- The rumors are true: Anheuser-Busch InBev has officially announced its intentions to discuss a takeover deal with SABMiller Plc. Terms of the deal were not disclosed, and AB InBev said that no deal was certain.
- The possible merger of the world's two largest brewing companies would likely raise antitrust concerns for regulatory agencies across the world. As the two companies stand now, combining them would comprise about 30% of the global beer market, according to Euromonitor.
- AB InBev has until 4 p.m. GMT on Oct. 14 to either make an offer or withdraw.
The announcement follows speculation from investors and industry experts that resurfaced yesterday. AB InBev had not sent its CFO to a conference last week, according to an investor blog, and Altria, SABMiller's largest shareholder, announced it would not be attending an upcoming conference either, prompting the speculation that a deal could be in the making.
While antitrust concerns are likely for a beer behemoth that could potentially control almost one-third of the market, they could be overcome with some divestitures, such as SABMiller's stakes in MillerCoors in the U.S. and CR Snow in China.
Acquisitions have been big news in the beer industry recently. Last week, Heineken acquired a 50% stake in top-10 U.S. craft brewer Lagunitas Brewing, and MillerCoors announced its purchase of craft brewer Saint Archer Brewing Co.
If the deal goes through, this would be a different strategy for the major beer companies, who are struggling to maintain sales and market share as the craft beer industry surges. AB InBev and SABMiller have "a lot of good geographic synergy," Morningstar Inc. analyst Adam Fleck told Bloomberg.
"Like many mergers, it would be a product of strategic weakness rather than strength: slowing growth in emerging markets, where both companies are heavily exposed, and the loss of market share to craft brewers in stagnant or shrinking developed markets, has challenged the business model of both groups," Fortune reported.
This merger would easily be the largest food and beverage industry merger to date, towering over the $46 billion Kraft Heinz merger earlier this year and even the $52 billion AB and InBev merger in 2008. Together, AB InBev and SABMiller currently have a market capitalization of $245 billion.