AB InBev, SABMiller OK in principle to set up beer merger

The all-cash offer represents a premium of about 50 per cent to SABMiller’s closing share price of £29.34 on 14 September.

The company raised its cash offer to $66.74 per share and a partial share alternative available for approximately 41 percent of the SABMiller shares, the news release said.

SAB Miller has already turned down previous offers of over $100 billion.

Anheuser-Busch InBev has approached rival SABMiller about a takeover that would form a brewing colossus producing a third of the world’s beer.

Its suitor, AB InBev, boasts a 155,000-strong global workforce and makes more than £30.5billion in global revenues.

Having dismissed the five previous proposals from AB InBev over the past few weeks as undervaluing the company, the directors of SABMiller finally succumbed to an offer that values each SABMiller share at 44 pounds.

Bloomberg also reported that both companies have sought an extension to the original 5pm 14 October deadline that was laid down by the UK’s regulatory authorities. It also urged SAB’s board to “engage promptly and constructively” with InBev to agree on the terms of a recommended offer.

(MO), SABMiller’s largest shareholder, and BevCo Ltd., and from AB InBev’s largest shareholders, the Stichting Anheuser-Busch InBev, EPS Participations SaRL and BRC SaRL.

AB InBev has until 1600 GMT on Wednesday to launch a formal bid for the maker of Peroni and Grolsch, in what would be the biggest United Kingdom company takeover ever.

The combined company would have a turnover of $244bn and brew three in every 10 beers sold worldwide.

The cash-and-share alternative is meant to be unattractive for institutional shareholders.

Dan Matjila, chief executive of Public Investment Corporation who owns about 3% of SABMiller, said in a statement that they have confidence in the board and will rely on their decision.

Yet for AB InBev shareholders, the higher offer means less future upside if the deal goes through.