AB InBev, the world’s largest beer company, owns Budweiser among many other brands.
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In the past 12 months, there have been more than a dozen craft-beer mergers and acquisitions by larger breweries, including the US-based 10 Barrel, Blue Point, Elysian, and Goose Island by AB InBev; and the UK-based Meantime by SABMiller.
Analysts have raised concerns that the companies might be forced to make a similar concession to regulators in China, where SABMiller holds a 49 percent stake in a joint venture that owns Snow, China’s best-selling beer brand. Through the deal, Molson Coors Brewing Company(NYSE:TAP) will retain rights to using the Miller brand name for their sales in the US.
“We are excited to create a truly global brewer and one of the world’s leading consumer products companies, drawing on a similar heritage and shared passion for brewing and commitment to quality”, Anheuser-Busch wrote in a letter to Congress.
Carlos Brito, chief executive of AB InBev said the company would be looking to make $1.4bn of savings, including almost $500m from streamlining “corporate headquarters overlap” but would not comment on whether that means SAB Miller will lose its United Kingdom headquarters in Mayfair. The deal is expected to complete in the second half of 2016.
“The boards of Anheuser-Busch InBev and SABMiller are pleased to announce that they have reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of SABMiller by AB InBev”, the pair said.
The formal offer by AB InBev comes after weeks of back and forth between the two companies. Brito declined to estimate the combined company’s global market share following the sale of MillerCoors, saying that most of its business “is done through local brands”. Anheuser-Busch rose 1% to a recent $119.58, while SABMiller’s London-traded shares, which have already popped sharply since mid-September, rose nearly 2% today.
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“SABMiller has been an excellent partner for the past seven years and we are extremely proud of the organization that our teams have created”, said Mark Hunter, president and CEO of Molson Coors. AB InBev will pay £44 (US$66.70) a-share of SABMiller in the takeover deal.
