The move is seen as a critical deal for securing regulatory approval for Anheuser-Busch InBev’s $107 billion takeover of SABMiller.
Advertisement
Under the terms, AB InBev is offering to pay £44, or about $66.49, a share for SABMiller. Although the discount of the PSA vs the cash offer has narrowed from 11% to 5%, we would expect most shareholders to accept cash, given that the restricted shares will be unlisted with a five-year lock-up. By purchasing SABMiller’s stake, Molson Coors will gain full control of the operations, and retain the rights to all the brands in MillerCoors United States portfolio.
Budweiser brewer Anheuser-Busch InBev and SABMiller have formally agreed a £71bn tie-up that will bring the two companies together. That’s subject to the finalizing of A-B InBev’s takeover of SABMiller, which is expected to be complete in the second half of 2016. A previous version said the MillerCoors joint venture was 48 per cent owned by Molson Coors.
“That creates competition questions, of course, and SABMiller will have to sell its 58 percent share in MillerCoors to try to ease regulators’ concerns”.
Belgium-based AB InBev said it is also selling the Miller global business.
The new company will account for 29 per cent of the global 198 billion litre beer market.
In Canada, the beer market has always been dominated by Molson Coors and AB InBev, through its ownership of Labatt, although the two beer giants have increasingly been challenged by the popularity of smaller local craft brewers.
The deal puts a huge portion of the world’s beer market all under the same umbrella: The AB InBev-SABMiller union now has an estimated global market share close to 30% after divestitures, and controls eight of the 10 most popular beer brands in America.
“By pooling our resources we would build one of the world’s leading consumer-products companies”, said AB InBev Chief Executive Carlos Brito.
The deal is valued at $12 billion and will be financed through a combination of cash on hand and proceeds from issuances of new debt and equity.
Advertisement
Altria, one of the biggest tobacco companies in the world, owns approximately 27 percent of SABMiller, whose beer brands include Miller Lite, Miller Genuine Draft, Coors and Blue Moon.
