SABMiller, which produces Grolsch and Coors among others, yesterday told the stock market that it had received an approach from Anheuser-Busch InBev, the brewer of Budweiser and Stella Artois, for a possible deal to create an estimated $330bn (£212.8bn) company dubbed “Megabrew” by analysts, which would collectively control a third of the world’s beer sales.
The speculation of a possible deal sent shares of SABMiller up c20% to £36.14, valuing the group at £58.5bn, excluding debt of $10.5bn
AB InBev has until 5pm on 14 October to either announce a firm intention to make an offer for SABMiller or not.
SABMiller has responded to speculation and said no proposal has yet been received and its Board has no further details of such a proposal.
In a statement, the company said: “The Board of SABMiller will review and respond as appropriate to any proposal which might be made. There can be no certainty that an offer will be made or as to the terms on which any offer might be made.”
It has advised shareholders to retain their shares and to take no action.
In a statement, AB InBev said: “AB InBev confirms that it has made an approach to SABMiller’s Board of Directors regarding a combination of the two companies. AB InBev’s intention is to work with SABMiller’s Board toward a recommended transaction. There can be no certainty that this approach will result in an offer or agreement, or as to the terms of any such agreement.”
Trevor Stirling, analyst at Bernstein, said: “The US Department of Justice would almost certainly insist on the disposal of SABMiller’s stake in MillerCoors in the US. And ABI might also have to dispose of SABMiller’s 49 per cent stake in CR Snow in China. But it is also likely that Molson Coors and CRE would be willing purchasers respectively.”
Any deal would require the backing of Altria Group Inc., the largest shareholder in SABMiller with a 27%. AB InBev will also need to persuade the family of Alejandro Santo Domingo, among the richest clans in Colombia and the owner of a 14% in SABMiller.
The two largest brewers have been seen as the endgame for global beer mergers. An acquisition of SABMiller, led by chief executive Alan Clark, would give AB InBev access to more than $7bn of revenue in Africa with brands including Castle lager and almost $4bn of sales in Asia, reducing AB InBev’s dependence on the Americas and Brazil.
