BRUSSELS: Anheuser-Busch InBev NV (ABI) agreed to buy SABMiller PLC (SAB) for almost ￡69 billion (US$105.36 billion), raising its bid after several rejections to clinch a deal that is to bring one out of every three beers sold worldwide under a single company.
The Budweiser maker is to pay ￡44 per share in cash for a majority of the shares in its nearest competitor, the companies said in a statement yesterday, gaining brands such as Peroni and Grolsch, and giving it control of about half the industry’s profit.
SABMiller shares rose as much as 9.4 percent to ￡39.62 in early London trading.
“We think that this is good value for SAB,” Canaccord Genuity. analyst Alicia Forry said. “It’s great that they’ve come to a point where the valuation is agreed, and we expect ABI in due course to make a firm offer.”
After years of speculation, the deal has been hastened by the impact of slowing economies in the emerging markets of China and Brazil. A 20 percent drop in SABMiller shares in the months preceding AB InBev’s approach and the prospect of an end to cheap credit also served as a catalyst to a takeover.
The agreement, which is tentative, caps more than two weeks of negotiations over the price.
SABMiller said its board is prepared to recommend it.
SABMiller shares traded at ￡39.51 at 8:13am in London. The offer price is 50 percent above the closing value on Sept. 14, the day before takeover speculation resurfaced. AB InBev shares rose 3.7 percent to 102 euros in Brussels.
The takeover would be the largest in British history, surpassing this year’s ￡47 billion purchase of BG Group PLC by Royal Dutch Shell PLC. Under British takeover rules, AB InBev has until 5pm tomorrow to make a formal offer, but the companies have agreed to seek a two-week extension of that, to 5pm London time on Oct. 28, giving them time to formalize the agreement.
AB InBev agreed to pay a fee of US$3 billion if it fails to get approval from regulators and shareholders for the purchase. The new company is to be incorporated in Belgium.
The UK brewer spurned previous proposals, including one AB InBev made public on Wednesday last week that valued the company at about ￡65.2 billion pounds.
Together, AB InBev and SABMiller are to be the world’s largest consumer-staples company by earnings, according to Exane BNP Paribas analysts, who estimate the combined company would make US$25 billion before interest, tax, depreciation and amortization next year.
The enlarged brewer will have the No. 1 or No. 2 positions in 24 of the world’s 30 biggest beer markets, they estimated.
