Anheuser-Busch InBev has agreed a takeover deal of SABMiller to create world’s largest beer producer.
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The world’s biggest brewer Anheuser-Busch InBev said Wednesday it has reached a formal agreement on a mega-takeover of its nearest rival, Britain’s SABMiller, for US$121 billion including debt.
AB InBev has labeled this merger as an effort to “create a truly global brewer” – and a beer giant that still has more room to grow.
If given the green light, the tie-up would see the enlarged group own a stable of a few of the best-known beer brands, including AB InBev’s Budweiser, Corona and Stella Artois together with SABMiller’s Grolsch and Peroni. This is especially true with AB InBev eyeing about $1.4 billion in annual savings post-merger. In a conference call with reporters, Brito made note of the potential for growth on the continent, where the middle class is growing. St. Louis is A-B InBev’s USA headquarters.
“The geographic and product overlap of the two companies is very complimentary, Mr Brito said”. Once it goes through, one in every three beers sold worldwide will come from this megabrewer, which will be three times the size of Heineken, now No. 2 globally, and control about half of the industry’s profits.
It confirmed it will sell off SAB Miller’s United States joint venture, with partner Molson Coors agreeing to buy the remaining 58% stake in MillerCoors for 12 billion USA dollars (£7.9 billion). MillerCoors generates almost 30% of USA beer sales, while AB InBev already controls about 45% of the US market.
AB InBev’s lead advisers are investment bank Lazard and law firm Freshfields Bruckhaus Deringer.
The company will be listed in Belgium, with secondary listings in Johannesburg, Mexico and NY.
No details were disclosed about the makeup of the combined company’s executive roles, or if A-B InBev’s name will change following the merger.
Shares of SABMiller have been in a strong uptrend ever since the announcement of the deal.
However, in the US, the deal between the two will not make Budweiser and Miller share the same roof.
A-B InBev says the two have accepted the offer.
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Despite the regulatory hurdles, analysts are confident the deal will ultimately pass muster.
