In practical terms, it means Molson Coors will gain full ownership of Miller brands outside of the USA (including the global Miller brand itself), and will retain rights to MillerCoors brands in the US.
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Anheuser-Busch InBev (ABI) has agreed to acquire archrival SABMiller for £71 billion ($107b), but the newly-formed brewing behemoth will be competing against the Miller portfolio in the USA market.
Given the largely complementary geographical footprints and brand portfolios of AB InBev and SABMiller, the Combined Group would have operations in virtually every major beer market, and provide more choices for beer drinkers, including global and local brands, in new and existing markets around the world.
Beer consumption there will grow by more than anywhere else over the next five years, according to industry experts Plato Logic. The Budweiser maker plans to slash annual costs by $1.4 billion, one third of which will come from overlapping head-office roles.
AB Inbev still has to get the take over past the competition authorities. Borrowing to fund the takeover may bring AB InBev’s net debt to 4.5 times earnings before interest, taxes, depreciation and amortisation, according to Trevor Stirling of Sanford C. Bernstein.
Anheuser-Busch InBev and SABMiller agreed to merge today in a $105 billion cash-and-stock deal completed with a 5 p.m. UK Takeover Panel deadline looming.
The enlarged AB InBev – which does not have a name yet – will also need to address regulatory issues in China, which drinks a quarter of the world’s beer.
The deal will also see SABMiller’s listing on the London Stock Exchange cancelled with AB Inbev promising to list its shares in Johannesburg and Mexico alongside the group’s current Euronext listing. The SABMiller proposal is an acquisition partly borne out of necessity, with AB InBev’s growth set to slow over the next five years, estimates compiled by Bloomberg show. The total transaction is valued at 12 billion United States dollars and is conditional on the completion of AB InBev’s previously announced acquisition of SABMiller. These include satisfying worldwide brewers who have large stakes in the SABMiller company.
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Both companies expect much regulatory scrutiny, so to make the whole thing look as kosher as possible, they’ve already ironed out a side deal to sell SABMiller’s 58 percent stake in MillerCoors to Molson Coors.
