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Brewer AB InBev buys rival SABMiller for $121bn

It was confirmed in regulatory filings on Wednesday that AB InBev is shelling out $108 billion for its biggest American beer rival after months of back-and-forth.

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As part of that deal, SABMiller has agreed to sell its 58 percent share in the MillerCoors LLC joint venture to its partner, Molson Coors Brewing Co., which holds the remaining stake, as well as the Miller portfolio outside the United States for $12 billion.

“We have a deep passion for and understanding of the MillerCoors brands, strategy and culture and believe this transaction is the ideal outcome for this business”, Mark Hunter, president of Molson Coors, said in a statement.

The real issue is what this massive beer-making entity plans to call itself. In the running are Monopolager, MegaKega, and Beerhemouth.

As reported by Reuters, the offer by the world’s biggest brewery also comes with an offer to sell SABMiller’s stake in the us venture MillerCoors that will help win regulatory approval. The takeover would more than double Molson Coors’ revenue, which was $4.15 billion previous year, and add $1 billion in earnings before interest, taxes, depreciation and amortization.

As a result, AB InBev will probably pay £69.8 billion, or about $105 billion. The closing of the transaction will make Molson second largest brewer in the USA, with a 25% market share second only to AB InBev’s 45% share.

To many in the craft beer industry, it looks like AB InBev is trying to swallow as much market share as it can, with the acquisition of both brands and distribution channels – including the purchases of two Bay Area beer distributors earlier this fall. “Research shows the less players there are in a particular market, the higher profit, and I think that’s where AB InBev and SABMiller are going with this”.

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If given the green light, the tie-up would see the enlarged group own a stable of a few of the best-known beer brands, including AB InBev’s Budweiser, Corona and Stella Artois together with SABMiller’s Grolsch and Peroni. Molson Coors Brewing Co is leading the race for acquiring the SABMiller’s stake in Miller Coors from the days of merger negotiations between AB InBev and SABMiller began in September.

SABMiller and AB Inbev deal