AB InBev has massive merger in the barrel

Now the SABMiller takeover will mean one out of every three beers drunk in the world comes from that company. We are pleased to have reached this agreement with Molson Coors to divest SABMiller’s USA assets.

One of AB InBev’s prizes in creating a global beer company will be to gobble up SABMiller’s footprint in Africa.

The two brewers had agreed in principle on a merger in mid-October.

If given the green light, the tie-up would see the enlarged group own a stable of brands including AB InBev’s Budweiser, Corona and Stella Artois, together with SAB’s Grolsch and Peroni. St. Louis is A-B InBev’s USA headquarters.

On Wednesday, Carlos Brito, the Anheuser-Busch chief executive, said the brewer would be “prompt, proactive and decisive” in addressing concerns by regulators. “Our business in the US does not change”.

“With little geographic overlap between the two companies, it is of little surprise the deal has been agreed, and the deal will also have limited antitrust issues”, said Jeremy Cunnington, an analyst with the research firm Euromonitor global.

Belgian-Brazilian behemoth InBev is eager to tap into booming developing markets in Africa and China, where SABMiller’s joint venture produces Snow – the world’s best selling beer by volume. A-B InBev already has about 14 percent of the Chinese market. The new company would be headquartered in Brussels, Belgium, where InBev is located.

Under the terms of the AB InBev-SAB agreement, SABMiller shareholders would receive GBP 44.00 (British pounds, now about $67.50) per share in cash, with a partial share alternative available for up to 41 percent of the SABMiller shares.

A-B InBev says the two have accepted the offer.

In a transaction valued at $12bn, SABMiller’s 58% stake in MillerCoors will be sold to Molson Coors. Reportedly, the takeover would more than double Molson Coors’ revenues, which amounted to $4.15 billion previous year, and add $1 billion in earnings before interest, taxes, depreciation and amortization. But if that happens, Molson will get the rights to Miller High Life, Miller Lite and Miller Genuine Draft internationally. “Please remember that we, along with ABI and SABMiller, are in the early stages of a very complex set of transactions that are far from closing”.

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