AB InBev, SABMiller Formalize $105 Billion Deal
November 11 2015 - 3:10AM
Dow Jones News
LONDON—Anheuser-Busch InBev NV on Wednesday said it had formally
agreed to buy SABMiller PLC for £ 69.78 billion ($105.5 billion), a
deal that creates a brewing behemoth that will dominate much of the
global beer market.
As part of the deal, SABMiller has agreed to sell its 58% stake
in the MillerCoors LLC joint venture to its partner Molson Coors
Brewing Co., which holds the remaining 42%, for $12 billion. It is
also selling the Miller international business. The transaction
catapults Molson into the position of the No.2 brewer in the U.S.
with a 25% market share that is second only to AB InBev's 45%
share.
The sale of MillerCoors—which sells brands including Miller
Lite, Miller High Life and Blue Moon—is necessary for AB InBev to
gain U.S. regulatory approval to buy SABMiller.
The formal offer by AB InBev comes after weeks of back and forth
between the two companies. SABMiller's board announced on Oct. 13
that it had agreed in principle to unanimously recommend to its
shareholders AB InBev's proposal to pay £ 44 a share to buy the
London-based brewer, marking a 50% premium to its share price on
Sept. 14, the day before media speculation about a potential deal
emerged.
For 41.6% of stock, AB InBev is offering a partial-share
alternative, essentially a combination of cash and unlisted stock,
translating into a lower per-share price of £ 41.85. The
alternative was designed to appeal to SABMiller's largest
shareholders, cigarette giant Altria Group Inc. and the BevCo Ltd.
investment vehicle of Colombia's Santo Domingo family.
The enlarged company's ordinary shares will be listed in
Brussels, Johannesburg and Mexico. The American Depositary Shares
will be listed in New York.
AB InBev expects to achieve at least $1.4 billion in run-rate
synergies a year by the end of the fourth year once the deal is
completed.
A tie-up between the two beer companies, if it gets the green
light from regulators, would bring AB InBev brands such as
Budweiser, Corona and Stella Artois together with SABMiller's
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 more than 30% of the world's beer.
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(END) Dow Jones Newswires
November 11, 2015 03:55 ET (08:55 GMT)
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