Earlier this month AB InBev and SABMiller confirmed a tie-up is being explored, with AB InBev informing SABMiller it intends to make a proposal to acquire the company.
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Belgian brewer Anheuser-Busch InBev is believed to be close to making a formal bid for London-listed SABMiller by this week, which would create a giant entity valued at around £180bn and holding over 400 brands. However, the company added that it had not yet received any proposal and has no further details about the terms of any such proposal. According to Reuters, the first bid could be made as early as 28 September (Monday). Its biggest brands include Budweiser, Beck’s and Stella Artois. The shares have underperformed the S&P 500 by 2.89% during the past week but Anheuser-Busch Inbev SA (NYSE:BUD) has outperformed the index in 4 weeks by 2.62%.
The stock has a market capitalization of $169.07 billion and a PE ratio of 18.29.
Anheuser InBev’s buyout of SABMiller has been a matter of speculation for some time now but could not materialise due to the debt burden of Anheuser InBev which it took to finance multiple mergers and acquisitions in the last few years.
Vodafone Group Plc slumped 3.9% to 209.05 pence after the U.K.-based mobile telecom services provider said discussions with privately held mobile services provider Liberty Global Plc has ended after two companies could not agree on price. Given the global presence both the companies have, they will have to get regulatory clearances from all associated authorities as well.
The merged entity would have annual sales of $73.3bn, making it three times more than competitor Heineken, reported The Associated Press.
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Given the size of both companies, it is expected that AB InBev will have to sell several assets in order to comply with anti-trust rules, which could see it sacrifice a few of its market share in China. SABMiller dominates the beer industry in Africa and Latin America with over 30% of its revenues coming from there led mainly by South Africa in the last fiscal year. SABMiller, the maker of Peroni and Grolsch, is said to be playing hardball with AB InBev over price, but is not unreceptive to a deal.
