The board of SABMiller has formally recommended AB InBev’s revised offer to buy the company, which values it at £79bn.
The move came after AB InBev satisfied the final pre-condition to presenting its bid after winning approval from China’s Ministry of Commerce.
The ministry gave its approval after AB InBev agreed to sell SABMiller’s 49% stake in China Resources Snow Breweries Ltd to China Resources Beer (Holdings) Co. Ltd, which currently owns the other 51%.
It means AB InBev has now obtained approval in 23 jurisdictions.
Following the decision, the SABMiller board issued a statement saying it would unanimously recommend a revised £45 per share offer for the company.
Chairman, Jan du Plessis, said: “The Board’s decision was difficult given changes in circumstances since the Board originally recommended £44 per share in cash last November. At that time we were satisfied that the 50% premium to the undisturbed share price appropriately reflected the quality of the business and its long term prospects.
“Since then, various factors have affected the value of the offer, most importantly the impact of the Brexit vote on the value of Sterling and the re-rating of comparable companies. This has made the Board’s decision more challenging, and we believe the final cash consideration of £45 per share to be at the lower end of the range of values considered recommendable.
“It is a huge credit to chief executive Alan Clark and his management team’s leadership and professionalism that they have not allowed the distraction of the deal over the past eight months to affect performance. They have continued to produce impressive results and further enhanced the value of the business.
“In reaching its decision, the Board has considered the best interests of the Company as a whole and has taken into account all salient facts and circumstances. The Board has also received extensive shareholder feedback and considered the views of our financial advisers, including the recently appointed Centerview Partners.
“We are cognisant that the PSA initially stood at a discount to the Cash Consideration, but recent events have resulted in it now standing at a headline premium, before any illiquidity discount. Amongst other reasons, that is why we intend to ask the UK Court to treat Altria and BEVCO as a separate class of shareholders.
“Now that the regulatory pre-conditions are satisfied, the Board and management will continue to work constructively with AB InBev to bring about successful completion of the transaction as soon as practicable”.
AB InBev welcomed the announcement from the SABMiller board and said it still expected the deal to complete in 2016. It said another announcement would follow in due course with further details.
