Carlsberg Brewery Malaysia Berhad Proposes Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPTs)

Key Highlights from the Circular to Shareholders

• Mandate Renewal: Carlsberg Brewery Malaysia Berhad (“CBMB”) is seeking shareholder approval to renew the mandate allowing the Group to enter into recurrent related party transactions (RRPTs) of a revenue or trading nature with related parties.
• AGM Details: The resolution will be tabled at the 56th Annual General Meeting (AGM), scheduled for Tuesday, 5 May 2026, 10.00 a.m. at the Nexus, Connexion Conference & Event Centre, Kuala Lumpur.
• Scope of Mandate: The mandate covers transactions including royalty payments and receipts, sale and purchase of goods and services, and administrative support services, primarily with Carlsberg Breweries A/S (“CBAS”) Group of Companies and associated entities.
• Estimated Transaction Values: The estimated value of the various categories of transactions for the period from the next AGM in 2026 to the subsequent AGM in 2027 ranges from RM1 million to RM60 million for each category of transaction.
• Shareholding Structure: CBAS is the immediate holding company with a 51% stake in CBMB. Carlsberg A/S (CAS) is the ultimate holding company, and Carlsberg Foundation (CF) exerts control over CAS.

Details of the Proposed Shareholders’ Mandate

The Circular outlines that the Group regularly enters into RRPTs with related parties as part of its normal business operations. These transactions include:

• Royalties Payable: Estimated at RM40-60 million annually for the exclusive use of trademark licences and technical/commercial assistance.
• Royalties Receivable: Estimated at RM1-10 million.
• Sale & Supply of Goods: Estimated at RM5-60 million to CBAS Group of Companies.
• Purchase of Beverages: Estimated at RM20-60 million from CBAS Group of Companies.
• Administrative Support Services Fees (Payable): Estimated at RM20-60 million.
• Administrative Support Services Fees (Receivable): Estimated at RM1-10 million.
• Sale/Purchase of Materials, Machinery, Spares, Assets, and Related Services: Estimated at RM5-30 million.

These transactions are deemed essential for CBMB’s day-to-day operations and will occur on an arm’s length basis, ensuring terms are not more favourable to related parties than those available to the public and are not detrimental to minority shareholders.

Governance and Review Procedures

• CBMB has robust internal procedures to ensure these transactions are conducted at arm’s length, in line with industry norms and transfer pricing standards.
• Transactions above RM1 million require review and approval from the Audit Committee (AC) and Board of Directors, while those below RM1 million may be approved by the Managing Director or Management team.
• The Internal Audit Department reviews all RRPTs at least annually to ensure compliance and proper disclosure.
• If any Director or AC member has an interest in the transaction, they are required to abstain from decision-making.

Interests of Directors and Major Shareholders

• Key directors (Stefano Clini, João Miguel Ventura Rego Abecasis, Alan Choi, Pauline Lim Maan Heong) are nominees/representatives of CBAS and are considered interested parties. They will abstain from voting or deliberating on the mandate, and CBAS as the major shareholder will also abstain from voting.
• No other directors or major shareholders are deemed interested in the mandate.

Potential Price-Sensitive and Share Value Impacting Factors

• Continuity of Strategic Relationships: The renewal of the mandate ensures that CBMB can maintain and expand its operational and commercial ties within the Carlsberg Group, which could influence future earnings consistency and operational efficiency.
• Transaction Scale: The disclosed annual RRPT values (some up to RM60 million) represent a material portion of CBMB’s operational expenses and revenue streams. Any changes, disruptions, or non-renewal could materially affect the Group’s financials.
• Compliance and Corporate Governance: The detailed processes and audit oversight described may reassure investors and mitigate concerns about potential conflicts of interest or unfair related party dealings.
• Shareholder Approval Risk: The renewal is subject to shareholder approval at the AGM. A failure to secure renewal could disrupt the Group’s business relationships and supply chains, potentially impacting share value.

Additional Information for Shareholders

• There are no material contracts or litigation, claims, or arbitration proceedings affecting CBMB or its subsidiaries, other than those in the normal course of business.
• Supporting documents, including the company’s Constitution and latest audited financial statements, are available for inspection at the registered office.
• Shareholders are reminded to submit proxy forms or electronic proxies if unable to attend the AGM in person.

Conclusion and Board Recommendation

The Board (excluding interested directors) recommends that shareholders vote in favour of the proposed renewal, citing its alignment with the best interests of the company and its shareholders.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, hold, or sell any securities. Investors are advised to conduct their own due diligence and consult with professional advisors before making investment decisions. The information is based on the company’s Circular to Shareholders and is current as of the date of publication. Future developments may affect the relevance and accuracy of the information provided.

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