AB InBev expected to make $100B bid for SABMiller Monday

Earlier this month, SABMiller said ABI had told it that it planned to make a proposal to acquire the company.

AB InBev is the largest brewer in the world.

“The board of SABMiller will review and respond as appropriate to any proposal which might be made”, it said. According to Reuters, the first bid could be made as early as 28 September (Monday).

The US market has been flat for years with one chief exception: Craft breweries which are stealing domestic market shares of both SABMiller and AB InBev. The Company’s brand portfolio includes three classes: global brands Budweiser, Corona (NYSE:BUD) and Stella Artois; multi-nation brands Beck’s, Leffe and Hoegaarden, and local brands Bud Light, Michelob, Victoria, Modelo Especial, Negra Modelo, Skol, Brahma, Antarctica, Quilmes, Jupiler, Klinskoye, Sibirskaya Korona, Chernigivske, Cass, Harbin and Sedrin.

Based on this element alone, a price tag of up to 4,600p seems about right, even though the net present value of synergies suggests a fair take-out price lower than 4,000p, according to my calculations. Anheuser InBev was formed following acquisition of American brewer Anheuser-Busch by Belgian-Brazilian brewer InBev, which in turn was a merger of AmBev and Interbrew. Vetr cut Anheuser Busch Inbev SA from a “buy” rating to a “hold” rating and set a $134.65 price objective for the company.in a report on Wednesday, June 10th.

Agreeing on the sale price will not be the only hard task.

A report by research firm Bryan, Garnier said: ‘If it was allowed to merge its operations with those of CR Snow, it creates a market leader with 38 per cent, which would become very profitable and force others in the industry to react’. Given the global presence both the companies have, they will have to get regulatory clearances from all associated authorities as well.

As reported in TheShout, major SABMiller shareholder Altria has already held private talks with AB InBev and has said it was “open to considering a proposal” depending on the terms.