UPDATE: AB InBev's CEO Carlos Brito again asked SABMiller shareholders Thursday to encourage takeover talk among the company's board, reports Reuters, following the same plan from Wednesday. An analyst called this plan — a potential buyer talking directly to the other company's shareholders — "hostile lite."
Dive Brief:
- SABMiller rejected Anheuser-Busch InBev's third bid attempt for a takeover of the company on Wednesday morning, this time for about $100 billion. SABMiller cited the undervaluing of the company in its rejection.
- AB InBev had also offered the availability of a partial share alternative for about 41% of the SABMiller shares, which AB InBev said has allowed it to bid at a higher price than it would otherwise be able to.
- Altria Group Inc., SABMiller's largest shareholder, liked AB InBev's latest overture and told SABMiller's board to work "promptly" with the company. According to an RBC Capital Markets analyst, "This is not, in our view, intended as ABI's concluding proposal."
Dive Insight:
AB InBev said it was "disappointed" in SABMiller's rejection of AB InBev's first two offers of 38 pounds (around $58) per share and 40 pounds (around $61) per share "without any meaningful engagement," according to a news release. Now with AB InBev's latest offer and the backing of Altria, SABMiller's largest shareholder, this deal may be one step closer to an agreement that would create the largest brewing company in the world, controlling nearly one-third of global beer production.
The deal was still slightly below the 45 pounds (around $69) per share that Bloomberg sources said that SABMiller might be looking for earlier this week.
Even if SABMiller eventually agrees to the deal, it would still face regulatory scrutiny in several countries before the merger would be approved.
"We have the highest respect for SABMiller, its employees and its leadership, and believe that a combination of our two great companies would build the first truly global beer company," Carlos Brito, CEO of AB InBev, said in a statement. "... Put simply, we believe we can achieve more together than each of us could separately, bringing more beers to more people and enhancing value for all of our stakeholders."
AB InBev announced it would acquire its fifth craft brewery in five years, Golden Road Brewing, last month.