Saturday 10 December 2016

Shares soar as AB InBev to make offer for rival SABMiller

Published 16/09/2015 | 10:52

Wooden beer cases are seen on display inside a stable for the Budweiser Clydesdales during an Anheuser-Busch Cos. brewery tour July 14, 2008 in St. Louis, Missouri. Anheuser-Busch Cos. Inc.'s board of directors voted Sunday to accept Belgian brewer InBev's takeover offer of $52 billion. Photo: Whitney Curtis/Getty Images
Wooden beer cases are seen on display inside a stable for the Budweiser Clydesdales during an Anheuser-Busch Cos. brewery tour July 14, 2008 in St. Louis, Missouri. Anheuser-Busch Cos. Inc.'s board of directors voted Sunday to accept Belgian brewer InBev's takeover offer of $52 billion. Photo: Whitney Curtis/Getty Images

Anheuser-Busch InBev, the world's largest brewer, has informed rival SABMiller that it intends to make an offer to acquire the British firm, although no proposal has yet been forthcoming.

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Shares in SAB, which owns such brands as Peroni, Grolsch and Pilsner Urquell, were up 21 percent. AB, which has Budweiser, Stella Artois and Corona, was up 7 percent before trading was suspended.

A merged group would have a combined market value of around $270 billion, based on current prices. It would combine AB InBev's dominance of Latin America with SABMiller's strong presence in Africa, both fast-growing markets, as well as strengthening their position in Asia.

Britain-based SABMiller, the world's No. 2 brewer, said on Wednesday that it had been informed by its bigger Belgian rival that it intended to make a proposal but it did not have any further information about the terms.

"The board of SABMiller will review and respond as appropriate to any proposal which might be made," it said. "There can be no certainty that an offer will be made or as to the terms on which any offer might be made."

AB InBev responded by confirming its approach to SABMiller's board. "There can be no certainty that this approach will result in an offer or agreement, or as to the terms of any such agreement," it said.

Speculation of such a mega-merger has often surfaced in a global market increasingly dominated by big multinationals.

One key area of concern to regulators would be the combined group's market share in the United States, where AB InBev has almost half the market and SABMiller's joint venture with Molson Coors just under 30 percent.

Reuters

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