The two of the largest beer makers in the world are joining forces to create one company which will produce about one third of the total beer in the world.
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The deal is dependent on regulatory approvals and the successful completion of AB InBev’s $107 billion acquisition of SABMiller, which moved a step forward with a formal offer on Wednesday.
Carlos Brito, Chief Executive Officer of AB InBev, said: “Our combination with SABMiller is about creating the first truly global beer company and bringing more choices to beer drinkers in markets outside of the U.S. We are pleased to have reached this agreement with Molson Coors to divest SABMiller’s USA assets”. The deal will turn Molson into the second-largest brewer in the USA with control over one-quarter of the market.
The transaction is subject to certain closing conditions, including shareholder approvals of both SABMiller and AB InBev and receiving the required regulatory approvals.
“Looking beyond the USA, the combined company will extend the global reach of AB InBev’s iconic American brands, such as Budweiser, to more markets around the world”, the company wrote.
AB InBev notes that its acquisition of SABMiller will strengthen its position in key emerging regions: with Asia, central and south America, and Africa identified as holding strong growth prospects. “To put it simply, we believe more can be achieved together than apart”.
Beer giant Anheuser-Busch InBev (of Budweiser and a gazillion others) and SABMiller (of Miller and a gazillion different others) formalized their merger Wednesday morning, right up against regulators’ deadline.
There’s a share and cash alternative that values SABMiller’s shares at £41.85 a share, but that’s aimed at its two biggest institutional shareholders – Altria Group, the holding company for tobacco firm Philip Morris and the billionaire Santo Domingo family – who will get a few money for their SABMiller investments while also remaining shareholders in the enlarged group.
Under the terms, AB InBev is offering to pay £44, or about $66.49, a share for SABMiller.
Strong growth among its premium brands saw SAB Miller boost sales, a day after it formally agreed a £71 billion merger with Anheuser-Busch InBev that marks the biggest ever takeover of a British company.
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AB InBev had time until 5pm on 14 October to make an official bid. The newly merged company will be listed in Johannesburg, Mexico and Brussels.
