SABMiller AB InBev: $104B Takeover Bid

Published: October 9, 2015

SABMiller AB InBev: $104B Takeover Bid, It’s not clear whether the latest beer merger has gone flat or may still have some fizz.
The world’s biggest brewer, Anheuser-Busch InBev, is pursuing its chief rival SABMiller in an attempt to create a super brewery.

SABMiller (SBMRF) is playing hard to get. The multinational beermaker rejected an improved takeover offer Wednesday.

AB InBev said it was prepared to buy SABMiller for £42.15 ($64.34) per share in cash. That valued SABMiller at £68.2 billion ($104 billion), or 44% higher than its share price before talk of a takeover began circulating in September. SAB Miller said the £42.15 proposal “still very substantially undervalues” it.

But the “Bud-Miller” effort is far from over.

The combined company would be the world’s largest beermaker by far, with nine of the world’s top 20 beers by volume, and annual sales of $55 billion.

AB InBev (BUD) has already had two initial proposals at £40 ($61.07) and £38 ($58) per share rejected by SABMiller. But while the company’s board voted unanimously against the first two bids, its opinion on the latest offer was split.

Board members representing SABMiller’s biggest shareholder voted to accept the offer, saying the combination of the two companies would create significant value for shareholders.

Altria Group (MO), which owns 27% of SABMiller, said it supports a proposal of £42.15 or higher. Altria is the owner of Philip Morris USA Inc. and U.S. Smokeless Tobacco Company.

It was outvoted by the rest of the board, but continues to push for the merger.

“Altria urges SABMiller’s board to engage promptly and constructively with AB InBev to agree on the terms of a recommended offer,” it added.


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