- Fifth time's a charm: SABMiller has accepted Anehuser-Busch InBev's takeover proposal of £44 ($67) a share, which values SABMiller at £67.9 billion ($104.2 billion). This follows four rejected takeover bids, all of which SABMiller said did not value the company high enough.
- In the deal, AB InBev included an option for 41% of stock to be a partial share alternative, or a combination of cash and stock that would mean a lower per-share price of £39.03 ($59.50). "The alternative was devised for SABMiller's two largest shareholders, Altria Group Inc. and the Santo Domingo family’s investment vehicle BevCo, and helps them with taxation and potential accounting issues," according to The Wall Street Journal.
- AB InBev also included dividend payments to shareholders to sweeten the deal, amounting to about $1.22 per share, which increases what SABMiller's shareholders get out of the arrangement by £1.3 billion ($1.98 billion). "Dividends are ordinarily suspended once a deal is agreed on and including these was a key part of recent negotiations by SABMiller’s board, according to a person familiar with the matter," The Wall Street Journal reported.
If the deal goes through, this would be the largest acquisition in the beverage industry, according to Dealogic, and the largest acquisition of the year, even topping out Kraft Heinz ($54.5 billion).
Next up will be regulatory hurdles the two companies need to overcome for this deal to go through, which are likely many considering the combined company would control nearly one-third of the global beer market. The biggest hurdle will likely be the U.S., where AB InBev controls 45% of the market and SABMiller another 25% through its MillerCoors LLC joint venture with Molson Coors Brewing Co.
If AB InBev cannot secure regulatory clearances or its shareholders don't approve the deal, the company will pay SABMiller a $3 billion breakup fee.
Another question for the two beer companies will be how to handle distribution, as SABMiller currently has a deal with Coca-Cola and AB InBev with PepsiCo.
SABMiller has put in a request to the UK Takeover Panel to extend the deadline for AB InBev to make a firm offer for SABMiller or walk away from Oct. 14 to Oct. 28.
AB InBev is also in the news for its acquisitions of several distributors, which has stalled sales growth for craft brewers who are having trouble distributing their beer as easily. This is especially concerning as AB InBev continues to snatch up craft brewers of its own, which some craft brewers allege means that AB InBev is pushing them out in favor of its own craft brands.
"Antitrust regulators are also reviewing craft brewers' claims that AB InBev pushes some independent distributors to only carry the company's products and end their ties with the craft industry, two of the sources said, noting that the investigation was in its early stages," Reuters reported.