Anheuser-Busch InBev Approaches SABMiller on Possible Takeover

16 Sep 2015 | Author: | No comments yet »

AB InBev to make offer for SABMiller in $280bn tie-up.

Peroni and Grolsch brewing giant SABMiller today revealed it has been approached by rival Anheuser-Busch InBev, which owns Budweiser and Stella Artois, with a takeover plan to form a $250 billion colossus in the world’s beer industry.LONDON — Anheuser-Busch InBev said on Wednesday that it had approached SABMiller about a potential takeover, but did not provide details of its proposal.The beer industry has used consolidation to stave off a slowdown in more established markets such as Europe and the United States, where drinkers are swapping to craft brews and wine and spirits, or merely drinking less.

In a statement, SABMiller said: “No proposal has yet been received and the board of SABMiller has no further details about the terms of any such proposal”. Shares in drinks makers rose to the top of the pan-European stock index Wednesday morning after SABMiller PLC said it had received a takeover approach from Anheuser-Busch InBev NV.

SABMiller shares, which have been subject to takeover speculation for several months, soared more than 20% on the news valuing the London-based drinks giant at £59 billion. Such a deal would combine two of the world’s largest brewers, bringing some of the world’s most popular beers under one roof, including Anheuser-Busch InBev’s Budweiser and SABMiller’s Miller Lite. SAB, the maker of more than 200 beers world-wide with a market capitalization of about $75 billion based on its closing share price Tuesday, saw its share price surge more than 23%.

SABMiller shares rose as much as 23 percent in London, boosting the company’s market value by more than 11 billion pounds ($17 billion) to 60 billion pounds. Traders in the City say the deal is valued at between £42-49 per share – a 58pc premium on where the stock was changing hands at prior to the announcement – and as such, the brewer could have a price tag of £73bn. In accordance with Rule 2.6(a) of the City Code on Takeovers and Mergers (the “Code”), AB InBev must, by not later than 5.00 p.m. on Wednesday 14 October, 2015, either announce a firm intention to make an offer for SABMiller in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for SABMiller, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. There has long been speculation of a tie up between the two companies, and yesterday, rumours resurfaced after SAB’s largest shareholder Altria pulled out of two conferences this week.

The stock rallied in late afternoon trade on Tuesday, to close up 2.8pc, after it was announced Altria will be missing a Bank of America Merrill Lynch conference later this week. Meanwhile, the failure of AB InBev’s chief financial officer to appear at a conference last week also prompted the resurgence of the merger-rumour mill. Earlier this year there was speculation that 3G Capital, a secretive investment firm run by a group of Brazilian billionaires, was plotting a £75 billion consortium takeover of SAB Miller which could also have involved AB Inbev. There has been a lot of consolidation in the beer market in recent years, as brewers have looked to expand into high-growth markets and to save costs from economies of scale.

Across the Stoxx Europe 600 by mid-morning, Heineken shares were up more than 5%, putting it just behind SAB Miller and AB InBev, Pernod Ricard rose more than 3% while LVMH Moet Hennessy Louis Vuitton was up more than 3%. The acquisition, should it go through, would allow AB InBev to tap into SABMiller’s dominant market position in Africa, where its brewing operations span more than 15 countries. Shares in both companies have had a rocky ride in recent months falling sharply during the month of August amid a global stock rout, fuelled by fears of a slowing Chinese economy. The two have been seen as the end game for global beer consolidation because they are not controlled by a family foundation like Amsterdam-based Heineken, or Denmark’s Carlsberg, the world’s third- and fourth-largest brewers and they have limited geographical overlap.

An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). Sales in Brazil were down 7.9% year-on-year due to “an unfavorable macroeconomic environment” and a comparison with a year-earlier period during which the country hosted the soccer World Cup tournament.

An acquisition of SABMiller would give AB InBev access to more than $7 billion of revenue in Africa with brands including Castle lager and almost $4 billion of sales in Asia, reducing AB InBev’s dependence on the Americas and Brazil. The largest global deal of 2015 belongs to Royal Dutch Shell with its £47 billion pending takeover bid for BG Group, followed by Charter Communications’ $79.6bn bid for Time Warner Cable and Energy Transfer Equity’s $70.6bn offer for Williams Companies. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles.

Anheuser-Busch InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD). Beer, the original social network, has been bringing people together for thousands of years and our portfolio of well over 200 beer brands continues to forge strong connections with consumers. This includes global brands Budweiser®, Corona® and Stella Artois®; international brands Beck’s®, Leffe®, and Hoegaarden®; and local champions Bud Light®, Skol®, Brahma®, Antarctica®, Quilmes®, Victoria®, Modelo Especial®, Michelob Ultra®, Harbin®, Sedrin®, Klinskoye®, Sibirskaya Korona®, Chernigivske®, Cass®, and Jupiler®.

Geographically diversified with a balanced exposure to developed and developing markets, Anheuser-Busch InBev leverages the collective strengths of its approximately 155 000 employees based in 25 countries worldwide. To view the original version on PR Newswire, visit:

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