We know they sold these because they have huge debt to repay, not because they were not profitable. They borrowered 45 billion and this sale netted 577 million so that’s a whopping 2% of that borrowered amount. So in more lay mens terms if I have a $25,000 credit card balance and I make a $500 principal payment I still owe $24,500.00, not much of a dent or much of a interest savings either.
So my point is where is the rest of this HUGE amount going to come from, that’s what makes me nervous.

By my mathe InBev still needs to come up with about 3.8 Billion in divestiture sales to meet thier obligations as part of the AB buy out. InBev has some 11 european breweries up for sale and so far no takers. Little no no interest in Busch Entertainment so where will the money come from??? If a company offered the right price for additional MCC Lid & Can Plants I think AB/InBev would jump on it. Not that they want to but they are running out of options.

I’ve always heard Ball is a great company that parallels MCC in many ways. It’s no real surprise to me that Ball has offered everyone to stay on after the sale is completed. MCC is the bench mark when it comes to cost per thousand, safety and many other areas. That only happened because of the people and the culture in those plants. So it really is the only smart option Ball had. To do anything else would be disasterous for them.

SoCal,

You heard right about Ball! Having been with them as they purchased US Can (aerosol) and some plastics plants from Alcan, they focus on keeping as many people at the plants as possible.

This only makes sense as Ball hardly has a ready-made set of employees they can send into those locations!

For anyone reading this that work at FTA, Columbus, Rome or Gainesville, welcome to the family!

Forgot to mention this. If InBev has no plans to sell the remaining can & lid plants then why did they have potential buyers touring the west coast plants prior to the sale? Just another reason to support my thought that the remaining MCC plants are still for sale regardless of what the press release states.

BallITguy, where are you located?

So if Inbev sells the remaining plants they still have to pay for the cans. Why would someone buy plants that sell to the “parent” company and then have to deal with Brito and his penny pinching ways and have him threaten to go elsewhere if they don’t do it cheaper and if he does go elsewhere they are left holding a plant that has no one to sell to? Not being sarcastic or any thing just wondering.
Still believe Inbev over paid.
The amount they got for this transaction is still just a drop in the bucket of what they owe.

Ball Inc. had just sold its soul to the devil-If Britto and In-Vest Bev don’t get their cans from Ball cheap,cheap,cheap you can bet your last wooden nickle they will go some place else for the cans.

SteveM, Correct me if I am wrong but I don’t think ABInbev makes soft drinks, the plants they sold mainly make soft drink containers so I don’t think ABI will be buying much of their product.

This seems odd…and maybe someone more knowledgeable than me can explain this. Aren’t most manufacturers vertically integrating these days in order to have more control over the price of the factors of production?

Selling off assets seems like a short-term gain to me.

jr, you are correct as I see it, it is simply a short term gain. I don’t know what those companies added to the bottom line each year but in the long run that profit is gone and the 577 million gained went directly to the debt. That debt repayment is only 2% of what is actually owed, so the reduction and net decrease in interest expense is not much.
My guess is that in the loan agreement signed with the bank stated certain assets HAD to be sold.

These can plants provided a reliable and efficient supply of aluminum cans to the breweries and also sold to various soft drink manufacturers. They were profitable on their own. Although InBev can now throw this money at the debt, they have lost yet another revenue source. Each time they sell a valuable asset, they lose a stream of revenue. Also, the can plants were originally set up so that A-B would not be vulnerable to the price fixing and arm twisting tactics of the aluminum manufacturers. (We will just make our own). Personally, I hope Ball keeps all the employees and then turns around and jacks up the can prices to InBev.