SABMiller formally rejects higher InBev offer

It was the third recent offer by A-B InBev to SABMiller’s board, and the third rejected.

Anheuser-Busch Inbev Sa has an analyst consensus of Strong Buy.

SABMiller added that its statement was released “without the prior agreement or approval of AB InBev”.

If the two companies were to merge it would create a £180 billion company that would produce one out of every three beers drunk globally and would generate revenue of £42 billion.

The coupling of SABMiller and AB Inbev would create a global brewing giant and may attract significant attention from competition authorities.

Due to the lower value of the share offer, AB InBev said it expects most SABMiller shareholders to choose the cash offer.

If the companies did tie up, it would combine AB InBev’s dominance in Latin America with SABMiller’s Africa presence, where it is the market leader in 15 countries.

A-B InBev listed details of the proposal on a website, www.globalbrewer.com.

SABMiller’s largest shareholder, Altria Group, has come out in support of the latest offer. Altria is the owner of Philip Morris USA Inc. and U.S. Smokeless Tobacco Company.

As with the previous offers from the maker of Budweiser, this one had two tiers: AB InBev would pay £42.15 a share in cash for a majority of the stock.

With no white knight or poison pill, and with Altria putting its support behind the current bid or higher, the SAB board is expected to push for a better price – rather than outright rejection of the deal.

However, BevCo isn’t backing the most recent offer, according to Brito.

Bernstein Securities told Reuters that SABMiller would most likely eventually accept AB InBev’s advances, leading to a higher bid after the extension of an October 14 deadline for AB InBev to reveal its intentions.

Mr Brito said he was committed to a friendly deal, but did not rule out going hostile.

InBev has made two other attempts in recent months to buy the diversified, London-based brewer, but has been rebuffed each time.

It would also be the largest takeover of the year, and among the biggest in history.

AB InBev has retained as advisers Lazard and law firm Freshfields. Following the 2008 A-B purchase, the company pared its workforce in St. Louis, which remains its USA headquarters.

Under the most recent proposal, the pair would continue as investors in the enlarged group by taking part of their payment in unlisted stock, which could convert to AB InBev shares after five years. “This deal is about growth”, he said.

SABMiller toasted a strong summer for beer sales yesterday despite a “material” currency hit.