MillerCoors sale seals AB-SAB deal

To ease concerns SABMiller might sell fifty eight percent of its stake in a venture with brewer Molson Coors for around $12 billion.

The deal will bring together InBev’s top lagers like Beck’s, Budweiser and Stella Artois, with SABMiller brands Foster’s, Grolsch and Peroni.

The takeover, which SABMiller’s board provisionally accepted last month, would be the largest of a British-based company and the fourth-biggest overall of any corporation.

The huge brewer will have positions No. 1 and No. 2 in 24 of the 30 largest world beer markets and will give AB InBev its first hold on the continent of Africa, where close to 65 million people will reach the legal age for drinking by the end of 2023.

“We are excited to create a truly global brewer and one of the world’s leading consumer products companies, drawing on a similar heritage and shared passion for brewing and commitment to quality”, Anheuser-Busch wrote in a letter to Congress.

It listed in London in 1999, which the group claims was the “launch pad” for its global ambitions, since becoming the second largest beer group behind AB InBev.

The sale of MillerCoors – which sells brands including Miller Lite, Miller High Life and Blue Moon – is necessary for AB InBev to gain USA regulatory approval to buy SABMiller.

Carlos Brito, chief executive of AB InBev said the company would be looking to make $1.4bn of savings, including almost $500m from streamlining “corporate headquarters overlap” but would not comment on whether that means SAB Miller will lose its United Kingdom headquarters in Mayfair. The takeover follows the combination just years ago of Anheuser-Busch and InBev as the alcohol industry continues to consolidate, and is a hallmark of 3G Capital, the Brazilian investment firm that is AB InBev’s largest shareholder. AB InBev will pay £44 per share for SABMiller, up from its initial offer of £38 made privately in September. As part of the deal, SABMiller also agreed to sell Miller’s worldwide business.

Based on Tuesday’s closing share prices and current exchange rates, the offer is worth £70 billion (S$150 billion).

In Canada, the beer market has always been dominated by AB InBev through its ownership of Labatt and MolsonCoors, although the giants have increasingly been challenged by the popularity of smaller local craft brewers.