To ease concerns the brewing behemoth might get a stranglehold of the US market, SABMiller will sell its 58 per cent stake in a venture with fellow brewer Molson Coors for $12 billion.
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The acquisition, which will create the world’s largest brewer, is expected to strengthen AB InBev’s position in key emerging regions with strong growth prospects such as Asia, Central and South America, and Africa.
On the day of the agreement in principle it was worth £39.03 but AB InBev stock has since rallied, taking the value of the unlisted stock and cash offer close to the £44 value of the all-cash offer.
AB InBev was known for producing beers like Budweiser, Stella Artois, Labatt, and Goose Island; SABMiller was known for Miller, Foster’s, Blue Moon, Peroni, and many others.
Anheuser-Busch InBev has concurred the terms of its £71bn takeover of SABMiller, in an arrangement that will unite the world’s two biggest beer producers.
“SABMiller has an unmatched footprint in fast-growing developing markets, underpinned by our portfolio of iconic national and global brands”, SABMiller chairman Jan du Plessis said.
It hopes to make savings of at least $1.4bn (£924 million) a year from the combined group, which is likely to stoke fears of job cuts. The combined entity will hold a significant presence in the global beer market as the largest beer company in the world with about a 30% market share, and the deal is one of the biggest in corporate history.
The merged company will be listed in Brussels, Mexico and Johannesburg.
Molson Coors will almost double its size once it completes a US$12-billion purchase that secures full ownership of its USA beer business and gains worldwide control of the Miller brand name.
Richmond-based Altria Group said Wednesday it supports Anheuser-Busch InBev’s plans to buy SABMiller plc for $107 billion. “MillerCoors represented the biggest antitrust hurdle to the merger, analysts have said, though SABMiller’s stake in China’s CR Snow may also need to be sold”. 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.
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In a statement, AB InBev said the deal “would create a truly global brewer, drawing on a similar heritage and shared passion for brewing and commitment to quality”. To achieve those benefits, the brewers said they may have to “implement certain restructurings or reorganizations”, without being more specific. If the deal is rejected, the Belgian company will have to pay a fine of 3 billion dollars, according to NU.
