If AB InBev can not get the green light from regulators for the deal or if its shareholders do not back the takeover, the brewer would have to pay SABMiller a break fee of three billion United States dollars (£2 billion).
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The new group would brew nearly a third of the world’s beer, combining AB InBev’s Budweiser, Stella Artois and Corona lagers with SABMiller’s Peroni, Grolsch and Pilsner Urquell.
The SABMiller board said it would give its blessing to a fifth proposal from its sole larger rival.
SABMiller rejected at least four other offers before provisionally accepting the offer which values SABMiller at 44 pounds (about $67) per share, 6 pounds (about $9) more than AB InBev’s first offer a month ago. Now, if this just-announced tie-up goes through, the new company will overwhelmingly take the top spot as the biggest brewer in the world, with a combined market share of 29%, according to estimates from research firm Euromonitor.
“We think that this is good value for (SABMiller)”, said Alicia Forry, an analyst at Canaccord Genuity.
“SAB did a great job playing poker and driving the price higher”, said Peter Braendle, who manages about $450 million in stocks, including SABMiller and AB InBev, at Zuercher Kantonalbank in Zurich.
InBev has accused its rival’s board of failing to engage meaningfully in negotiations, but the latter has argued that the previous offers undervalues the company. SABMiller’s two biggest shareholders, Marlboro owner Altria and Colombia’s BevCo would get both cash and shares for their combined 41 percent stake.
The partial-share alternative brings the total SABMiller valuation down to £68 billion, or $104.58 billion.
In order to firm up its business, SABMiller earlier this year bought London-based craft beer company Meantime for an undisclosed sum, as big players in a saturated beer market eye opportunities in the fast-growing segment.
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While AB InBev boss Carlos Brito has not ruled out going hostile, the company has said it prefers a friendly deal. “There can be no certainty that a formal offer will be made”. Nevertheless, a few of its shareholders are apparently convinced by its arguments: South Africa’s Public Investment Corp., Aberdeen Asset Management and Kulczyk Holding, which together own 6 or 7% of SABMiller’s shares outstanding, have all come out in support of SABMiller’s rejection of the offer.
