AB InBev buys SABMiller for $104bn in record deal

BREAKING: AB InBev buys SABMiller for $104bn in record deal
42 minutes ago

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COMPANY DATA

SABMILLER PLC [JSE:SAB]
Last traded 732
Change -18
% Change -2
Cumulative volume 4746356
Market cap 0
Last Updated: 12-10-2015 at 05:05. Prices are delayed by 15 minutes. Source: McGregor BFA

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BREAKING NEWS: Anheuser-Busch (AB) InBev has agreed to buy SABMiller [JSE:SAB] for £68bn, raising its bid to clinch a record industry deal that brings one out of every three beers sold worldwide under a single company.

The Budweiser maker offered 4 400 pence a share in cash for a majority of the shares in its nearest competitor, gaining brands such as Peroni and Grolsch, and giving it control of about half the industry’s profit. The price is 46% above SABMiller’s closing value on September 15, the day before the companies disclosed they were in contact about a potential bid.

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% 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 back- and-forth negotiations over the price. SABMiller said its board is prepared to recommend it.

SABMiller shares fell 1.3% to 3 621.50 pence in London Monday. AB InBev was little changed at €98.35 in Brussels.

SABMiller spurned previous proposals, including one AB InBev made public on October 7 that valued the company at about £65.2bn.

SABMiller’s two largest shareholders, Altria Group and Bevco, can receive cash and stock valued at £39.03 a share for their stakes, which account for 41% of the company.

Bad news for SA.

We are talking trillions of rands Will the government allow dat kind of money to leave for off shore

N my beer prices will go up soon
Going to drink only government funded water

1 out of 3 reads bad for consumers, wonder if the Competition Commission will be called upon to give the deal the green light.

The amount involved is equal to our national budget.That's crazy money.The people in power must have already convened a secret meeting to try and figure out how to get in on the action.

And you can bet your bottom dollar on that ! :lol:

JSE welcomes AB InBev, while US starts competition probe


Washington – US competition officials began an in-depth investigation of Anheuser-Busch (AB) InBev’s planned takeover of SABMiller [JSE:SAB], seeking additional information related to the deal.

The probe comes ahead of AB InBev’s R3trn listing on the Johannesburg Stock Exchange (JSE) on Friday, which it promised as part of its plan to win the takeover bid last year.

AB InBev agreed to buy SABMiller for £68bn (now R1.62trn) in October with a £44 (now R1048) offer. SAB’s share price on the JSE propelled from R610 in August to R966.53 by Friday.

The Justice Department’s (DOJ) antitrust division – as it is known in the US - recently issued a so-called second request to the beer maker, according to the company. The inquiry, a move by the Justice Department that was expected by the companies, lengthens the review of how the combination will affect competition and prices for beer.

“As expected with a transaction of this nature, we received a second request for information from the DOJ,” said Marianne Amssoms, a spokesperson for AB InBev. “We continue to work closely with DOJ to provide them additional information.”

Sign off needed from more countries

The Justice Department is among competition authorities across the world who must sign off on the takeover that combines the world’s biggest brewers. The enlarged company would account for about half the industry’s profit and almost a third of all beer sold worldwide.

To resolve antitrust concerns in the US, AB InBev, the maker of Budweiser, has agreed to sell SABMiller’s 58% stake in MillerCoors to joint-venture partner Molson Coors Brewing. By selling that stake, AB Inbev says the merger won’t harm competition in the US because its market share will remain the same.

Justice Department spokesperson Mark Abueg declined to comment on the investigation.

Beer distribution

Craft brewers have raised concerns about AB InBev’s control over beer distribution to consumers.

An association representing the brewers told a senate hearing in December that the Justice Department should require AB InBev to divest its company-owned wholesalers and change conduct that it says restricts distribution of rival products.

Distribution agreements, however, aren’t a key focus of the Justice Department’s review, according to a person familiar with the matter.

AB InBev and SABMiller still expect to close the transaction in the second half of this year, said the person, who asked not to be identified because the process isn’t public.