The latest bid, an improvement on Monday’s bid of £43.50 a share, represents a premium of about 50 percent to SABMiller’s closing price on September 14, the final business day prior to renewed speculation of an approach by AB InBev.
Advertisement
The PSA consists of 0.483969 unlisted shares and 3.7788 pounds in cash for each SABMiller share, equivalent to a value of 39.03 pounds per SABMiller share on October 12. It employs around 69,000 people in more than 80 countries and has global annual sales of more than 26 billion U.S. dollars (£17bn). It will be one of the biggest acquisitions in corporate history.
Together, AB InBev and SABMiller will be the world’s largest consumer-staples company by earnings, according to Exane BNP Paribas analysts, who estimate the combined company will make $25 billion before interest, tax, depreciation and amortisation in 2016. The previous deadline was Wednesday.
Royal Mail shares also retreated by 5.1 percent after the British government sold off the remainder of its stake in the company.
AB InBev has agreed to pay $3 billion to SABMiller if the deal does not close because of failure to get the approval of regulators or AB InBev shareholders.
The agreement with SABMiller marks a further success for 3G, after previously orchestrated takeovers of Burger King, ketchup maker Heinz KHC.O and Kraft Foods.
SABMiller’s two largest shareholders, Altria and the Santo Domingo family, which have a 41% stake in the London-headquartered brewer between them-had initially come down on different sides of the offer.
SABMiller – which owns Peroni – says its board is prepared to recommend the offer.
SABMiller has previously spurned its rival’s advances, claiming the offers “substantially undervalued” the London-based business. As it stands, and if this deal goes through, it would mean that the merged entity would control 31% of global beer sales.
Most analysts think that the geographical diversification of the two companies is such that there will not be so much overlap to force regulators into scrapping the deal outright. In 2004, Belgian Interbrew combined with Brazilian Ambev to make InBev, and in 2008 InBev bought U.S.-based Anheuser Busch. AB InBev has until October 28 to make the bid formal. It is controlled by a joint venture involving SABMiller and China Resources Enterprise Ltd. A few divestitures could also be required In Latin America. The agreements are automatically extended for another 10 years unless either company gives written notice at least two years before they expire.
For AB InBev, a deal would allow it to bolster its presence in Africa and Australia, where it is not as dominant as it now is in Europe, North Africa and Asia.
Advertisement
The world’s two biggest brewers have agreed a £68bn deal to create a global beer giant, bringing to an end an increasingly fraught takeover battle and earning the praise of investors.
