LONDON • Anheuser-Busch InBev has agreed to buy SABMiller for almost £69 billion (S$147 billion) to clinch a record industry deal after several rejections, creating a brewer that will account for a third of all beer sales globally.
The Budweiser maker will pay £44 a share in cash for a majority of the shares in its nearest competitor, the firms said in a statement yesterday, giving it control of about half the industry's profit. SABMiller shares rose as much as 9.4 per cent to £39.62 in London. The takeover would be the largest in British history, surpassing this year's £47 billion purchase of BG Group by Royal Dutch Shell. It would be the biggest deal of 2015, already a bumper year for dealmaking.
"We think that this is good value for SAB," said Ms Alicia Forry, an analyst at Canaccord Genuity. "It's great that they've come to a point where the valuation is agreed, and we expect AB InBev in due course to make a firm offer."
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 per cent drop in SABMiller stock in the months preceding AB InBev's approach and the prospect of an end to cheap credit also served as a catalyst to the 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.
For AB InBev chief executive Carlos Brito, the deal would cap a dealmaking spree that has seen the brewer spend about US$90 billion (S$126 billion) on transactions over the last 10 years. It is an acquisition the firm may need as its growth is set to slow over the next five years, estimates compiled by Bloomberg show.
AB InBev agreed to pay a fee of US$3 billion if it fails to get approval from regulators and shareholders for the purchase. The new company will be incorporated in Belgium.
The offer price is 50 per cent above the closing value on Sept 14, the day before takeover speculation resurfaced. The British brewer spurned previous proposals, including one AB InBev made public on Oct 7 that valued the company at £65.2 billion.
"SAB did a great job playing poker and driving the price higher," said Mr Peter Braendle of Zuercher Kantonalbank in Zurich. "AB InBev will do everything in its power to make this a success."
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 per cent of the company. They will not be able to sell the shares for five years, and will have the right to nominate directors.
BLOOMBERG
