Tallahassee Journal

AB InBev and SABMiller ink $104B ‘in principle’ deal

AB InBev and SABMiller ink $104B ‘in principle’ deal

Anheuser-Busch InBev and SABMiller said Tuesday they have agreed in principle on sweetened terms of an all-cash takeover offer that could dramatically alter the global beer market. The offer, Belgium-based AB InBev’s fourth, valued London-headquartered SABMiller at $104 billion. If finalized, it would bring the Budweiser, Stella Artois, Corona, Miller Lite, Peroni and other popular brands under common ownership of a market giant with nearly 30% of worldwide beer sales.

The tentative agreement represents a roughly 50% premium over SABMiller’s closing share price on Dept. 14, the last trading day prior to renewed public speculation about an approach by AB InBev, the companies said. The potential deal caps more than a month of successive offers in which Budweiser maker AB InBev tried to acquire SABMiller, its main competitor in the global brewing market. Before Tuesday’s breakthrough, SABMiller rejected the bids as too low.

The companies have until Oct. 28. to reach a formal agreement under British mergers-and-acquisition legislation. The combined firm would be headquartered in Belgium. “The Board of SABMiller has indicated to AB InBev that it would be prepared unanimously to recommend the all-cash offer,” the companies said in a joint announcement.

The deal is subject to unanimous recommendation by the SABMiller board, final approval by AB InBev’s board and other conditions. Additionally, final agreement on the mega-deal, if reached, would likely trigger anti-trust reviews in both the U.S. and the European Union. Those reviews could significantly alter or even reject the deal. Under the potential transaction terms, SABMiller shareholders would be entitled to receive 44 British pounds, or roughly $68, per share in cash. A partial share alternative is available for approximately 41% of the SABMiller shares under the deal.