2 massive beer companies are talking about a massive merger

Anheuser-Busch InBev said on Wednesday that it had approached SABMiller about a potential takeover in a deal that, if it passed antitrust muster, would combine the world’s largest beer makers into a global giant.

Anheuser-Busch InBev SA/NV, the parent company of Budweiser, has indicated to SABMiller, the parent of MillerCoors, that it plans to make an acquisition offer.

Analysts say the mega deal could provide some breathing space for the large brewers but is unlikely to reverse the trend.

Beer companies like these may be consolidating as beer consumption in emerging markets like Brazil and China have been going down, Robobank global analyst Ross Colbert stated, according to Bloomberg.

If the deal goes through and passes antitrust review worldwide, the new company would instantly become the 13th largest advertiser in the U.S.

Shares in SABMiller closed up 20 per cent to £36.14 in London, giving it a market capitalisation of €80.3 billion. SABMiller’s U.S.-listed shares climbed 4.8 percent.

In a statement, AB InBev said it “confirms that it has made an approach to SABMiller’s Board of Directors regarding a combination of the two companies”.

No proposal has yet been received and there can be no certainty that an offer will be made, SABMiller said on Wednesday. Just over 41pc of AB InBev’s shares are jointly owned by 3G, a Brazilian private equity firm that has driven much of the consolidation in brewing, and several Belgian brewing dynasties.

This merger would be more enticing for AB InBev than for SABMiller since SABMiller is its major competitor. If the deal is accepted, beers like Budweiser, Corona, Stella Artois, Miller Lite, Peroni and Grolsch would all belong to the same beer family.

AB InBev and other top brewers are trying to move into new markets as they look to shrug off weakness in North America and Europe, where consumers increasingly choose craft beers made by independent players or wine or spirits. Under the put-up-or-shut-up rule, as it is called, if AB InBev were to walk away from the transaction it would not be able to come back for six months. “In the interim, shareholders are strongly advised to retain their shares and to take no action”.