Budweiser producer Anheuser-Busch InBev offered £44 a share in cash for a majority of the shares in its nearest competitor to create the world’s biggest brewer. It will gain brands such as Peroni and Grolsch, giving it control of about half the industry’s profit. The price is 46% above SABMiller’s closing value on September 15, the day before the companies disclosed they were in contact about a potential bid.
After years of speculation, the deal has been hastened by the impact of slowing economies in the emerging markets of China and Brazil. A 20% drop in SABMiller shares in the months preceding AB InBev’s approach and the prospect of an end to cheap credit also served as a catalyst to a takeover.
The agreement, which is tentative, caps more than two weeks of back- and-forth negotiations over the price. SABMiller said its board is prepared to recommend the deal in principal.
Last week SABMiller officially rejected Anheuser-Busch InBev’s £42.15 (R863.83) per share takeover.
The board, excluding the directors nominated by Altria Group, had unanimously rejected the proposal saying it “still very substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects”.
SABMiller shares fell 1.3% to 3 621.50 pence in London on Monday. AB InBev was little changed at 98.35 euros in Brussels.
SABMiller spurned previous proposals, including one AB InBev made public on October 7 that valued the company at about £65.2-billion.
SABMiller’s two largest shareholders, Altria Group Inc. and Bevco Ltd., can receive cash and stock valued at £39.03 a share for their stakes, which account for 41% of the company. – Bloomberg