AB InBev and SABMiller: bid could be made this week

Anheuser-Busch InBev SA (AB InBev) could table an initial $106 billion takeover offer for SABMiller as early as today, the Sunday Times yesterday reported.

SABMiller jumped in early London trading amid speculation that Budweiser maker Anheuser-Busch InBev is close to submitting a bid.

According to the average of five analyst estimates compiled by Bloomberg, AB InBev may pay more than 4,200 pence for each share of its rival, which would value London-based SAB at about 68 billion pounds ($103 billion). However, the British-South African multinational brewing and beverage company is also not unreceptive to the deal. The sources said SABMiller is seemingly open to a deal, but is looking to drive a hard bargain. The Telegraph reported that AB InBebb already won over Altria before approaching SABMiller, saying it would prefer an offer in shares rather than cash to avoid a massive capital gains tax bill.

SABMiller also noted that by not later than October 14, AB InBev must either announce a firm intention to make an offer for the company or announce that it does not intend to make an offer. If regulators allow a takeover of this size, it would be the biggest acquisition in the history of the beer industry, and one of the biggest in the world.

A combination between the world’s two largest brewing companies would create a £177-billion beer behemoth, owning more than 400 brands, including Stella Artois, Foster’s and Corona. As of the moment, both companies have declined to comment on the report.