SABMiller plc (ADR) (SBMRY)/Anheuser Busch Inbev SA (ADR) (BUD) Deal – Intangible Perspective

Both companies are two of the most profitable and efficient companies in the sub-industry. Anheuser Busch Inbev SA (ADR) (NYSE:BUD) has the highest gross margins at 58.1% and SABMiller plc (ADR) (OTCMKTS:SBMRY) has the third highest gross margins at 50%. They account for the two highest EBITDA margins by a decently wide margin and both companies manage to squeeze out a 21% net profit margin as the rest of the sub-industry only manages to average a 6% profit margin. Anheuser-Busch InBev and SABMiller’s employees are the most productive in the sub-industry according to earnings per employee.

Intangible-Adjusted Operating Profile

These two companies are also great churning out cash flow. They have the second and third best operating cash flow margin as well as the second and third best free cash flow margin in the sub-industry. They use their cash flow to reward shareholders. They have the highest and second highest equity payout ratio in the sub-industry at 40% for Anheuser-Busch InBev and 29% for SABMiller, respectively.

Intangible-Adjusted Cash Flow Profile

Finally, they both utilize their capital more productively than their competitors. They have the highest ROE and ROIC in the sub-industry.

Intangible-Adjusted Profitability Profile

From an intangible-adjusted perspective, the combined entity of SABMiller and Anheuser-Busch InBev looks to be on very solid footing to continue to gain market share in the brewer sub-industry.

Disclosure: None