SABMiller Held Out For an Offer That Reflects the Company’s Value
14 Oct 2015 --- After weeks of offers and counter-offers, leading global brewer AB Inbev has made an offer for SABMiller that the latter has agreed upon ‘in principle’. The world’s two leading brewers have agreed on a price of £44 ($67) per share, which values SABMiller at $108bn. If the deal goes ahead, then a brewing giant will be created.
The deal, which AB Inbev has been eager to seal for several weeks, has suffered four previous setbacks, not least that SABMiller rejected four previous offers that it felt significantly undervalued the company, which is the second largest brewer by volume, behind AB Inbev.
Previously, AB Inbev made offers that it thought would be attractive to SABMiller, not least because it was reported that the two biggest SABMiller shareholders, including Marlboro maker Altria, fully supported a buyout by AB Inbev. SABMiller’s chairman Jan du Plessis, however, was keen to stress that AB Inbev needs SABMiller more than SABMiller needs AB Inbev and was willing to hold out for an offer that valued the company higher.
The resultant mega-brewer will have approximately 30% of the global beer market, including Budweiser, Miller, Pilsner Urquell, Peroni, Becks and Stella Artois. However, in the US the new company will have a 70% share of the market, a possible obstacle for competition authorities.
