Brewer AB InBev seeks $275 billion tie-up with SABMiller

Thu Sep 17, 2015 4:31am EDT
 
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By Philip Blenkinsop and Martinne Geller

BRUSSELS/LONDON (Reuters) - Anheuser-Busch InBev, the world's largest brewer, has approached rival SABMiller about a takeover that would form a colossus producing a third of the world's beer.

A merged group would have a market value of around $275 billion at current prices, and would combine AB InBev's dominance of Latin America with SABMiller's of Africa, both fast-growing markets, as well as their breweries in Asia.

"The real attraction is Africa, where AB InBev has no presence, as well as some add-ons in Asia and Latin America," said Societe Generale analyst Andrew Holland.

AB InBev and other top brewers are trying to move into new markets as they look to shrug off weakness in North America and Europe, where consumers increasingly choose craft beers made by independent players or wine or spirits.

SABMiller, the world No. 2 and maker of more than 200 beers including Peroni, Grolsch and Pilsner Urquell, said on Wednesday it had been informed that AB InBev intended to make an offer which it would have to do by Oct. 14 under British rules.

AB InBev, controlled by 3G Capital, a private equity fund run by a group of Brazilian investors, confirmed its approach. 3G, known for its focus on cost cuts at the expense of marketing, has previously orchestrated takeovers of Burger King, ketchup maker Heinz and Kraft Foods.

A source close to SAB said it was too early to say what it would do since no offer has been made.

"At this stage, we’re in wait and see mode," said the source.   Continued...

 
View of the Anheuser-Busch InBev logo outside the brewer's headquarters in Leuven February 26, 2014. REUTERS/Francois Lenoir