A week ago, AB InBev and SABMiller received US regulatory approval for their $107 billion merger, which moved what would be the biggest-ever consumer products deal, creating a brewer with almost 30% of the global market, closer to concluding.
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Anheuser-Busch InBev (NYSE:BUD) raised its bid for rival brewer SABMiller in an attempt to quash investor dissent. The Leuven, Belgium-based company designed the alternative offer as a way to reduce taxes for Altria and Bevco.
But SABMiller shareholder Aberdeen Asset Management immediately poured cold water on the improved offer, calling it “unacceptable” and maintaining that it undervalues the company while continuing to favour SABMiller’s two major investors. This is because of the two main reasons.
At last week’s annual general meeting, several shareholders voiced concerns that the cash deal had become less attractive and was below a share-and-cash alternative.
SABMiller shareholders will receive 45 pounds a share in cash, 1 pound more than the prior offer, valuing the company at 79 billion pounds ($103.6 billion), AB InBev said in a statement Tuesday.
It added that the chairmen from both of the brewers met to talk on Friday, but they did not discuss any terms of the current deal.
In a statement SABMiller said it “notes” the announcement by AB InBev.
That value doesn’t include a discount for the fact that the stock issued in the deal can’t be traded for five years, AB InBev said. The sweetened deal now values SABMiller at around £79bn, up from £70bn previously. The activist investors Elliott Management and the Children’s Investment Fund have taken stakes in SABMiller, and Elliott was among investors that sought a higher price.
Aberdeen wants tobacco firm Altria and Colombia’s Santo Domingo family, which own about 40 percent of SAB, to be excluded from voting on the all-cash offer.
The pound contracted following the vote on June 23 by Britain to exit the European Union. AB InBev rose 0.5 percent to 115.40 euros.
According to Time, beer insiders have stated that the merging of the two giants will impact the small companies. But the brewers are waiting for final approval from Chinese regulators and global shareholders.
This agreement is precarious to AB InBev’s growth.
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The deal is expected to boost world-leader AB InBev’s prospects in developing markets in Africa and China.
