World's biggest beer deal set to go ahead
July 29, 2016
London-based SABMiller Plc's board recommended acceptance of the revised $104 billion (93.1 billion euro) bid from industry leader Anheuser-Busch InBev (AB InBev) on Friday.
However, the deal is still to be voted on by shareholders, which could still be something of a hurdle. SABMiller's board proposed that its two biggest shareholders, Altria Group Inc., one of the world's largest tobacco and cigarette corporations, and Bevco Ltd., the El Salvador-based brewer and marketer of soft drinks, which operates as a subsidiary of SABMiller, should be treated as a separate class of stockholders.
Altria and BevCo hold the investments of the Santo Domingo family, and the two concerns together own about 40 percent of SABMiller. Other SABMiller investors would then be able to vote on the new offer separately.
"The board's decision was difficult given changes in circumstances since the board originally recommended 44 pounds (52.14 euros, $58.21) per share in cash last November," said SAB Chairman Jan du Plessis in a statement. "We believe the final cash consideration of 45 pounds (53.36 euros, $59.55) per share to be at the lower end of the range of values considered recommendable."
Du Plessis commented: "Various factors have affected the value of the offer, most importantly the impact of the Brexit vote on the value of sterling and the re-rating of comparable companies. This has made the Board's decision more challenging."
Belgian-headquartered AB InBev said it welcomed SABMiller's recommendation. The largest beer company in the industry has 200 brands including Budweiser, Corona and Stella Artois.
SABMiller sells beer under the brand names Carlton Draught, Foster's Lager and Pilsner Urquell, among many others.
If the recommendation is accepted, it would bring to an end several weeks of talks which endangered the combination of the world's largest brewers.
AB InBev has said that its latest improved offer was "final." Under UK takeover rules, it is not possible to increase a final offer.
The deal, which has been tagged "Megabrew" by analysts, would create an entity controlling about half of the world's beer industry's profits if it goes ahead. For AB InBev, it would represent a first step into the African market, where about 65 million people are due to reach the legal drinking age by 2023.
jm/kms (Reuters, AFP)