 NOTES

 

PRINCIPAL AMOUNT OF OLD 2020 NOTES HELD

FOR ACCOUNT OF BENEFICIAL OWNER(S)

   
     
   
     
   
     
   
     
   
     
   
     
   
     
   
     

 

11


DESCRIPTION OF OLD 2040 NOTES
(1)    (2)    (3)

Name(s) and Address(es) of

Registered Holder(s) of Old 2040 Notes,

Exactly as the Name of the Participant

Appears on the Book-Entry Transfer Facility’s

Security Position Listing

(Please fill in, if blank)

  

Aggregate

Principal

Amount

  

Principal Amount

Tendered for Exchange

(only if different amount

from Column (2))

(Must be in minimum

denominations of $2,000

and

integral multiples of

$1,000 in

excess thereof) (1)

           
           
           
           
           
           
           
           
           
           
           
           
           

 

1.

Column (3) need not be completed by holders of Old 2040 Notes who wish to tender for exchange the principal amount of Old 2040 Notes listed in column (2). Completion of column (3) will indicate that the holder of Old 2040 Notes wishes to tender for exchange only the principal amount of Old 2040 Notes indicated in column (3).

 

¨ CHECK HERE IF OLD 2040 NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITARY AND COMPLETE THE FOLLOWING:

 

Name of Tendering

Institution:

 

 

Account
Number:  

 

Transaction Code
Number:  

 

 

12


BY CREDITING THE OLD 2040 NOTES TO THE EXCHANGE AGENT’S ACCOUNT WITH THE DEPOSITARY’S ATOP AND BY COMPLYING WITH APPLICABLE ATOP PROCEDURES WITH RESPECT TO THE EXCHANGE OFFER, THE HOLDER OF THE OLD 2040 NOTES ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS LETTER OF TRANSMITTAL AND CONFIRMS ON BEHALF OF ITSELF AND THE BENEFICIAL OWNERS OF SUCH OLD 2040 NOTES ALL PROVISIONS OF THIS LETTER OF TRANSMITTAL APPLICABLE TO IT AND SUCH BENEFICIAL OWNERS AS FULLY AS IF SUCH BENEFICIAL OWNERS HAD COMPLETED THE INFORMATION REQUIRED HEREIN AND EXECUTED AND TRANSMITTED THIS LETTER OF TRANSMITTAL.

ATTENTION BROKER-DEALERS: IMPORTANT NOTICE

CONCERNING YOUR ABILITY TO RESELL THE NEW 2040 NOTES

IF THE COMPANY OR THE EXCHANGE AGENT DOES NOT RECEIVE ANY LETTERS OF TRANSMITTAL FROM BROKER-DEALERS REQUESTING ADDITIONAL COPIES OF THE PROSPECTUS FOR USE IN CONNECTION WITH RESALES OF THE NEW NOTES, THE COMPANY INTENDS TO TERMINATE THE EFFECTIVENESS OF THE REGISTRATION STATEMENT AS SOON AS PRACTICABLE AFTER THE CONSUMMATION OR TERMINATION OF THE EXCHANGE OFFERS. IF THE EFFECTIVENESS OF THE REGISTRATION STATEMENT IS TERMINATED, YOU WILL NOT BE ABLE TO USE THE PROSPECTUS IN CONNECTION WITH RESALES OF NEW 2040 NOTES AFTER SUCH TIME. SEE SECTION ENTITLED “THE EXCHANGE OFFERS — TERMS OF THE EXCHANGE OFFERS” CONTAINED IN THE PROSPECTUS FOR MORE INFORMATION.

 

¨

CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

 

Name:  

 

Address:  

 

Telephone No.:  

 

IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED REPRESENTS THAT IT IS NOT PARTICIPATING IN, AND DOES NOT INTEND TO PARTICIPATE IN, A DISTRIBUTION OF NEW 2040 NOTES. IF THE UNDERSIGNED IS A BROKER-DEALER THAT WILL RECEIVE NEW 2040 NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD 2040 NOTES THAT WERE ACQUIRED AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, IT ACKNOWLEDGES THAT IT WILL DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF SUCH NEW 2040 NOTES; HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, THE UNDERSIGNED WILL NOT BE DEEMED TO ADMIT THAT IT IS AN “UNDERWRITER” WITHIN THE MEANING OF THE SECURITIES ACT.

 

13


SPECIAL ISSUANCE INSTRUCTIONS

(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if Old 2040 Notes tendered by book-entry transfer which are not exchanged are to be returned by credit to an account maintained at the Depositary other than the account referred to on the second preceding page.

Credit Old 2040 Notes not exchanged and delivered by book-entry transfer to the Depositary account set forth below:

 

 

(Account Number)

 

BENEFICIAL OWNER(S)

STATE OF PRINCIPAL RESIDENCE OF EACH

BENEFICIAL OWNER OF OLD 2040 NOTES

 

PRINCIPAL AMOUNT OF OLD 2040 NOTES HELD

FOR ACCOUNT OF BENEFICIAL OWNER(S)

   
     
   
     
   
     
   
     
   
     
   
     
   
     
   
     

 

14


SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Pursuant to the offers by Anheuser-Busch InBev Worldwide Inc., a Delaware corporation (the “Company”), upon the terms and subject to the conditions set forth in the prospectus dated , 2009 (the “Prospectus”) and this Letter of Transmittal (this “Letter of Transmittal”), which, together with the Prospectus, constitutes the Company’s offers (each, an “Exchange Offer” and together the “Exchange Offers”) to exchange up to $1,500,000,000 aggregate principal amount of the Company’s 3.000% Notes due 2012 (the “New 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s 4.125% Notes due 2015 (the “New 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s 5.375% Notes due 2020 (the “New 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s 6.375% Notes due 2040 (the “New 2040 Notes” and together with the New 2012 Notes, the New 2015 Notes and the New 2020 Notes, the “New Notes”), each of which are unconditionally, fully and irrevocably guaranteed by the various guarantors listed on Annex A hereto (the “Guarantors”), and which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for, respectively, up to $1,500,000,000 aggregate principal amount of the Company’s outstanding 3.000% Notes due 2012 (the “Old 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s outstanding 4.125% Notes due 2015 (the “Old 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s outstanding 5.375% Notes due 2020 (the “Old 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s outstanding 6.375% Notes due 2040 (the “Old 2040 Notes” and together with the Old 2012 Notes, the Old 2015 Notes and the Old 2020 Notes, the “Old Notes”), each of which are unconditionally, fully and irrevocably guaranteed by the Guarantors, the undersigned hereby tenders to the Company for exchange the Old Notes indicated above.

The undersigned understands and agrees that the Company has filed a registration statement to register the New Notes under the Securities Act and will not accept for exchange any Old Notes until the registration statement has become effective under the Securities Act.

By executing this Letter of Transmittal and subject to and effective upon acceptance for exchange of the Old Notes tendered for exchange herewith, the undersigned (i) acknowledges and agrees that the Company shall have fully performed all of its obligations to conduct an “Exchange Offer” under the Registration Rights Agreement, dated as of October 16, 2009, among the Company, the Guarantors and the Initial Purchasers (as defined therein) (the “Registration Rights Agreement”), (ii) will have irrevocably sold, assigned and transferred to the Company all right, title and interest in, to and under all of the Old Notes tendered for exchange hereby, and (iii) hereby appoints The Bank of New York Mellon Trust Company, N.A. (the “Exchange Agent”) as the true and lawful agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as agent of the Company) of such holder of Old Notes with respect to such Old Notes, with full power of substitution, to (x) transfer ownership of such Old Notes on the account books maintained by The Depository Trust Company (the “Depositary”) (together with all accompanying evidences of transfer and authenticity), (y) take any action necessary to transfer such Old Notes to the Company, and (z) receive all benefits and otherwise exercise all rights and incidents of ownership with respect to such Old Notes, all in accordance with the terms of the Exchange Offers. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest.

The undersigned hereby represents and warrants that (i) the undersigned has full power and authority to tender, exchange, assign and transfer the Old Notes, and (ii) when such Old Notes are accepted for exchange by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all security interests, liens, restrictions, charges, encumbrances, or other obligations relating to their sale and transfer, and not subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the tender, exchange, assignment and transfer of the Old Notes tendered for exchange hereby.

 

15


The undersigned hereby further represents to the Company that (i) the New Notes to be acquired pursuant to the Exchange Offers will be acquired in the ordinary course of business of the person acquiring the New Notes, whether or not such person is the undersigned, (ii) neither the undersigned nor any person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers (if not a broker-dealer referred to in the last sentence of this paragraph) is participating or intends to participate in the distribution of the New Notes and none of them have any arrangement or understanding with any person to participate in the distribution of the New Notes, (iii) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers acknowledge and agree that any broker-dealer or any person participating in the Exchange Offers for the purpose of distributing the New Notes (x) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the New Notes acquired by such person, (y) cannot rely on the position of the staff of the Securities and Exchange Commission (the “Commission”) set forth in the Exxon Capital Holdings Corporation no-action letter (available May 13, 1988) and the Morgan Stanley and Co., Inc. no-action letter (available June 5, 1991), as interpreted in the Commission’s no-action letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters and (z) in the European Economic Area, will not make an offer or sale which will require the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (iv) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers understand that a secondary resale transaction described in clause (iii) above should be covered by an effective registration statement, (v) neither the undersigned nor any person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers is an “affiliate” of the Company, as defined under Rule 405 under the Securities Act, or if it is such an “affiliate”, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (vi) if the undersigned is a broker-dealer, it did not purchase the Old Notes to be exchanged for New Notes from the Company or any of its affiliates, and it will acquire the New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other activities, (vii) neither the undersigned nor any person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers is prohibited by any law or policy from participating in the Exchange Offers, (viii) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers acknowledges and agrees that, if it is located in a member state of the European Economic Area which has implemented Directive 2003/71/ED (the “Prospectus Directive”), it is either (x) a legal entity authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or (y) a legal entity which has two or more of: (a) an average of at least 250 employees during the last financial year; (b) a total balance sheet of more than €43,000,000; and (c) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts and that, in each case, it will not make any offer which will require the Company to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (ix) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers acknowledges and agrees that it is not located or resident in the United Kingdom or, if it is located or resident in the United Kingdom, it is a person falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or within Article 43(2) of the Order, or to whom this Letter of Transmittal or the accompanying Prospectus may lawfully be communicated in accordance with the order and (x) the undersigned is not acting on behalf of any person who could not truthfully and completely make the representations contained in the forgoing subclauses (i) through (ix). If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market making or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes received in respect of such Old Notes pursuant to the Exchange Offers; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The Company has agreed that, subject to the provisions of the Registration Rights Agreement, the Prospectus, as it may be amended or supplemented from time to time, may be used by a participating broker-dealer (as defined below) in connection with resales of New Notes received in exchange for Old Notes, where

 

16


such Old Notes were acquired by such participating broker-dealer for its own account as a result of market-making activities or other trading activities, for a period beginning on the day that New Notes are first issued in an Exchange Offer and ending upon the earlier of the expiration of the 90th day after such Exchange Offer has been completed (or such shorter period during which participating broker-dealers or such other persons are required by law to deliver such prospectus). In that regard, each broker-dealer who acquired Old Notes for its own account as a result of market-making or other trading activities (a “participating broker-dealer”), by tendering such Old Notes and pursuant to this Letter of Transmittal, agrees that, upon receipt of notice from the Company of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in the prospectus untrue in any material respect or which causes the prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference therein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the registration rights agreement, such participating broker-dealer will suspend the sale of New Notes pursuant to the prospectus until the Company has amended or supplemented the prospectus to correct such misstatement or omission and have furnished copies of the amended or supplemented prospectus to the participating broker-dealer.

The undersigned acknowledges that, for purposes of each Exchange Offer, the Company will be deemed to have accepted for exchange, and to have exchanged, validly tendered Old Notes, if, as and when the Company gives oral (promptly confirmed in writing) or written notice thereof to the Exchange Agent. The undersigned acknowledges that the Company’s acceptance of Old Notes validly tendered for exchange pursuant to any one of the procedures described in the section of the Prospectus entitled “The Exchange Offers” and in the instructions hereto will constitute a valid, binding and enforceable agreement between the undersigned and the Company upon the terms and subject to the conditions of the applicable Exchange Offer. Tenders of Old Notes for exchange may be withdrawn at any time prior to the Expiration Date.

Unless otherwise indicated in the boxes entitled “Special Issuance Instructions,” please return any Old Notes not tendered for exchange to the undersigned. The undersigned recognizes that the Company has no obligation pursuant to the “Special Issuance Instructions” to transfer any Old Notes if the Company does not accept for exchange any of the Old Notes so tendered for exchange or if such transfer would not be in compliance with any transfer restrictions applicable to such Old Notes.

All authority herein conferred or agreed to be conferred shall survive the death, incapacity, liquidation, dissolution, winding up or any other event relating to the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise stated in the Prospectus, this tender for exchange of Old Notes is irrevocable.

 

17


SIGN HERE

 

X

 

 

   

Date:

  

 

  Signature of Owner       

MUST BE SIGNED BY THE REGISTERED HOLDER(S) OF OLD NOTES EXACTLY AS NAME(S) APPEAR(S) ON A SECURITY POSITION LISTING. IF SIGNATURE IS BY TRUSTEES, EXECUTORS, ADMINISTRATORS, GUARDIANS, ATTORNEYS-IN-FACT, OFFICERS OF CORPORATIONS OR OTHERS ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE PROVIDE THE FOLLOWING INFORMATION (AND INDICATE PARENTHETICALLY WITH RESPECT TO WHICH SERIES OF OLD NOTES THE INFORMATION IS BEING PROVIDED). (SEE INSTRUCTION 6.)

 

 

 

Names(s)

 

Capacity (Full Title)

 

Address (including zip code)

 

Area Code and Telephone Number

 

Tax Identification Number

GUARANTEE OF SIGNATURE(S)

(SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 1)

X

 

 

   

Date:

  

 

  Signature of Owner       

 

Name and Title

 

18


INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

 

1. Guarantee of Signatures.

Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by an institution which is a member of the New York Stock Exchange Medallion Signature Program or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an “Eligible Institution”). Signatures on this Letter of Transmittal need not be guaranteed if such Old Notes are tendered for the account of an Eligible Institution. IN ALL OTHER CASES, ALL SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.

 

2. Delivery of this Letter of Transmittal and Old Notes.

This Letter of Transmittal is to be completed by holders of Old Notes if tenders are to be made pursuant to the procedures for tender by book-entry transfer unless an agent’s message is transmitted in lieu hereof. All deliveries of Old Notes must be made to the account of the Exchange Agent maintained at the Depositary. A confirmation of a book-entry transfer (a “Book-Entry Confirmation”), as well as any other documents required by this Letter of Transmittal, must be received by the Exchange Agent prior to the Expiration Date.

THE METHOD OF DELIVERY OF OLD NOTES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER OF OLD NOTES. EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. AS AN ALTERNATIVE TO DELIVERY BY MAIL, THE HOLDER MAY WISH TO CONSIDER USING AN OVERNIGHT OR HAND DELIVERY SERVICE. THE LETTER OF TRANSMITTAL SHOULD NOT BE SENT TO THE COMPANY.

No alternative, conditional or contingent tenders will be accepted. All tendering holders of Old Notes, by execution of this Letter of Transmittal (or facsimile hereof, if applicable), waive any right to receive notice of the acceptance of their Old Notes for exchange.

 

3. Inadequate Space.

If the space provided in the boxes entitled “Description of Old 2012 Notes,” “Description of Old 2015 Notes,” “Description of Old 2020 Notes,” and “Description of Old 2040 Notes” above is inadequate, the principal amounts of the Old Notes being tendered should be listed on a separate signed schedule affixed hereto.

 

4. Withdrawals.

A tender of Old Notes may be withdrawn at any time prior to the Expiration Date by delivery of an ATOP electronic transmission notice of withdrawal and the Exchange Agent must receive the electronic notice of withdrawal from the Depositary prior to the Expiration Date. Withdrawals of tenders of Old Notes may not be rescinded, and any Old Notes withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offers, and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered by following the procedure described in the section of the Prospectus entitled “The Exchange Offers — Procedures for Tendering” at any time prior to the Expiration Date.

 

5. Partial Tenders.

Tenders of Old Notes will be accepted only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. In addition, untendered portions of the Old Notes must be in minimum denominations of $2,000 and integral multiples of $1,000 as well. If a tender for exchange is to be made with

 

19


respect to less than the entire principal amount of any Old Notes, fill in the principal amount of Old Notes which are tendered for exchange in column (3) of the boxes entitled “Description of Old 2012 Notes,” “Description of Old 2015 Notes,” “Description of Old 2020 Notes,” and “Description of Old 2040 Notes,” as applicable. In case of a partial tender for exchange, the untendered principal amount of the Old Notes will be credited to the Depositary account of the tendering holder, unless otherwise indicated in the appropriate box on this Letter of Transmittal, promptly after the expiration or termination of the Exchange Offers.

 

6. Signatures on this Letter of Transmittal and Powers of Attorney.

The signature(s) of the holder of Old Notes on this Letter of Transmittal must correspond with the name of such holder as it appears on a security position listing maintained by the Depositary, without any change whatsoever.

When this Letter of Transmittal is signed by the holder of the Old Notes listed and transmitted hereby, no separate powers of attorney are required. If, however, Old Notes not tendered or not accepted are to be issued or returned to a person other than the holder of Old Notes, then the Old Notes transmitted hereby must be accompanied by appropriate powers of attorney in a form satisfactory to the Company, in either case signed exactly as the name(s) of the holder of Old Notes appear(s) on a security position listing maintained by the Depositary. Signatures on such powers of attorney must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution).

If this Letter of Transmittal or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Company of their authority so to act must be submitted.

 

7. Transfer Taxes.

Except as set forth in this Instruction 7, the Company will pay all transfer taxes, if any, applicable to the transfer and exchange of Old Notes pursuant to the Exchange Offers. If issuance of New Notes is to be made to, or Old Notes not tendered for exchange are to be issued or returned to, any person other than the tendering holder, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offers, and satisfactory evidence of payment of such taxes or exemptions therefrom is not submitted with this Letter of Transmittal, the amount of any transfer taxes payable on account of any such transfer will be imposed on and payable by the tendering holder of Old Notes prior to the issuance of the New Notes.

 

8. Irregularities.

All questions as to the form of documents and the validity, eligibility (including time of receipt), acceptance and withdrawal of Old Notes will be determined by the Company, in the its sole discretion, whose determination shall be final and binding. The Company reserves the absolute right to reject any or all tenders for exchange of any particular Old Notes that are not in proper form, or the acceptance of which would, in the opinion of the Company (or its counsel), be unlawful. The Company reserves the absolute right to waive any defect, irregularity or condition of tender for exchange with regard to any particular Old Notes. The Company’s interpretation of the terms of, and conditions to, the Exchange Offers (including the instructions herein) will be final and binding. Unless waived, any defects or irregularities in connection with the Exchange Offers must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notice of any defects or irregularities in Old Notes tendered for exchange, nor shall any of them incur any liability for failure to give such notice. A tender of Old Notes will not be deemed to have been made until all defects and irregularities with respect to such tender have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in this Letter of Transmittal, promptly following the Expiration Date.

 

20


9. Requests for Information or Additional Copies.

Requests for information about the procedure for tendering or for withdrawing tenders, or for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address or telephone number set forth on the cover of this Letter of Transmittal. All other questions about the Exchange Offers should be addressed to Robert Ottenstein at the Company (telephone number — (212) 573-4365)

IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF, IF APPLICABLE) OR AN AGENT’S MESSAGE TRANSMITTED BY THE DEPOSITARY TOGETHER WITH CONFIRMATION OF BOOK-ENTRY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

 

21


Name (as shown on your income tax return)
Business Name, if different from above

Check appropriate box: ¨ Individual/Sole proprietor ¨ Corporation ¨ Partnership ¨ Limited Liability Company. Enter the tax classification (D = Disregarded entity, C = Corporation, P = Partnership).                                                              

¨ Other                                                          

Address
City, State, and ZIP Code

SUBSTITUTE

 

Form W-9

  PART 1 — Taxpayer Identification Number — Please provide your TIN in the box at right and certify by signing and dating below. If awaiting TIN, write “Applied For” and see the note below.  

 

Social Security Number

OR

 

       

 

Employer Identification Number

Department of the Treasury

Internal Revenue Service

  PART 2 — If you are exempt from backup withholding, please check the box at right.   ¨ Exempt Payee

Payer’s Request for Taxpayer

Identification Number (“TIN”)

and Certification

 

PART 3 — Certification — Under penalties of perjury, I certify that:

 

(1)    The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me),

(2)    I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and

(3)    I am a U.S. citizen or other U.S. person (see the “General Instructions for Completing Substitute Form W-9” below).

    Certification Instructions. — You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item 2.
The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

 

SIGNATURE  

 

  DATE  

 

NOTE:   FAILURE TO COMPLETE THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 28% ON ANY PAYMENTS MADE TO YOU PURSUANT TO THE NEW NOTES. IN ADDITION, FAILURE TO PROVIDE SUCH INFORMATION MAY RESULT IN A PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF YOUR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE “APPLIED FOR” IN THE APPROPRIATE LINE IN PART 1 OF SUBSTITUTE FORM W-9.

 

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 28% of all reportable payments made to me will be withheld.

 

Signature

 

 

  Date  

 

 


IRS Circular 230 Notice: To ensure compliance with Internal Revenue Service Circular 230, you are hereby notified that: (a) any discussion of U.S. federal tax issues contained or referred to in this communication or any document referred to herein is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you under the Internal Revenue Code; (b) such discussion is written for use in connection with the promotion or marketing of the transactions or matters addressed herein; and (c) you should seek advice based on your particular circumstances from an independent tax advisor.

GENERAL INSTRUCTIONS FOR COMPLETING SUBSTITUTE FORM W-9

All “section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service.

Purpose of Form

United States federal income tax law generally requires that a U.S. person who receives a reportable payment provide the payer with its correct Taxpayer Identification Number (TIN), which, in the case of a holder who is an individual, is generally the individual’s social security number. If the payer is not provided with the correct TIN or an adequate basis for an exemption, such holder may be subject to penalties imposed by the Internal Revenue Service and backup withholding in an amount equal to 28% of the gross proceeds of any payment received hereunder. If backup withholding results in an overpayment of taxes, a refund may generally be obtained.

You should use Substitute Form W-9 only if you are a U.S. person (including a resident alien) to give your correct TIN to the person requesting it (the requester) and, when applicable, (1) to certify that the TIN you are giving is correct (or you are waiting for a number to be issued), (2) to certify that you are not subject to backup withholding, or (3) to claim exemption from backup withholding if you are a U.S. exempt payee. The TIN provided must match the name given on the Substitute Form W-9. If you are a nonresident alien or foreign entity not subject to backup withholding, you should not use Substitute Form W-9. Instead, you should provide the requester with an appropriate Form W-8. Forms W-8 and instructions for completing Forms W-8 can be obtained at www.irs.gov.

Definition of a U.S. Person

For federal tax purposes, you are considered a U.S. person if you are: (1) an individual who is a U.S. citizen or U.S. resident alien; (2) a partnership, corporation, company, or association created or organized in the United States or under the laws of the United States; (3) an estate (other than a foreign estate); or (4) a domestic trust (as defined in Treasury Regulations section 301.7701-7).

Privacy Act Notice

Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA or Archer MSA or HSA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The IRS may also provide this information to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia and U.S. possessions to carry out their tax laws. The IRS may also disclose this information to other countries under a tax treaty, or to federal and state agencies to enforce federal non-tax criminal laws and to intelligence agencies to combat terrorism.

You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 28% of taxable interest, dividends, and certain other payments to a payee who does not give a TIN to a payer. The penalties described below may also apply.

 

i


How to Get a TIN

If you do not have a TIN, apply for one immediately. To apply for an SSN, obtain Form SS-5, Application for a Social Security Card, from your local Social Security Administration office or get this form on-line at www.ssa.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer Identification Number under Starting a Business. You can get Forms W-7 and SS-4 from the IRS by visiting www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

If you do not have a TIN, write “Applied For” in Part 1, sign and date the form, and give it to the requester. For interest and dividend payments and certain payments made with respect to readily tradable instruments, you will generally have 60 days to get a TIN and give it to the requester. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.

Note: Writing “Applied For” on the form means that you have already applied for a TIN OR that you intend to apply for one soon. As soon as you receive your TIN, complete another Substitute Form W-9, include your TIN, sign and date the form, and give it to the requester.

Guidelines for Determining the Proper Identification Number to Give the Requester

Social Security Numbers (“SSNs”) have nine digits separated by two hyphens: i.e., 000-00-0000. Employer Identification Numbers (“EINs”) have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the requester.

 

For this type of account:

   GIVE THE NAME AND
SOCIAL SECURITY
NUMBER OR
EMPLOYER
IDENTIFICATION
NUMBER OF—
      For this type of account:    GIVE THE NAME AND
EMPLOYER
IDENTIFICATION
NUMBER OF—

1.

 

Individual

  

The individual

   

6.

 

A valid trust, estate, or pension trust

  

Legal entity (4)

2.

 

Two or more individuals (joint account)

  

The actual owner of the account or, if combined funds, the first individual on the account (1)

   

7.

 

Corporation or LLC electing corporate status on Form 8832

  

The corporation

3.

 

Custodian account of a minor (Uniform Gift to Minors Act)

  

The minor (2)

   

8.

 

Association, club, religious, charitable, educational or other tax-exempt organization

  

The organization

4.

 

a. The usual revocable savings trust (grantor is also trustee)

  

The grantor-trustee (1)

   

9.

 

Partnership or multi-member LLC

  

The partnership or LLC

 

b. So-called trust account that is not a legal or valid trust under State law

  

The actual owner (1)

   

10.

 

A broker or registered nominee

  

The broker or nominee

5.

 

Sole proprietorship or single-owner LLC

  

The owner (3)

        

 

ii


 

(1)

List first and circle the name of the person whose SSN you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.

(2)

Circle the minor’s name and furnish the minor’s SSN.

(3)

You must show your individual name and you may also enter your business or “doing business as” name. You may use either your SSN or EIN (if you have one). If you are a sole proprietor, the Internal Revenue Service encourages you to use your SSN.

(4)

List first and circle the name of the legal trust, estate or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

NOTE: If no name is circled when more than one name is listed, the number will be considered to be that of the first name.

CAUTION: A disregarded domestic entity that has a foreign owner must use the appropriate Form W-8.

Payees Exempt from Backup Withholding

Individuals (including sole proprietors) are generally not exempt from backup withholding. Corporations are exempt from backup withholding for certain payments, such as interest and dividends.

Note: If you are exempt from backup withholding, you should still complete Substitute Form W-9 to avoid possible erroneous backup withholding. If you are exempt, enter your correct TIN in Part 1, check the “Exempt” box in Part 2, and sign and date the form. If you are a nonresident alien or a foreign entity not subject to backup withholding, give the requester the appropriate completed Form W-8.

The following is a list of payees that may be exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except for those listed in item (9). For broker transactions, payees listed in (1) through (13) and any person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments over $600 required to be reported and direct sales over $5,000 are generally exempt from backup withholding only if made to payees described in items (1) through (7). However, the following payments made to a corporation (including gross proceeds paid to an attorney under section 6045(f), even if the attorney is a corporation) and reportable on Form 1099-MISC are not exempt from backup withholding: (i) medical and health care payments, (ii) attorneys’ fees, and (iii) payments for services paid by a federal executive agency. Only payees described in items (1) through (5) are exempt from backup withholding for barter exchange transactions and patronage dividends.

(1)  An organization exempt from tax under section 501(a), or an individual retirement plan (“IRA”), or a custodial account under section 403(b)(7), if the account satisfies the requirements of section 401(f)(2).

(2)  The United States or any of its agencies or instrumentalities.

(3)  A state, the District of Columbia, a possession of the United States, or any of their subdivisions or instrumentalities.

(4)  A foreign government or any of its political subdivisions, agencies or instrumentalities.

(5)  An international organization or any of its agencies or instrumentalities.

(6)  A corporation.

(7)  A foreign central bank of issue.

 

iii


(8)  A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.

(9)  A futures commission merchant registered with the Commodity Futures Trading Commission.

(10)  A real estate investment trust.

(11)  An entity registered at all times during the tax year under the Investment Company Act of 1940.

(12)  A common trust fund operated by a bank under section 584(a).

(13)  A financial institution.

(14)  A middleman known in the investment community as a nominee or custodian.

(15)  A trust exempt from tax under Section 664 or described in Section 4947.

Exempt payees described above should file the Substitute Form W-9 to avoid possible erroneous backup withholding. If you are an exempt payee, you should furnish your taxpayer identification number, check the “exempt” box in part 2 on the face of the form in the space provided, sign and date the form and return it to the requester.

Penalties

Failure to Furnish TIN. If you fail to furnish your correct TIN to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

Civil Penalty for False Information with Respect to Withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

Criminal Penalty for Falsifying Information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

Misuse of TINs. If the payer discloses or uses TINs in violation of federal law, the payer may be subject to civil and criminal penalties.

FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX ADVISOR OR THE INTERNAL REVENUE SERVICE.

 

iv


Annex A

Guarantors

 

Guarantor    Jurisdiction of Incorporation or Organization

Anheuser-Busch InBev SA/NV

   Belgium

InBev Belgium SA/NV

   Belgium

Cobrew NV/SA

   Belgium

Anheuser-Busch Companies, Inc.

   Delaware

AB InBev France S.A.S.

   France

AmBrew S.A.

   Luxembourg

BrandBrew S.A.

   Luxembourg

Interbrew Central European Holding B.V.

   The Netherlands

Interbrew International B.V.

   The Netherlands

InBev Nederland N.V.

   The Netherlands

Nimbuspath Limited

   United Kingdom

EXHIBIT 99.2

Anheuser-Busch InBev Worldwide Inc.

Offer to Exchange up to

$1,500,000,000 3.000% Notes due 2012

$1,250,000,000 4.125% Notes due 2015

$2,250,000,000 5.375% Notes due 2020

$500,000,000 6.375% Notes due 2040

Which Have Been Registered Under the Securities Act of 1933

for

All Outstanding Unregistered

3.000% Notes due 2012

4.125% Notes due 2015

5.375% Notes due 2020

6.375% Notes due 2040

To DTC Participants:

We are enclosing herewith the materials listed below relating to the offers (each, an “Exchange Offer” and collectively, the “Exchange Offers”) by Anheuser-Busch InBev Worldwide Inc., a Delaware corporation (the “Company”), to exchange up to $1,500,000,000 aggregate principal amount of the Company’s 3.000% Notes due 2012 (the “New 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s 4.125% Notes due 2015 (the “New 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s 5.375% Notes due 2020 (the “New 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s 6.375% Notes due 2040 (the “New 2040 Notes” and together with the New 2012 Notes, the New 2015 Notes and the New 2020 Notes, the “New Notes”), each of which is unconditionally, fully and irrevocably guaranteed by the various guarantors listed on Annex A hereto (the “Guarantors”), and which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for, respectively, up to $1,500,000,000 aggregate principal amount of the Company’s 3.000% Notes due 2012 (the “Old 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s 4.125% Notes due 2015 (the “Old 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s 5.375% Notes due 2020 (the “Old 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s 6.375% Notes due 2040 (the “Old 2040 Notes” and together with the Old 2012 Notes, the Old 2015 Notes and the Old 2020 Notes, the “Old Notes”), each of which is unconditionally, fully and irrevocably guaranteed by the Guarantors, upon the terms and subject to the conditions set forth in the prospectus dated             , 2009 and the related Letter of Transmittal.

The Company has filed a registration statement, which became effective under the Securities Act on             , 2009, to register the New Notes under the Securities Act.

Enclosed herewith are copies of the following documents:

 

  1.

Prospectus dated             , 2009;

 

  2.

Letter of Transmittal;

 

  3.

Instruction to Registered Holder from Beneficial Owner; and

 

  4.

Letter to Clients, which may be sent to your clients for whose account you hold Old Notes in your name or in the name of your nominee, to accompany the instruction form referred to above, for obtaining such client’s instruction with regard to the Exchange Offers.

WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON             , 2009 UNLESS EXTENDED BY THE COMPANY.


The Exchange Offers are not conditioned upon any minimum number of Old Notes being tendered.

Pursuant to the Letter of Transmittal, each tendering holder of Old Notes (a “Holder”) will represent to the Company that (i) the New Notes to be acquired pursuant to the Exchange Offers will be acquired in the ordinary course of business of the person acquiring the New Notes, whether or not such person is the Holder, (ii) neither the Holder nor any person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers (if not a broker-dealer referred to in the last sentence of this paragraph) is participating or intends to participate in the distribution of the New Notes and none of them have any arrangement or understanding with any person to participate in the distribution of the New Notes, (iii) the Holder and each person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers acknowledge and agree that any broker-dealer or any person participating in the Exchange Offers for the purpose of distributing the New Notes (x) must comply with the registration and prospectus delivery requirements of the Securities Act, in connection with a secondary resale transaction of the New Notes acquired by such person, (y) cannot rely on the position of the staff of the Securities and Exchange Commission (the “Commission”) set forth in the Exxon Capital Holdings Corporation no-action letter (available May 13, 1988) and the Morgan Stanley and Co., Inc. no-action letter (available June 5, 1991), as interpreted in the Commission’s no-action letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters and (z) in the European Economic Area, will not make an offer or sale which will require the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (iv) the Holder and each person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers understand that a secondary resale transaction described in clause (iii) above should be covered by an effective registration statement, (v) neither the Holder nor any person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers is an “affiliate” of the Company, as defined under Rule 405 under the Securities Act, or if it is such an “affiliate”, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (vi) if the Holder is a broker-dealer, it did not purchase the Old Notes to be exchanged for New Notes from the Company or any of its affiliates, and it will acquire the New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making or other activities, (vii) neither the Holder nor any person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers is prohibited by any law or policy from participating in the Exchange Offers, (viii) the Holder and each person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers acknowledges and agrees that, if it is located in a member state of the European Economic Area which has implemented Directive 2003/71/ED (the “Prospectus Directive”), it is either (x) a legal entity authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or (y) a legal entity which has two or more of: (a) an average of at least 250 employees during the last financial year; (b) a total balance sheet of more than €43,000,000; and (c) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts and that, in each case, it will not make any offer which will require the Company to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (ix) the Holder and each person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers acknowledges and agrees that it is not located or resident in the United Kingdom or, if it is located or resident in the United Kingdom, it is a person falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or within Article 43(2) of the Order, or to whom this Letter or the accompanying Prospectus may lawfully be communicated in accordance with the order and (x) the Holder is not acting on behalf of any person who could not truthfully and completely make the representations contained in the forgoing subclauses (i) through (ix). If the Holder is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market making or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes received in respect of such Old Notes pursuant to the Exchange Offers; however, by so acknowledging and by delivering a prospectus, the Holder will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

 

2


The enclosed Instruction to Registered Holder from Beneficial Owner contains an authorization by beneficial owner of Old Notes held by you to make the foregoing representations and warranties on behalf of such beneficial owner.

The Company will not pay any fee or commission to any broker or dealer or to any other persons (other than the Exchange Agent for the Exchange Offers) in connection with the solicitation of tenders of Old Notes pursuant to the Exchange Offers. The Company will pay all transfer taxes, if any, applicable to the transfer and exchange of Old Notes pursuant to the Exchange Offers, except as otherwise provided in Instruction 7 of the enclosed Letter of Transmittal.

Any inquiries you may have relating to the procedure for tendering or withdrawing tenders may be addressed to, and additional copies of the enclosed materials may be obtained from, the Exchange Agent at:

Bank of New York Mellon Corporation

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, New York 10286

Attention: Carolle Montreuil

By Telephone: (212) 815-5920

By Facsimile: (212) 298-1915

All other questions regarding the Exchange Offers should be addressed to Robert Ottenstein at the Company at telephone number (212) 573-4365.

[ Remainder of page left intentionally blank; the signatures follow .]

 

3


Very truly yours,

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

By:

 

 

 

Name:

 
 

Title:

 

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.

 

4


Annex A

Guarantors

 

Guarantor    Jurisdiction of Incorporation or Organization

Anheuser-Busch InBev SA/NV

   Belgium

InBev Belgium SA/NV

   Belgium

Cobrew NV/SA

   Belgium

Anheuser-Busch Companies, Inc.

   Delaware

AB InBev France S.A.S.

   France

AmBrew S.A.

   Luxembourg

BrandBrew S.A.

   Luxembourg

Interbrew Central European Holding B.V.

   The Netherlands

Interbrew International B.V.

   The Netherlands

InBev Nederland N.V.

   The Netherlands

Nimbuspath Limited

   United Kingdom

EXHIBIT 99.3

Anheuser-Busch InBev Worldwide Inc.

Offer to Exchange up to

$1,500,000,000 3.000% Notes due 2012

$1,250,000,000 4.125% Notes due 2015

$2,250,000,000 5.375% Notes due 2020

$500,000,000 6.375% Notes due 2040

Which Have Been Registered Under the Securities Act of 1933

for

All Outstanding Unregistered

$1,500,000,000 3.000% Notes due 2012

$1,250,000,000 4.125% Notes due 2015

$2,250,000,000 5.375% Notes due 2020

$500,000,000 6.375% Notes due 2040

To Our Clients:

We are enclosing herewith (i) a prospectus dated             , 2009 of Anheuser-Busch InBev Worldwide Inc., a Delaware corporation (the “Company”) and the various guarantors listed on Annex A hereto (the “Guarantors”), (ii) a related Letter of Transmittal relating to the offers (each, an “Exchange Offer” and together, the “Exchange Offers”) by the Company to exchange up to $1,500,000,000 aggregate principal amount of the Company’s 3.000% Notes due 2012 (the “New 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s 4.125% Notes due 2015 (the “New 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s 5.375% Notes due 2020 (the “New 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s 6.375% Notes due 2040 (the “New 2040 Notes” and together with the New 2012 Notes, the New 2015 Notes and the New 2020 Notes, the “New Notes”), each of which is unconditionally, fully, and irrevocably guaranteed by the Guarantors, and which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for, respectively, up to $1,500,000,000 aggregate principal amount of the Company’s 3.000% Notes due 2012 (the “Old 2012 Notes”), $1,250,000,000 aggregate principal amount of the Company’s 4.125% Notes due 2015 (the “Old 2015 Notes”), $2,250,000,000 aggregate principal amount of the Company’s 5.375% Notes due 2020 (the “Old 2020 Notes”), and $500,000,000 aggregate principal amount of the Company’s 6.375% Notes due 2040 (the “Old 2040 Notes” and together with the Old 2012 Notes, the Old 2015 Notes and the Old 2020 Notes, the “Old Notes”), each of which is unconditionally, fully and irrevocably guaranteed by the Guarantors, upon the terms and subject to the conditions set forth in the Prospectus and Letter of Transmittal and (iii) an Instruction to Registered Holder from Beneficial Owner (the “Instruction Letter”).

The Company has filed a registration statement, which became effective under the Securities Act on             , 2009, to register the New Notes under the Securities Act.

PLEASE NOTE THAT EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [            ], 2009 UNLESS EXTENDED. THE EXCHANGE OFFERS ARE NOT CONDITIONED UPON ANY MINIMUM NUMBER OF OLD NOTES BEING TENDERED.

We are the holder of record of Old Notes for your account. A tender of such Old Notes can be made only by us as the record holder pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Old Notes held by us for your account.

We request instructions as to whether you wish to tender any or all of the Old Notes held by us for your account pursuant to the terms and conditions of the Exchange Offers. We also request that you confirm that we may make on your behalf the representations and warranties contained in the Letter of Transmittal. In this regard, please complete the enclosed Instruction Letter and return it to us as soon as practicable.


Pursuant to the Letter of Transmittal, each tendering holder of Old Notes (a “Holder”) will represent to the Company that (i) the New Notes to be acquired pursuant to the Exchange Offers will be acquired in the ordinary course of business of the person acquiring the New Notes, whether or not such person is the Holder, (ii) neither the Holder nor any person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers (if not a broker-dealer referred to in the last sentence of this paragraph) is participating or intends to participate in the distribution of the New Notes and none of them have any arrangement or understanding with any person to participate in the distribution of the New Notes, (iii) the Holder and each person receiving any new Notes directly or indirectly from the Holder pursuant to the Exchange Offers acknowledge and agree that any broker-dealer or any person participating in the Exchange Offers for the purpose of distributing the New Notes (x) must comply with the registration and prospectus delivery requirements of the Securities Act, in connection with a secondary resale transaction of the New Notes acquired by such person, (y) cannot rely on the position of the staff of the Securities and Exchange Commission (the “Commission”) set forth in the Exxon Capital Holdings Corporation no-action letter (available May 13, 1988) and the Morgan Stanley and Co., Inc. no-action letter (available June 5, 1991), as interpreted in the Commission’s no-action letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters and (z) in the European Economic Area, will not make an offer or sale which will require the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (iv) the Holder and each person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers understand that a secondary resale transaction described in clause (iii) above should be covered by an effective registration statement, (v) neither the Holder nor any person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers is an “affiliate” of the Company, as defined under Rule 405 under the Securities Act, or if it is such an “affiliate”, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (vi) if the Holder is a broker-dealer, it did not purchase the Old Notes to be exchanged for New Notes from either of the Company or any of its affiliates, and it will acquire the New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making or other activities, (vii) neither the Holder nor any person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers is prohibited by any law or policy from participating in the Exchange Offers, (viii) the Holder and each person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers acknowledges and agrees that, if it is located in a member state of the European Economic Area which has implemented Directive 2003/71/ED (the “Prospectus Directive”), it is either (x) a legal entity authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or (y) a legal entity which has two or more of: (a) an average of at least 250 employees during the last financial year; (b) a total balance sheet of more than €43,000,000; and (c) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts and that, in each case, it will not make any offer which will require the Company to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (ix) the Holder and each person receiving any New Notes directly or indirectly from the Holder pursuant to the Exchange Offers acknowledges and agrees that it is not located or resident in the United Kingdom or, if it is located or resident in the United Kingdom, it is a person falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or within Article 43(2) of the Order, or to whom this Letter or the accompanying Prospectus may lawfully be communicated in accordance with the order and (x) the Holder is not acting on behalf of any person who could not truthfully and completely make the representations contained in the forgoing subclauses (i) through (ix). If the Holder is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market making or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes received in respect of such Old Notes pursuant to the Exchange Offers; however, by so acknowledging and by delivering a prospectus, the Holder will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

 

Very truly yours,

[INSERT NAME OF DTC PARTICIPANT]

 

2


Annex A

Guarantors

 

Guarantor    Jurisdiction of Incorporation or Organization

Anheuser-Busch InBev SA/NV

   Belgium

InBev Belgium SA/NV

   Belgium

Cobrew NV/SA

   Belgium

Anheuser-Busch Companies, Inc.

   Delaware

AB InBev France S.A.S.

   France

AmBrew S.A.

   Luxembourg

BrandBrew S.A.

   Luxembourg

Interbrew Central European Holding B.V.

   The Netherlands

Interbrew International B.V.

   The Netherlands

InBev Nederland N.V.

   The Netherlands

Nimbuspath Limited

   United Kingdom

EXHIBIT 99.4

INSTRUCTION TO REGISTERED HOLDER

From Beneficial Owner

of

3.000% Notes due 2012,

4.125% Notes due 2015,

5.375% Notes due 2020, or

6.375% Notes due 2040

of

Anheuser-Busch InBev Worldwide Inc.

To DTC Participant:

The undersigned hereby acknowledges receipt of the prospectus dated             , 2009 (the “Prospectus”) of Anheuser-Busch InBev Worldwide Inc., a Delaware corporation (the “Company”), and the various guarantors listed on Annex A hereto (the “Guarantors”) that together constitute the Company’s offers (each, an “Exchange Offer” and collectively, the “Exchange Offers”) to exchange $2,000 principal amount and integral multiples of $1,000 in excess thereof of the Company’s 3.000% Notes due 2012 (the “New 2012 Notes”), the Company’s 4.125% Notes due 2015 (the “New 2015 Notes”), the Company’s 5.375% Notes due 2020 (the “New 2020 Notes”), and the Company’s 6.375% Notes due 2040 (the “New 2040 Notes” and together with the New 2012 Notes, the New 2015 Notes and the New 2020 Notes, the “New Notes”), each of which is unconditionally, fully and irrevocably guaranteed by the Guarantors, and which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for, respectively, each $2,000 principal amount and integral multiples of $1,000 in excess thereof of the Company’s outstanding 3.000% Notes due 2012 (the “Old 2012 Notes”), the Company’s outstanding 4.125% Notes due 2015 (the “Old 2015 Notes”), the Company’s outstanding 5.375% Notes due 2020 (the “Old 2020 Notes”) and the Company’s outstanding 6.375% Notes due 2040 (the “Old 2040 Notes” and together with the Old 2012 Notes, the Old 2015 Notes and the Old 2020 Notes, the “Old Notes”), each of which is unconditionally, fully and irrevocably guaranteed by the Guarantors. Capitalized terms used but not defined have the meanings assigned to them in the Prospectus.

The undersigned understands and agrees that the Company has filed a registration statement to register the New Notes under the Securities Act, and will not accept for exchange any Old Notes until the registration statement has become effective under the Securities Act.

This will instruct you as to the action to be taken by you relating to the Exchange Offer with respect to the Old Notes held by you for the account of the undersigned.

The aggregate face amount of the Old Notes held by you for the account of the undersigned is (fill in amount):

$            of Old 2012 Notes

$            of Old 2015 Notes

$            of Old 2020 Notes

$            of Old 2040 Notes

With respect to the Exchange Offers, the undersigned hereby instructs you (check one of the following boxes):

 

¨ To TENDER the following Old Notes held by you for the account of the undersigned (insert principal amount of Old Notes to be tendered (if any)):

$            of Old 2012 Notes

$            of Old 2015 Notes

$            of Old 2020 Notes

$            of Old 2040 Notes

or

 

¨ NOT to TENDER any Old Notes held by you for the account of the undersigned.


If the undersigned instructs you to tender Old Notes held by you for the account of the undersigned, it is understood that you are authorized to make on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations, warranties and agreements contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the New Notes to be acquired pursuant to the Exchange Offers will be acquired in the ordinary course of business of the person acquiring the New Notes, whether or not such person is the undersigned, (ii) neither the undersigned nor any person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers (if not a broker-dealer referred to in the last sentence of this paragraph) is participating or intends to participate in the distribution of the New Notes and none of them have any arrangement or understanding with any person to participate in the distribution of the New Notes, (iii) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers acknowledge and agree that any broker-dealer or any person participating in the Exchange Offers for the purpose of distributing the New Notes (x) must comply with the registration and prospectus delivery requirements of the Securities Act, in connection with a secondary resale transaction of the New Notes acquired by such person, (y) cannot rely on the position of the staff of the Securities and Exchange Commission (the “Commission”) set forth in the Exxon Capital Holdings Corporation no-action letter (available May 13, 1988) and the Morgan Stanley and Co., Inc. no-action letter (available June 5, 1991), as interpreted in the Commission’s no-action letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters and (z) in the European Economic Area, will not make an offer or sale which will require the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (iv) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers understand that a secondary resale transaction described in clause (iii) above should be covered by an effective registration statement, (v) neither the undersigned nor any person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers is an “affiliate” of the Company, as defined under Rule 405 under the Securities Act, or if it is such an “affiliate”, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (vi) if the undersigned is a broker-dealer, it did not purchase the Old Notes to be exchanged for New Notes from the Company or any of its affiliates, and it will acquire the New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making or other activities, (vii) neither the undersigned nor any person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers is prohibited by any law or policy from participating in the Exchange Offers, (viii) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers acknowledges and agrees that, if it is located in a member state of the European Economic Area which has implemented Directive 2003/71/ED (the “Prospectus Directive”), it is either (x) a legal entity authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or (y) a legal entity which has two or more of: (a) an average of at least 250 employees during the last financial year; (b) a total balance sheet of more than €43,000,000; and (c) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts and that, in each case, it will not make any offer which will require the Company to publish a prospectus pursuant to Article 3 of the Prospectus Directive, (ix) the undersigned and each person receiving any New Notes directly or indirectly from the undersigned pursuant to the Exchange Offers acknowledges and agrees that it is not located or resident in the United Kingdom or, if it is located or resident in the United Kingdom, it is a person falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or within Article 43(2) of the Order, or to whom this Letter or the accompanying Prospectus may lawfully be communicated in accordance with the order and (x) the undersigned is not acting on behalf of any person who could not truthfully and completely make the representations contained in the forgoing subclauses (i) through (ix). If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market making or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes received in respect of such Old Notes pursuant to the Exchange Offers; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

 

2


 

SIGN HERE

 

 

Signature(s) of Owner(s)

Date:

 

 

Name(s):

 

 

(Please Print)

Capacity (Full Title):

 

 

 

 

Address:

 

 

 

 

(Include Zip Code)

Area Code and Telephone Number:

 

 

Tax Identification or Social Security Number(s):

 

 

 

 

3


Annex A

Guarantors

 

Guarantor    Jurisdiction of Incorporation or Organization

Anheuser-Busch InBev SA/NV

   Belgium

InBev Belgium SA/NV

   Belgium

Cobrew NV/SA

   Belgium

Anheuser-Busch Companies, Inc.

   Delaware

AB InBev France S.A.S.

   France

AmBrew S.A.

   Luxembourg

BrandBrew S.A.

   Luxembourg

Interbrew Central European Holding B.V.

   The Netherlands

Interbrew International B.V.

   The Netherlands

InBev Nederland N.V.

   The Netherlands

Nimbuspath Limited

   United Kingdom

EXHIBIT 99.5

                    , 2009

EXCHANGE AGENT AGREEMENT

The Bank of New York Mellon Trust Company, N.A.

911 Washington Ave., 3rd Floor

St. Louis, Missouri 63101

Ladies and Gentlemen:

Anheuser-Busch InBev Worldwide Inc., a Delaware corporation (the “ Issuer ”) proposes to make offers (each, an “ Exchange Offer ” and collectively, the “ Exchange Offers ”) to exchange up to $1,500,000,000 of its outstanding 3.000% Notes due 2012, $1,250,000,000 of its outstanding 4.125% Notes due 2015, $2,250,000,000 of its outstanding 5.375% Notes due 2020 and $500,000,000 of its outstanding 6.375% Notes due 2040 (the “ Old Securities ”), for up to $1,500,000,000 of its 3.000% Notes due 2012, $1,250,000,000 of its 4.125% Notes due 2015, $2,250,000,000 of its 5.375% Notes due 2020 and $500,000,000 of its 6.375% Notes due 2040 (the “ New Securities ”), which have been registered under the Securities Act of 1933, as amended, respectively, and, in each case, are guaranteed by Anheuser-Busch InBev NV/SA, and various subsidiary guarantors. The terms and conditions of the Exchange Offers as currently contemplated are set forth in a prospectus, dated [ ], 2009 (the “ Prospectus ”), and a Letter of Transmittal (the “ Letter of Transmittal ”), copies of which are attached as Exhibit A to this Exchange Agent Agreement (the “Agreement”), both of which are proposed to be distributed to all record holders of the Old Securities. The Old Securities and the New Securities are collectively referred to herein as the “ Notes .”

The Issuer hereby appoints The Bank of New York Mellon Trust Company, N.A. to act as exchange agent (the “ Exchange Agent ”) in connection with each Exchange Offer. References hereinafter to “you” shall refer to The Bank of New York Mellon Trust Company, N.A.

Each Exchange Offer shall be commenced by the Issuer on or about [ ], 2009 (the “ Effective Time ”) and shall expire at [ ] p.m., New York City time, on [ ], 2009 or on such subsequent date or time to which the Issuer may extend such Exchange Offer (each, an “ Expiration Date ”). The Letter of Transmittal accompanying the Prospectus (or in the case of book entry securities, the Automated Tender Offer Program (“ ATOP ”) of the Book-Entry Transfer Facility (as defined below)) is to be used by the holders of the Old Securities to accept the related Exchange Offer and contains instructions with respect to the delivery of certificates for Old Securities tendered in connection therewith.

Subject to the terms and conditions set forth in the Prospectus, the Issuer expressly reserves the right to extend any Exchange Offer from time to time and may extend such Exchange Offer by giving oral (promptly confirmed in writing) or written notice to you before [ ] a.m., New York City time, on the business day following the previously scheduled Expiration Date.

The Issuer expressly reserves the right to amend an Exchange Offer or to delay acceptance of the Old Securities, or to terminate an Exchange Offer, and not to accept for exchange any Old Securities not theretofore accepted for exchange, if in the Issuer’s sole judgment, any of the conditions of an Exchange Offer specified in the Prospectus under the caption “The Exchange Offers—Terms of the Exchange Offers” shall not have been satisfied. The Issuer will give oral (promptly confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable.

In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions:

1. You will perform such duties and only such duties as are specifically set forth in the section of the Prospectus captioned “The Exchange Offers” or as specifically set forth herein; provided, however , that in no way will your general duty to act in good faith be discharged by the foregoing.


2. You will establish a book-entry account with respect to the Old Securities at The Depository Trust Company (the “ Book-Entry Transfer Facility ”) to facilitate book entry tenders through the Book-Entry Transfer Facility’s ATOP for purposes of each Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility’s systems may make book-entry delivery of the Old Securities by causing the Book-Entry Transfer Facility to transfer such Old Securities into your account in accordance with the Book-Entry Transfer Facility’s procedure for such transfer.

3. From and after the Effective Time, you are hereby authorized and directed to accept and to examine each of the Letters of Transmittal and confirmations of book-entry transfer into your account at the Book-Entry Transfer Facility and any other documents delivered or mailed to you by or for holders of the Old Securities to ascertain whether: (i) the Letters of Transmittal (or the instructions from the Book-Entry Transfer Facility (the “ Book-Entry Transfer Facility Transmissions ”)) contain the information required to be set forth therein and any such other documents are duly executed and properly completed in accordance with instructions set forth therein; (ii) the book-entry confirmations contain the information required to be set forth therein and (iii) the Old Securities have otherwise been properly tendered. In each case where the Letter of Transmittal or any other document has been improperly completed or executed (or any Book-Entry Transfer Facility Transmission is not in due and proper form or omits required information) or some other irregularity in connection with the acceptance of an Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all requirements and to take any other action as may be reasonably necessary or advisable, or reasonably requested by the Issuer, to cause such irregularity to be corrected. If such condition is not promptly remedied, you shall report such condition to the Issuer and await its direction. All questions as to the validity, form, eligibility (including timeliness of receipt), acceptance and withdrawal of any Old Securities tendered or delivered shall be determined by the Issuer, in its sole discretion; provided , however , that you shall reasonably cooperate with the Issuer in attempting to resolve all such questions.

4. With the approval of the Chief Executive Officer, President, Executive Vice President or any Vice President of the Issuer (such approval, if given orally, to be promptly confirmed in writing) or any other party designated in writing, by such an officer, you are authorized to waive any irregularities in connection with any tender of Old Securities pursuant to the applicable Exchange Offer.

5. Tenders of Old Securities may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned “The Exchange Offers—Procedures for Tendering,” and Old Securities or portions thereof shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein.

You are authorized to request that any person tendering Old Securities provide you with such additional documents as you or the Issuer deem appropriate. You are hereby authorized and directed to process withdrawals of tenders to the extent withdrawal thereof is authorized by the applicable Exchange Offer.

The Issuer reserves the absolute right (i) to reject any or all tenders of any particular Old Security determined by the Issuer not to be in proper form or the acceptance or exchange of which may, in the opinion of Issuer’s counsel, be unlawful and (ii) to waive any of the conditions of an Exchange Offer or any defects, irregularities or conditions to the tender of any particular Old Security, and the Issuer’s interpretation of the terms and conditions of such Exchange Offer (including the Letter of Transmittal and the instructions set forth therein) will be final and binding. With respect to the matters in (i) and (ii) above, you shall have no duty, responsibility or liability.

Notwithstanding the provisions of this Section 5, Old Securities which the Chief Executive Officer, President, Executive Vice President or any Vice President of the Issuer shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, shall be promptly confirmed in writing).

6. You shall advise the Issuer with respect to any Old Securities received subsequent to the Expiration Date and accept its instructions with respect to disposition of such Old Securities.


7. You shall accept tenders:

(a) in cases where the Old Securities are registered in two or more names only if signed by all named holders;

(b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and

(c) from persons other than the registered holder of Old Securities, provided that customary transfer requirements, including payment of any applicable transfer taxes, are fulfilled.

8. Upon satisfaction or waiver of all of the conditions to an Exchange Offer, the Issuer will notify you (such notice, if given orally, to be promptly confirmed in writing) of its acceptance, promptly after the applicable Expiration Date, of all related Old Securities properly tendered and you, on behalf of the Issuer, will exchange such Old Securities for New Securities of the corresponding series and cause such Old Securities to be cancelled. Delivery of New Securities will be made on behalf of the Issuer by you at the rate of $1,000 principal amount of New Securities for each $1,000 principal amount of the corresponding series of Old Securities tendered promptly after notice (such notice if given orally, to be promptly confirmed in writing) of acceptance of said Old Securities by the Issuer; provided, however, that in all cases, Old Securities tendered pursuant to an Exchange Offer will be exchanged only after timely receipt by you of confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees (or Book-Entry Transfer Facility Transmission) and, if applicable, any other documents required by the Issuer or by the terms of such Exchange Offer. You shall issue New Securities only in denominations of $2,000 or any $1,000 integral multiple thereof.

9. Tenders pursuant to an Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Old Securities tendered pursuant to an Exchange Offer may be withdrawn at any time prior to the applicable Expiration Date.

10. The Issuer shall not be required to exchange any Old Securities tendered if any of the conditions set forth in the related Exchange Offer are not met. Notice of any decision by the Issuer not to exchange any Old Securities tendered shall be given (if given orally, to be promptly confirmed in writing) by the Issuer to you.

11. If, pursuant to an Exchange Offer, the Issuer does not accept for exchange all or part of the Old Securities tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption “The Exchange Offers—Terms of the Exchange Offers” or otherwise, you shall as soon as practicable after the expiration or termination of such Exchange Offer effect appropriate book-entry transfer and return any related required documents that are in your possession, to the persons who deposited the Old Securities not accepted for exchange.

12. You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders.

13. As Exchange Agent hereunder you:

(a) shall not be liable for any action or omission to act unless the same constitutes your own gross negligence, willful misconduct or bad faith, and in no event shall you be liable to a securityholder, the Issuer or any third party for special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) arising in connection with this Agreement irrespective of whether you have been advised of the likelihood of such loss or damage and regardless of the form of action;

(b) shall have no duties or obligations other than those specifically set forth herein, or as may be subsequently agreed to in writing between you and the Issuer;


(c) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the Old Securities deposited with you pursuant to an Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of such Exchange Offer;

(d) shall not be obligated to take any legal action hereunder which might in your judgment involve any expense or liability, unless you shall have been furnished with indemnity reasonably satisfactory to you;

(e) may conclusively rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telegram or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed or presented by the proper person or persons;

(f) may act upon any tender, statement, request, document, agreement, certificate or other instrument whatsoever not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith believe to be genuine or to have been signed or presented by the proper person or persons;

(g) may conclusively rely on and shall be protected in acting upon written or oral instructions from any authorized officer of the Issuer;

(h) may consult with counsel of your selection with respect to any questions relating to your duties and responsibilities and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by you hereunder in good faith and in accordance with the advice or opinion of such counsel;

(i) shall in no event be responsible or liable for any failure or delay in the performance of your obligations under this Agreement arising out of or caused by, directly or indirectly, forces beyond your reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services; and

(j) shall not advise any person tendering Old Securities pursuant to such Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Old Securities and shall not solicit any holder or beneficial owner for the purpose of causing such holder or beneficial owner to tender such holder’s or beneficial owner’s Old Securities.

14. You shall take such action as may from time to time be requested by the Issuer (and such other action as you may deem appropriate) to furnish copies of the Prospectus and Letter of Transmittal or such other forms as may be approved from time to time by the Issuer, to all persons requesting such documents and to accept and comply with telephone, mail or facsimile requests for information relating to an Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) such Exchange Offer. The Issuer will furnish you with copies of such documents on your request. All other requests for information relating to an Exchange Offer shall be directed to the Issuer, Attention: [ ].

15. You shall advise by electronic communication to Benoit Loore, the VP Legal Corporate of the Issuer and Scott Gray, Director of the Issuer ( Benoit.Loore@ab-inbev.com and scott.gray@ab-inbev.com , respectively), and such other person or persons as the Issuer may request, daily (and more frequently during the week immediately preceding the Expiration Date if requested) up to and including the Expiration Date, as to the principal amount of Old Securities which have been tendered since the previous report and the aggregate principal amount tendered since the Effective Time pursuant to each Exchange Offer until the Expiration Date and the items received by you pursuant to this Agreement,


separately reporting and giving cumulative totals as to items properly received and items improperly received. In addition, you will also inform, and cooperate in making available to, the Issuer or any such other person or persons as the Issuer may request upon oral request made from time to time prior to the Expiration Date of such other information as they may reasonably request. Such cooperation shall include, without limitation, the granting by you to the Issuer and such person as the Issuer may request of access to those persons on your staff who are responsible for receiving tenders in order to ensure that immediately prior to the Expiration Date the Issuer shall have received information in sufficient detail to enable the Issuer to decide whether to extend an Exchange Offer. Within two business days after the Expiration Date, (i) you shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount of Old Securities tendered, the aggregate principal amount of Old Securities accepted, and (ii) you shall deliver said list to the Issuer.

16. Letters of Transmittal shall be stamped by you as to the date and, after the expiration of the applicable Exchange Offer, the time, of receipt thereof and, if defective, the date and time the last defect was cured or waived and shall be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of securities ( provided that you shall maintain such form of records of receipt as is customary for tenders through ATOP). You shall dispose of unused Letters of Transmittal and other surplus materials by returning them to the Issuer as soon as practicable.

17. For services rendered as Exchange Agent hereunder, you shall be entitled to such compensation as shall be agreed in writing between the Issuer and you. The provisions of this Section 17 shall survive the termination of this Agreement and your resignation or removal hereunder.

18. You hereby acknowledge receipt of the Prospectus and the Letter of Transmittal. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to your duties, liabilities and indemnification as Exchange Agent.

19. The Issuer covenants and agrees to fully indemnify and hold you harmless against any and all loss, liability, cost or expense, including reasonable attorneys’ fees and expenses, incurred without gross negligence or willful misconduct on your part, arising out of or in connection with any act, omission, delay or refusal made by you in reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document reasonably believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Old Securities believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Old Securities. In each case, the Issuer shall be notified by you, by letter or facsimile transmission, of the written assertion of a claim against you or of any other action commenced against you, promptly after you shall have received any such written assertion or shall have been served with a summons in connection therewith. The Issuer shall be entitled to participate at its own expense in the defense of any such claim or other action and, if the Issuer so elects, the Issuer shall assume the defense of any suit brought to enforce any such claim and you shall reasonably cooperate with the Issuer in the defense. In the event that the Issuer shall assume the defense of any such suit, the Issuer shall not be liable for the fees and expenses of any additional counsel thereafter retained by you, so long as the Issuer shall retain counsel satisfactory to you to defend such suit, and so long as you have not determined, in your reasonable judgment, that a conflict of interest exists between you and the Issuer. The provisions of this Section 19 shall survive the termination of this Agreement and your resignation or removal hereunder.

20. You shall arrange to comply with all requirements under the tax laws of the United States imposed with respect to the activities performed by you pursuant to this Agreement, including those relating to missing Tax Identification Numbers, and shall file any appropriate reports with the Internal Revenue Service. Any questions with respect to any tax matters relating to an Exchange Offer shall be referred to the Issuer, and you shall have no duty with respect to such matter; provided , that you shall reasonably cooperate with the Issuer in attempting to resolve such questions.


21. You shall deliver or cause to be delivered, in a timely manner to each governmental authority to which any transfer taxes are payable in respect of the exchange of Old Securities the Issuer’s check in the amount of all transfer taxes so payable; provided, however, that you shall reimburse the Issuer for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you.

22. This Agreement and your appointment as Exchange Agent hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of each of the parties hereto.

23. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same agreement.

24. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

25. This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally.

26. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party, addressed to it, at its address or telecopy number set forth below:

If to the Issuer:

Anheuser-Busch InBev Worldwide Inc.

1209 Orange Street

Wilmington, Delaware 19801

Telephone: (314) 577-2000

Facsimile: [ ]

Attention: General Counsel and Corporate Secretary

If to the Exchange Agent:

The Bank of New York Mellon Trust Company, N.A.

911 Washington Avenue, 3rd Floor

St. Louis, Missouri 63101

Facsimile: (314) 613-8227

Telephone: (314) 613-8202

Attention: Kerry McFarland, Vice President

27. Unless terminated earlier by the parties hereto, this Agreement shall terminate with respect to each Exchange Offer ninety (90) days following the Expiration Date of that Exchange Offer. Notwithstanding the foregoing, Sections 17 and 19 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Issuer any funds or property then held by you as Exchange Agent under this Agreement.

28. You may resign from your duties under this Agreement with respect to any or all Exchange Offers by giving to the Issuer thirty (30) days’ prior written notice, and the Issuer may terminate your appointment hereunder on five (5) days’ prior written notice. Any successor exchange agent appointed by the Issuer shall, upon such successor’s acceptance of such appointment, be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Exchange Agent without any further act or deed, but you shall deliver and transfer to the successor exchange agent, at the expense of the Issuer, any property at the time held by you hereunder and shall, upon payment of all amounts due and owing to you hereunder, execute and deliver, at the expense of the Issuer, any further


assurance, conveyance, act or deed necessary for such purpose as the Issuer may reasonably request. If an instrument of acceptance by a successor exchange agent shall not have been delivered to the Exchange Agent within thirty (30) days after the giving of such notice of removal or resignation, the Exchange Agent being removed or resigning may petition any court of competent jurisdiction for the appointment of a successor Exchange Agent. The Issuer will pay all reasonable expenses in connection with such petition.

29. You may not transfer or assign or delegate your rights or responsibilities under this Agreement without the prior written consent of the Issuer.

30. This Agreement shall be binding and effective as of the date hereof.

31. THE ISSUER AND YOU HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.


Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy.

 

ANHEUSER-BUSCH INBEV WORLDWIDE INC.

By:

 

 

 

Name:

 

Title:

 

Accepted as of the date first above written:

T HE  B ANK   OF  N EW  Y ORK  M ELLON  T RUST  C OMPANY , N.A.

as Exchange Agent

By:

 

 

 

Name:

 

Title:


Exhibit A

PROSPECTUS AND LETTER OF TRANSMITTAL