AB InBev launches SAB bid, to sell MillerCoors stake

Wed Nov 11, 2015 11:19am EST
 
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By Philip Blenkinsop and Martinne Geller

BRUSSELS/LONDON (Reuters) - Anheuser-Busch InBev (ABI.BR: Quote), the world's biggest brewer, launched its $100 billion-plus offer for nearest rival SABMiller SAB.L on Wednesday and agreed to sell the latter's stake in U.S. venture MillerCoors to help win regulatory approval.

AB InBev, whose takeover of SABMiller would be one of the largest mergers in corporate history, said it expected to achieve $1.4 billion in annual savings four years after completion of the deal, projected for the second half of 2016.

The deal currently worth about 70 billion pounds, or $106 billion, was clinched with an agreement for Denver-based Molson Coors (TAP.N: Quote) to take over SABMiller's 58 percent stake in their venture, MillerCoors, for $12 billion.

That price tag is higher than some analysts expected, given the small group of potential buyers. However, they had not anticipated it including global rights to the Miller brand, which will nearly double the amount of beer Molson sells internationally.

At the same time, the savings target, worth about 9 percent of SABMiller's sales, is lower than expectations, although it does come on top of the $1.05 billion that SABMiller had already pledged during the bidding process.

The merger will combine AB InBev's Budweiser, Stella Artois and Corona brands with SABMiller's Peroni, Grolsch and Pilsner Urquell and brew almost a third of the world's beer, dwarfing rivals Heineken (HEIN.AS: Quote) and Carlsberg (CARLb.CO: Quote).

The takeover, which SABMiller's board provisionally accepted last month, would be the largest of a British-based company and the fourth-biggest overall of any corporation. It will be backed by a record $75 billion loan.

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