AB InBev Makes Revised Proposal to Buy SABMiller -- Update
October 07 2015 - 2:07AM
Dow Jones News
By Saabira Chaudhuri
LONDON--Anheuser-Busch InBev NV on Wednesday said it has made a
proposal to SABMiller PLC's board to buy the world's second-largest
brewer in a deal valuing it at GBP68.24 billion ($104.1
billion).
The proposal of GBP42.15 a share in cash represents a premium of
approximately 44% to SABMiller's closing share price on Sept. 14,
the day before speculation about an approach from AB InBev
arose.
AB InBev said there is a share alternative for Altria Group Inc.
and BevCo Ltd. which hold roughly 41% of the SABMiller shares,
allowing ABInBev to get appropriate financing and support the cash
offer at a higher price than the brewer would otherwise be able to
offer.
AB InBev said it has made two prior written proposals in private
to SABMiller, the first for GBP38 a share in cash and the second
for GBP40 in cash.
"AB InBev is disappointed that the board of SABMiller has
rejected both of these prior approaches without any meaningful
engagement," said the brewer in a statement. "AB InBev believes
that the revised cash proposal of GBP42.15 per share is at a level
that the board of SABMiller should recommend."
SABMiller didn't immediately respond to requests for
comment.
Altria said it supports a deal of GBP42.15 a share or higher,
with a partial share alternative, saying this "would create
significant value for all SABMiller shareholders." The tobacco
giant, which is SABMiller's largest shareholder, said it would
choose the partial shareholder would be prepared to elect the
partial share alternative.
"Altria urges SABMiller's board to engage promptly and
constructively with AB InBev to agree on the terms of a recommended
offer."
AB InBev, under U.K. takeover rules, has until 5 p.m. on Oct. 14
to announce a "firm intention" to make an offer for SABMiller and
specify the details of the offer. Wednesday's proposal doesn't
count as being one.
If its overtures are firmly rejected or it decides to formally
withdraw, AB InBev then would have to wait six months to approach
SABMiller again, either through SABMiller's board or by approaching
shareholders directly. Negotiations could resume sooner if
SABMiller were to reverse itself and decide it was open to
talks.
A tie-up between the two beer companies would bring household
brands such as Budweiser, Corona and Stella Artois together with
Pilsner Uruquell, Grolsch and Peroni, and give the combined company
a major presence in the U.S., China, Europe, Africa and Latin
America. Together, AB InBev and SABMiller sell over 30% of the
world's beer volumes.
Such a deal has been rumored for years, and has been described
by some analysts as the last major piece of consolidation that
remains in the beer industry. Research firm Euromonitor has
estimated that the combined company's market share would be 29%
after the deal after likely divestments, giving it a 20 percentage
point lead over the next biggest brewer, Heineken NV.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 07, 2015 02:52 ET (06:52 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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