This bid’s for you: $245B beer merger on tap

Beer behemoth Anheuser-Busch In Bev confirmed Wednesday that it has approached rival SAB Miller about a takeover that would combine the world’s two biggest beermakers and mark the biggest shakeup in the industry in nearly a decade.

The deal, which would create a $245 billion global company, would trigger an intense antitrust review. If finalized, it would bring some of the world’s most iconic beers — AB In Bev makes Budweiser, and SAB Miller brews Miller Lite — under one roof.

AB In Bev also brews Corona, Stella Artois, Hoegaarden and Skol. SAB Miller’s roster of beers include Aguila, Peroni and Pilsner Urquell.

AB In Bev, the world’s largest brewer based on sales, said it intends to work with SAB Miller’s board of directors on completing the deal. SAB Miller, headquartered in London, said in a statement that no proposal has been received and the board has no further details about any terms. AB In Bev must announce a firm intention by Oct. 14.

The biggest question hanging over any deal is antitrust. One potential holdup could be SAB Mil-- ler’s 58% stake in Miller-Coors, the brewer of Coors Light and Molson Canadian. Molson Coors, which owns the rest of Miller-Coors, has the right to increase its stake in the company if SAB Miller is taken over.

“The likelihood is that for any deal to go through, SAB would have to end its joint venture in the U.S. with Molson Coors,” says Jonny Forsyth, an analyst at market research firm Mintel.

Ankur Kapoor, a partner at antitrust law firm Constantine Cannon, says the combined firms could control 70% of the U.S. beer market with the top brands: Budweiser, Miller and Coors.

“You can just imagine what the reaction would be if GM, Ford and Chrysler tried to merge. This is not dissimilar,” Kapoor says. “Without a divestiture, I think there’s little or no chance for a deal.”