SABMiller Chairman Jan du Plessis called his company “the crown jewel of the global brewing industry” and said AB InBev’s proposals were created to be unattractive to many shareholders.
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SABMiller added that its statement was released “without the prior agreement or approval of AB InBev”, whose beers include Budweiser, Corona and Stella Artois.
The resulting company would generate revenues of US$64 billion (£42bn) per year, and earnings before tax and deductions of $24bn (£15.7bn), according to AB Inbev, making it one of the largest consumer product companies in the world.
Bernstein Securities said the most likely outcome was for SABMiller to eventually accept AB InBev’s advances, leading to a higher bid after extension of an October 14 deadline for AB InBev to reveal its intentions.
The board of SABMiller spurned a cash proposal worth $104 billion on Wednesday, saying it wasn’t high enough.
Anheuser-Busch InBev, the world’s largest brewer, has made a formal £68bn (€92bn) bid for its smaller rival, SAB Miller, mainly in cash.
SAB’s shares started to rise on 15 September on speculation that AB InBev would make a firm takeover offer.
“Each time the board of SABMiller has refused to engage”, the brewer said. It can create more value by remaining independent and pursuing growth in emerging markets such as Africa and Latin America, the company had said earlier.
AB InBev said: “Together with its advisers, AB InBev has done significant work on regulatory matters and has identified solutions that provide a clear path to closing”.
“The clarification came after Altria, the tobacco company and SAB’s largest shareholder with 27 per cent, had earlier voiced its support of AB Inbev’s third proposal”.
“Altria urges SABMiller’s board to engage promptly and constructively with AB InBev to agree on the terms of a recommended offer”, the company said in a news release. Representatives of AB InBev didn’t respond to requests for further comment.
AB InBev doesn’t have “tremendous room” to raise the price, because the cost savings from this purchase won’t be as big as in the brewer’s past acquisitions, he said. Chinese authorities could require the brewer to exit SABMiller’s joint venture with China Resources Enterprise Ltd., which controls 23% of the market and produces the top-selling Snow brand.
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In a note on Thursday morning German investment bank Berenberg has characterised this approach as going “hostile lite”, referencing SABMiller’s Miller Lite beer.
