AB InBev is seeking to bolster growth by acquiring SABMiller’s brands in Africa and Asia as changing tastes and craft beers cut sales in developed markets. Crucially for ABI, the addition of SABMiller would give the world’s biggest brewer a strong presence in Africa, where it’s now only a bit player, and solidify its leadership in Latin America (where ABI already dominates markets like Brazil, Mexico and Argentina).
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The deal creates the world’s biggest brewing company by far, and combines most of the world’s biggest beer brands under the same roof.
As part of the deal, SABMiller will sell its stake in a venture with Molson Coors.
And then there’s Molson Coors Brewing (TAP), which inched 0.2% higher to a recent $88.47.
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”.
Mr. Brito said keeping SABMiller staff in Africa “is very important” because “they know the markets, the people and customers”. However, the deadline set by United Kingdom regulators to formalize the deal was pushed back multiple times as the brewers discussed the details. Though AB InBev got SABMiller’s main shareholders on board and lined up the largest-ever acquisition debt package, Erik Gordon, of the Ross School of Business at the University of MI, said the deal faces regulatory risks. Anheuser-Busch will also be paying 44 pounds $66.82) per share to gain a majority of the stock holding, according to Bloomberg.
AB InBev said it would seek a secondary listing and regional headquarters in Johannesburg.
“These guys have never failed in the past but this is a lot more hard, so we’ll see”, said Sanford C. Bernstein analyst Trevor Stirling.
SABMiller, which yesterday agreed to be acquired by rival Anheuser-Busch InBev, has posted first-half pre-tax profits of $2.3bn, down from $2.8bn a year earlier.
The acquisition is conditioned upon the closing of Anheuser Busch InBev’s (BUD) $106 billion acquisition of SABMiller, which is expected to close in the second half of 2016.
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The final agreement brings an end to months of negotiations between the two drink giants during which the takeover panel allowed for three extensions beyond its usual limit on mergers and acquisitions.
