Brewing giant SABMiller sold in R1.7-trillion deal

Third biggest takeover in history

THE world’s top brewer Anheuser-Busch InBev yesterday clinched a gigantic formal $121-billion (R1.7-trillion) deal for its nearest rival SABMiller, in the third biggest takeover in global corporate history.

The blockbuster transaction, worth the equivalent of billion including debt, will bring together InBev’s top lagers like Beck’s, Budweiser and Stella Artois, with SABMiller brands Foster’s, Grolsch and Peroni.

Belgian-Brazilian behemoth InBev is eager to tap into booming developing markets in Africa and China, where SABMiller’s joint venture produces Snow – the world’s best-selling beer by volume.

InBev will pay £44 (R948) per share in cash for SABMiller, which has also agreed to sell its 58% stake in US unit MillerCoors for $12-billion to Molson Coors to help win regulatory approval, it said in a joint statement.

“The boards of Anheuser-Busch InBev and SABMiller are pleased to announce that they have reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of SABMiller by AB InBev.”

The transaction is set to complete in the second half of next year, subject to shareholder and regulatory approvals – otherwise InBev will face a $3-billion break fee.

The agreement marks the world’s third biggest takeover in corporate history, according to financial information provider Dealogic, and is also the largest ever takeover of a British company.

InBev added that the takeover would “strengthen AB InBev’s position in key emerging regions with strong growth prospects such as Asia, Central and South America, and Africa”.

The transaction will also “create a truly global brewer, drawing on a similar heritage and shared passion for brewing and commitment to quality”, it said.

The group will target annual efficiency savings of “at least” $1.4billion by the end of the fourth year following completion, sparking fears of job losses.

“We believe this combination will generate significant growth opportunities and create enhanced value to the benefit of all stakeholders,” said AB InBev chief executive Carlos Brito said.

SABMiller chairman Jan du Plessis said the British group benefited from its presence across the developing world – and the takeover price had won the board’s unanimous backing. “SABMiller has an unmatched footprint in fast-growing developing markets, underpinned by our portfolio of iconic national and global brands.”

“However, AB InBev’s offer represents an attractive premium and cash return for our shareholders, and secures earlier delivery of our long-term value potential.”

The two brewing giants had already agreed in principle last month on the £44-per-share deal.

The pair added yesterday that the sale of SABMiller’s holding in US business MillerCoors, which makes Coors Light, was designed to “promptly and proactively address regulatory considerations”. — AFP