An agreement was made once Anheuser-Busch agreed to sell the company’s USA interest of MillerCoors, 58%, to Molson Coors (NYSE:TAP) in a deal valued at $12 billion.
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It would also gain a stronger hold in “key emerging regions with strong growth prospects, such as Asia, Central and South America, and Africa”, according to the companies.
After weeks of deadline extensions, Anheuser-Busch InBev has formalized its takeover offer of SABMiller, which AB InBev will buy for $105.5 billion upon divestitures and regulatory approval.
If given the green light, the tie-up would see the enlarged group own a stable of brands including AB InBev’s Budweiser, Corona and Stella Artois together with SAB’s Grolsch and Peroni.
Carlos Brito, chief executive of Belgium-based AB InBev said: “This combination would create the first truly global brewer”.
Beer maker Anheuser-Busch InBev on Wednesday formalized a deal to purchase its rival SABMiller for $107 billion.
MillerCoors was created in 2008 as a joint venture in the United States by SABMiller and Molson Coors, with Molson Coors now holding a 42% stake.
The deal will also allow Molson to once again sell Miller Genuine Draft and Miller Lite in Canada.
Africa’s global beer volume is expected to grow 44% between 2014 and 2025, compared to the 16% global rate over that period, AB InBev said.
Last month, Labatt grabbed a larger stake in the craft beer market when it bought up Mill Street Brewery in Toronto for an undisclosed amount, its sixth acquisition of a North American craft brewer since 2011.
The divestiture, which is contingent on the completion of AB InBev’s acquisition of SABMiller, would catapult Molson into the position of the No. 2 brewer in the U.S., with a 25 percent market share second only to AB InBev’s 45 percent share.
Naturally, shareholders can expect the deal will be closely examined by relevant regulatory bodies as the combined entity could potentially abuse its market leading dominance, resulting in increased prices for consumers.
Shedding MillerCoors from the portfolio, however, is still no guarantee that the DOJ will approve the deal.
“I don’t think this changes a whole lot for the USA or Canadian beer drinker, at least not initially”, said Fleck.
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“This will make it more than three times bigger than its nearest rival, Heineken with 9 percent”, he said.
