Canmaking plant sale could be part of A-B InBev ‘streamlining’

US beverage can plant operations run by Metal Container Corporation (MCC) could be sold as part of a streamlining of brewer Anheuser-Busch InBev’s (A-B InBev) business portfolio.

The world’s biggest brewer is reportedly working with Deutsche Bank on a deal to sell the remainder of the North American canmaking and bottle-making operations it acquired when it bought Anheuser-Busch in 2008.

A year later, A-B InBev sold four MCC plants to Ball Corporation in a deal worth US$577 million in return for a long-term supply contract. At the time MCC was running 11 can and end plants.

It is understood that the brewer is looking for a potential buyer of a minority stake or a joint venture for the US operations, which could be worth as much as $6 billion, although it is said not to be aiming for an outright sale. This is in line with recent moves by A-B InBev to make asset moves where it can lower its debt.

The $52bn A-B InBev merger in 2015 spurred a series of divestments and, following the $100bn purchase of rival SABMiller in 2016, the Belgium-based brewer was required by regulators to make a number of further divestments including its Australian business and a number of beer brands in Europe.

A-B InBev has since been looking at reducing its debt and recently raised funds with an IPO in China. The sale of its packaging business could be a way of reducing its interest charges as well as securing lower prices for its packaging in the long term at a time when costs have been rising.

The sale of MCC, which is based in St Louis, Missouri, would include five beverage can plants – at Arnold, Missouri; Jacksonville, Florida; Mira Loma, California; Newburgh, New York; and Windsor, Colorado, and end-making lines. Two of the plants – Jacksonville and Arnold – also have aluminium bottle lines, while Newburgh is one of the biggest beverage cans plants in the US with six production lines. 

In total, the capacity of the five plants is about 20bn, or about a fifth of the US beverage can market.

Most likely candidate to buy the plants would be Ball Corporation, but the Colorado-based canmaker has a dominant position in the US market with 16 of the plants in operation, compared with 10 for Crown, seven for Ardagh and the Rocky Mountain plant owned by a joint venture in Colorado. Any deal with Ball would therefore attract the attention of monopoly regulators.