UK: AB InBev to buy SABMiller for 106 billion dollars in record deal | Progresiv
Anheuser-Busch InBev NV agreed to buy SABMiller Plc for almost 69 billion pounds (106 billion dollars), raising its bid after several rejections to clinch a record industry deal that will bring one out of every three beers sold worldwide under a single company. 
The Budweiser maker will pay 44 pounds a share in cash for a majority of the shares in its nearest competitor, the companies said in a statement, gaining brands such as Peroni and Grolsch and giving it control of about half the industry’s profit. SABMiller shares rose as much as 9.4 percent to 39.62 pounds in early London trading.
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 percent 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. The takeover would be the largest in U.K. history.
The companies have agreed to seek a two-week extension of the deadline to make an offer, to 5 p.m. London time on Oct. 28, giving them time to formalize the agreement. AB InBev agreed to pay a fee of 3 billion dollars if it fails to get approval from regulators and shareholders for the purchase. The new company will be incorporated in Belgium.
SABMiller’s two largest shareholders, Altria Group Inc. and Bevco Ltd., can receive cash and stock valued at 39.03 pounds a share for their stakes, which account for 41 percent of the company. They won’t be able to sell the shares for five years, and will have the right to nominate directors.
Together, AB InBev and SABMiller will be the world’s largest consumer-staples company by earnings, according to Exane BNP Paribas analysts, who estimate the combined company will make 25 billion dollars before interest, tax, depreciation and amortization in 2016. The enlarged brewer will have the number one or two positions in 24 of the world’s 30 biggest beer markets, they estimate. (www.esmmagazine.com)
