LPC-AB InBev lining up $70 billion debt for SABMiller offer

Tue Sep 29, 2015 3:09pm EDT
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By Alasdair Reilly

LONDON (Reuters) - Anheuser-Busch InBev (ABI.BR: Quote) is asking banks to underwrite up to $70 billion in debt financing to back its potential takeover of SABMiller SAB.L, banking sources said.

The initial financing is expected to comprise bridge loans, which will be refinanced by bond issues, and longer term loans, the sources said.

Banks working on the deal include AB InBev’s core relationship banks: Banco Santander, Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Deutsche Bank, ING, JP Morgan, Mizuho Bank, Royal Bank of Scotland, Societe Generale and SMBC, banking sources said.

Banks remain highly liquid despite recent global market volatility and are eager to lend in size to core corporate clients such as AB InBev.

"It’s a lot to swallow, but it will get done," a head of loan syndicate said.

News of the financing package was first reported by Bloomberg. AB InBev and SABMiller both declined to comment.

A takeover of SABMiller, the world's No. 2 brewer with brands including Peroni and Grolsch, could likely cost upwards of 68 billion pounds ($103.05 billion), according to analysts' estimates.

The companies said on Sept. 16 that AB InBev had approached SAB about a takeover. Under UK takeover rules, the company has until Oct. 14 to make a firm offer.   Continued...

A woman walks outside the Anheuser-Busch InBev brewery headquarters in Leuven August 12, 2010. REUTERS/Jan Van De Vel