- After weeks of deadline extensions, Anheuser-Busch InBev has formalized its takeover offer of SABMiller, which AB InBev will buy for $105.5 billion upon divestitures and regulatory approval. The combined entity will hold a significant presence in the global beer market as the largest beer company in the world with about a 30% market share, and the deal is one of the biggest in corporate history.
- As part of the deal, SABMiller will divest its 58% stake in the MillerCoors joint venture to its partner Molson Coors, which owns the rest of the company, as well as the rest of the Miller portfolio outside of the U.S. for $12 billion. This deal, which Molson Coors CEO Mark Hunter calls "a game-changing opportunity," would land Molson Coors as the second-largest brewer in the U.S. with a 25% market share behind AB InBev's 45% share.
- AB InBev estimates savings of at least $1.4 billion a year pre-taxes by the end of the fourth year following completion of the deal.
"We believe this combination will generate significant growth opportunities and create enhanced value to the benefit of all stakeholders," AB InBev CEO Carlos Brito said in a statement. "By pooling our resources we would build one of the world’s leading consumer-products companies. Our joint portfolio of complementary global and local brands would provide more choices for beer drinkers in new and existing markets around the world."
The combined company is even more international than ever before with a strong presence in the U.S., China, Europe, Africa, and Latin America, which includes opportunities to operate in both strongly developed and emerging markets.
China could be a problem in terms of regulatory approval, and the companies haven't announced what they'll do. SABMiller’s joint venture with China Resources Enterprise Ltd. holds a 23% market share, according to Euromonitor, and AB InBev had a 14% market share in the country as of 2014.
AB InBev will pay £44 (about $67) a share, which is a 50% premium over SABMiller's share price on Sept. 14, the day before rumors about a potential deal between the two companies made headlines.
As analysts expected, the formalized deal came with an announcement as to what SABMiller would do with MillerCoors. Craft brewers have speculated what this deal might do to craft beer distribution, as the two companies own many of the distribution centers in the U.S.
The combined company's ordinary shares will be listed in Brussels, Johannesburg, and Mexico, and the American depositary shares will be listed in New York.