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Anheuser-Busch And Antarctica Announce Equity Stake Repurchase And New Budweiser Pact.

ST. LOUIS--(BUSINESS WIRE)--July 2, 1999--

Anheuser-Busch Companies, Inc. and Companhia Antarctica Paulista (Antarctica) today jointly announced the end of their equity partnership in Brazil, effective in the next 30 days.

Anheuser-Busch purchased a 5% ownership interest in Antarctica's primary operating subsidiary, ANEP, in 1996 with options to increase ownership to approximately 30% by 2002. CADE, Brazil's antitrust agency, approved the agreement in 1998, but required that the investment options be converted to mandatory investments by specified dates.

One of these fixed U.S. dollar CADE investment requirements comes due within ninety days, and is no longer viable for Anheuser-Busch. In the event of termination, the original partnership agreement calls for Antarctica to return Anheuser-Busch's original investment.

While CADE also required the companies to end their joint venture to produce, distribute and sell Budweiser in Brazil if the mandatory investments are not made, Anheuser-Busch and Antarctica announced they intend to transform the joint venture over the next ninety days into a contract production and distribution relationship, subject to CADE approval. Anheuser-Busch would independently arrange for marketing under this new relationship.

"Under the present circumstances, we cannot make the major investments mandated by CADE and, at the same time, meet the minimum financial returns required by our shareholders," said Jack H. Purnell, Chairman of Anheuser-Busch International, Inc. "We hope that a future association with our friends at Antarctica may be possible without adverse constraints. While this particular arrangement could not continue, Anheuser-Busch is still committed to being a long-term player in Brazil and will explore new avenues to that end."

"We regret that due to conditions out of our control, Anheuser- Busch had to leave our joint venture," said Victorio Carlos de Marchi, CEO of Grupo Antarctica. "We have had an excellent relationship and learned much from our partnership and its associated best practice exchange program. We plan on producing Budweiser beer and we will explore other, new collaborations with Anheuser-Busch in the future, subject to CADE's approval."

Antarctica, headquartered in Sao Paulo, produces the beer brand Antarctica, the seventh beer brand in volume of sales in the world. Its share in the Brazilian beer market is approximately 25% and in the Brazilian soft drinks market is 13%. Antartica's soft drink brand Guara Champage Antarctica is the sales leader in the non-cola soft drinks sector.

Anheuser-Busch, based in St. Louis, is the world's largest brewer and sold 99.8 million barrels (117.1 million hectoliters) in 1998. It holds an 8.6 percent share of the world beer market. Anheuser-Busch's Budweiser brand, the world's largest-selling beer, is sold in more than 80 countries around the world.
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Publication:Business Wire
Geographic Code:1USA
Date:Jul 2, 1999
Words:436
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