Sunday 25 September 2016

InBev goes formal with €100bn 'Megabrew' takeover offer

Paul Jarvis and Thomas Buckley

Published 12/11/2015 | 02:30

SABMiller beer Miller and Grolsch. Photo: PA
SABMiller beer Miller and Grolsch. Photo: PA

Anheuser-Busch InBev made a formal $107bn (€99.6bn) offer for SABMiller, sealing a long-anticipated deal that combines the world's biggest brewers into a company controlling about half the industry's profit.

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To gain regulatory approval, Molson Coors Brewing will acquire SABMiller's 58pc stake in MillerCoors for $12bn, giving it full control over brands like Coors Light and Blue Moon. The Budweiser maker plans to slash annual costs by $1.4bn, one third of which will come from overlapping head-office roles. The companies didn't say what the new entity will be called, or whether SABMiller's senior management team will remain.

Dubbed "Megabrew" by analysts, the new company will be the world's largest consumer-staples maker by earnings, according to Exane BNP Paribas, generating profits of about $25bn. The enlarged brewer will have the number one or two positions in 24 of the world's 30 biggest beer markets, and provide AB InBev its first toehold in Africa, where about 65 million people are due to reach the legal drinking age by 2023.

The deal "promises to transform the global brewing landscape", said Jon Copestake, an analyst at the Economist Intelligence Unit. "The divestment of SABMiller's North American business will placate American regulators to some degree, but there will remain regulatory obstacles to a merger of this size."

The Belgian and Brazilian families that control AB InBev will see their ownership diluted from more than 50pc to 34.5pc, and will hold nine of 15 board seats. SABMiller's two big shareholders, Altria and Colombia's Santo Domingo family, will own 16.5pc.

Altria will have two board seats, the tobacco maker said in a statement. The merged company will be listed in Brussels, Mexico and Johannesburg. AB InBev will finance the deal from a mix of cash and a record-breaking $75bn commercial loan. (Bloomberg)

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