Anheuser-Busch InBev NV or AB InBev (BUD,AHBIF.PK) said that it welcomed the statement from SABMiller plc (SBMRY.PK, SAB.L) that its board intends to recommend the revised and final terms of the proposed combination announced by AB InBev on 26 July 2016.
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But major SABMiller shareholders then signaled they favored AB InBev’s sweetened bid, which received a further boost Friday by getting regulatory clearance from China, the last major antitrust hurdle after it was approved in the USA and South Africa in recent weeks.
AB InBev made a decision to increase its takeover bid from 44 to 45 pounds per share, to compensate SABMiller’s shareholders for the weakened British pound, fallout from the Brexit.
The timetable announcement marks a renewed, optimistic approach to the tie-up.
Jan du Plessis, Chairman of SABMiller noted: “The board’s decision was hard given changes in circumstances since the board originally recommended £44 per share in cash last November”.
The top two shareholders, USA tobacco company Altria and investment firm BevCo, had arranged for the special offer as they were willing to remain invested in the new entity. On Friday, the London-based hedge fund, Marshall Wace LLP, which controls more than 1% of SABMiller’s stock, announced that it is in favor of the new proposal. Only last week, it seemed the merger was on the verge of being cancelled. According to the world’s largest brewer, this agreement is dependent on AB InBev buying out SABMiller, and is anticipated to finalize in conjunction with this merger.
Meanwhile, the merger is racking up approvals from worldwide regulators.
The deal had been first agreed last October as I reported here to create the world’s largest beer firm, producing about 30% of the world’s beer, and the initial news had caused the obligatory scampering/front-running to buy GBP.
“Now that the regulatory pre-conditions are satisfied, the board and management will continue to work constructively with AB InBev to bring about successful completion of the transaction as soon as possible”.
China Resources Beer now holds a 51% stake in China Resources Snow Breweries. This was not an easy task for the maker of Bud light and Budweiser.
Part of the approval process includes a complex set of divestments around the globe. On average, equities analysts expect that Anheuser Busch Inbev SA will post $3.67 EPS for the current fiscal year. During the period, its shipment unexpectedly dropped 1.7%.
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Anheuser Busch Inbev SA (NYSE:BUD) has received an average recommendation of “Buy” from the nineteen ratings firms that are now covering the stock.
