Anheuser-Busch InBev, the world’s biggest brewer, launched its $100 billion-plus (€93 billion) offer for nearest rival SABMiller yesterday and agreed to sell the latter’s stake in US venture MillerCoors to help win regulatory approval.
AB InBev, whose takeover of SABMiller would be one of the largest mergers in corporate history, said it expected to achieve $1.4 billion in annual savings four years after completion of the deal, projected for the second half of 2016.
The deal, worth about $106 billion, was clinched with an agreement for Molson Coors to take over SABMiller’s 58 per cent stake in its venture, MillerCoors, for $12 billion.
That price tag is higher than some analysts expected, given the small group of potential buyers. However, they had not anticipated it including global rights to the Miller brand, which will nearly double the amount of beer Molson sells internationally.
At the same time, the savings target, worth about 9 per cent of SABMiller’s sales, is lower than expectations, although it does come on top of the $1.05 billion SABMiller had already pledged during the bidding process.
The merger will combine AB InBev’s Budweiser, Stella Artois and Corona brands with SABMiller’s Peroni, Grolsch and Pilsner Urquell and brew almost a third of the world’s beer, dwarfing rivals Heineken and Carlsberg.
The takeover, which SABMiller’s board provisionally accepted last month, would be the largest of a British-based company and the fourth-biggest overall of any corporation. It will be backed by a record $75 billion loan.
With SABMiller, AB InBev is buying into Latin American countries such as Colombia and Peru and Africa which has a fast-growing middle-class.
AB InBev is offering £44 per SABMiller share, along with a discounted alternative of mostly shares, designed for SABMiller’s two largest shareholders, Altria and BevCo. – (Reuters)
