AB InBev warns SABMiller against letting £65bn deal ‘slip away’

AB InBev brews Budweiser, Stella Artois and Corona, while SAB brews Peroni and Grolsch, among others.

On Wednesday, SABMiller chairman Jan du Plessis said “AB InBev is very substantially undervaluing SABMiller”.

Furthermore, SABMiller’s largest shareholder, Altria Group, yesterday advised the rest of the company’s board to accept AB Inbev’s offer – the third after offers of £38 and £40 per share were rejected by SABMiller.

AB InBev said its proposal to buy the company was a great deal for SABMiller investors.

Nomura said it continues to recommend owning SABMiller given the likelihood of a deal, adding that it reckons a sweetened offer could come.

Its suitor AB InBev, based in Leuven, Belgium, has a 155,000-strong global workforce and makes more than US$47.1bn in global revenues.

“AB InBev intends to work proactively with regulators to resolve any concerns”, said the company in its statement.

Anheuser-Busch InBev (AB InBev) raised its offer on Wednesday to buy the world’s No. 2 brewer SABMiller to 42.15 pounds (57.17 euros, $64.27) per share in cash. “SABMiller clearly has a figure in mind and it is going to take AB InBev digging out its wallet and taking on a bit more debt to win SABMiller’s hand”. Each time the SABMiller board has refused to engage.

Anheuser-Busch InBev, the world’s largest brewer, has made a formal £68bn (€92bn) bid for its smaller rival, SAB Miller, mainly in cash.

“The completed deal will give AB InBev a 29 percent market share, which is a 20 percentage point lead over the next biggest brewer, Heineken”, Cunnington said.

But SABMiller put out a statement just hours later saying the board “unanimously rejected” the offer because it “substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects”.

The largest beer deal in the industry’s history was InBev’s $52 billion acquisition of St. Louis-based Anheuser-Busch in 2008.

“How long will it be before shareholders see a value of over 42 pounds in the absence of an offer from AB InBev?”

Top shareholder Altria, the tobacco group which has 26.56 percent of SABMiller, promptly said it supported the bid and would be prepared to opt for the share alternative.

Today, SABMiller produces over 200 beers, and has 70,000 employees across 80 countries. Last month, the managing director of SABMiller Africa, Mark Bowman, revealed that Africa holds a multitude of business opportunities, and that the company was fiercely optimistic about its ability to expand in Africa.