A-B InBev shows rivals how to swing cost axe as activists circle

Anheuser-Busch InBev set a high bar for other consumer-product companies seeking to boost profitability through cost cuts as they try to keep activist investors at bay.

The world’s largest brewer said it’s generating profit-boosting savings from last year’s $104 billion takeover of rival SABMiller at a faster pace than expected, spearheading an efficiency drive by packaged-goods companies ranging from Nestle SA to Unilever to Procter & Gamble Co.

A-B InBev has led the industry’s drive to cut costs and consolidate under the guidance of 3G Capital, the investment firm whose partners back the maker of Stella Artois and Budweiser. The company’s approach to dealing with the food and drink industry’s stagnant sales has prompted alarm in executive suites, with activists Dan Loeb and Nelson Peltz taking aim at the sector.

The brewer cut $335 million of costs in the second quarter, part of an initiative that includes eliminating more than 5,500 jobs to capture $2.8 billion in savings from the SABMiller acquisition in the next three to four years.

A-B InBev has championed budgeting initiatives such as justifying every expense from scratch at the beginning of a new financial period.

Read more: Bloomberg

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