Anheuser-Busch InBev (AB InBev) has raised its takeover offer for sector peer SABMiller to £79bn ($103.8bn, €93.8bn), after investors expressed their concern over the proposed deal in the wake of the sterling’s sharp depreciation over the past month. Hence, both the parties are back on the negotiation table. Shareholders who took a partial share alternative – a combination of cash and stock – instead of a simple cash consideration for their stakes stood to gain from the currency fall.
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Anheuser-Busch InBev is down 5.4%, while Molson Coors TAP is off 5.1% with the status of MillerCoors now in question. The Leuven, Belgium-based company designed the alternative offer as a way to reduce taxes for Altria and Bevco.
But SABMiller shareholder Aberdeen Asset Management immediately poured cold water on the improved offer, calling it “unacceptable” and maintaining that it undervalues the company while continuing to favour SABMiller’s two major investors. This is because of the two main reasons. However, the Brexit elections generated uncertainty about the value of the pound against the dollar and the euro.
The headline figure was a cash amount of £44 per SABMiller share.
In the other hand, SABMiller claimed it was considering the revised offer and confirmed the reunion between the chairmen of the two giants, with the idea of discussing “recent exchange rate volatility” and other market movements.
South Africa’s Public Investment Corporation (PIC), a top five shareholder, told Reuters it was in talks with SAB over the revised offer, but declined to make its view public.
Finally in November, SABMiller agreed to merge with AB InBev. This deal was expected to complete in the second half of this year and will create the world’s largest brewer. AB InBev rose 0.3 per cent. According to Bernstein the offer is a “final bid”, which means that under United Kingdom takeover rules AB InBev will not be allowed to increase this bid from its new £45 level.
What is clear is that the deal is strategically important to AB InBev. But the brewers are waiting for final approval from Chinese regulators and global shareholders.
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Last week, the US Justice Department approved the deal, despite the agreement coming with a string of conditions, mostly enabled to protect independent beer distributors.
