Anheuser-Busch InBev has until 5pm on October 14 to make an offer or walk away under a “put up or shut up” deadline set by the City Takeover Panel. In a statement, the UK-based SABMiller said the firm had yet to receive the formal proposal. Furthermore, given that SAB’s share price has been so weak in the last 12 months, it makes a deal much more affordable.
Advertisement
It won’t be long before next steps are revealed. Shares of SABMiller are up over 20% and AB InBev is up 7% on this news.
Size: World’s second-largest brewer, with a market share of almost 10 percent.
Belgium-based AB InBev, which is already the world’s largest brewer, said it wanted to agree a takeover with the number two player, which has a £60billion market value.
It’s too early to accurately gauge the impact on St. Louis.
SABMiller’s U.S. operations include a MillerCoors brewery in St. Clair Twp. just outside Trenton in Butler County. “Beer industry sales have been slowing and there is hope this will provide some earnings momentum over the medium term”. In 2008 InBev merged with American brewer Anheuser-Busch to form ABI.
Time for SABMiller shareholders to celebrate with something fizzy and alcoholic.
It would combine AB InBev’s dominance of Latin America with SABMiller’s strong presence in Africa, both fast-growing markets, as well as strengthen their position in Asia.
If a divestiture is needed to comply with anti-trust regulations, MolsonCoors would likely be interested in acquiring the remaining interest in the previous joint venture. According to Euromonitor, AB InBev has a 21 percent share of the global beer market.
As well as having to sell-off certain brands in the US, some experts are speculating that a takeover would see the sale of SABMiller’s stake in its CRSnow joint venture with China Resources Enterprise Ltd. CRSnow is behind Snow Beer, the largest selling beer brand in the world.
The prospective deal, which has become known as “megabrew” by financial analysts, would provide a huge shot in the arm for the City as M&A activity finally takes off. “It’s pretty obvious that Molson Coors is the only buyer in town”. “When that happens, the purchase price tends to favor the buyer more than the seller”.
ABInBev then confirmed in its own statement that it has approached SABMiller’s board of directors about a combination of the massive brewing companies.
“DOJ didn’t allow the U.S. absorption of Modelo without a sell-off (to Constellation Brands-Beer Divsion), so it is hard to think that they would allow absorption of Miller“.
Latest annual revenue: $47.06 billion. Last year SABMiller made an approach to Heineken that Bloomberg reported was an effort to stymie AB InBev’s advances. The largest brewer in the world adds nonetheless, that there is no certainty that this approach will lead to an offer or deal with its competitor. Today the company employs about 69,000 people in more than 80 countries, from Australia to Zambia, Colombia and the Czech Republic.
Advertisement
“This is make or break time for the Heineken family”, Schumacher said.
