SABMiller lukewarm after beer giant InBev hikes offer
The world's biggest brewer Anheuser-Busch InBev raised Wednesday its offer for British rival SABMiller to 68 billion pounds (92 billion euros), only to be told it was most likely still too low to save one of the largest ever corporate takeovers.
The deal sought by Belgian-Brazilian Inbev would create a global "megabrewer" that would bring together internationally famous brands such as the iconic US brew Budweiser and Stella Artois with Grolsch and Foster's.
But Britain's SABMiller, which has already rejected two previous bids from its rival, suggested strongly that the new offer would be rejected despite the fact it would create a combined new group worth around 220 billion euros ($250 billion).
"AB InBev is very substantially undervaluing SABMiller," SABMiller chairman Jan du Plessis said in a statement, describing his company as the "crown jewel of the global brewing industry."
He said the rival beer giant "needs SABMiller but has made opportunistic and highly conditional proposals, elements of which have been deliberately designed to be unattractive to many of our shareholders."
For its part, Inbev said the deal was fair.
"AB InBev believes the revised cash proposal of 42.15 pounds per share is at a level that the board of SABMiller should recommend," it said in a statement.
- Another raised offer? -
SABMiller shares were up more than one percent at 36.64 pounds in mid-morning London trade, coming off early gains of around three percent after the revised offer was announced.
InBev was up 1.6 percent.
With the lager saga already dragging on for weeks, analysts say InBev may have to increase its offer to around 45 pounds to get the deal done at a time when the global players are looking to consolidate.
The big brewers are looking for tie-ups to offset the inroads made by small independent brewers catering to local demand for craft beers and other less brand-heavy products.
SABMiller shareholders rejected two previous offers at 38 pounds and then 40 pounds and analysts said they may well do the same again.
The British brewer recalled when InBev had discussed offering 42 pounds in talks last month, the board had concluded that it was too low, noting that the new proposal was only 15 pence higher.
The brewing giant's board would however meet formally to consider the offer, the statement added.
"We should not be surprised to see a slightly raised offer over the next week," Simon Davies of Canaccord Genuity in London said in a note.
"AB InBev's bid for SABMiller is the inevitable conclusion of over a decade of consolidation within the brewing industry," said Jeremy Cunnington at Euromonitor International.
"The completed deal will give AB InBev a 29 percent market share, which is a 20 percentage point lead over the next biggest brewer, Heineken," Cunnington said.
Heineken said last month it was buying half of Lagunitas, the fifth-largest craft brewer in the United States.
- 'First truly global beer company' -
InBev itself was formed in 2008 by the merger of Belgian-Brazilian group InBev and US brewing giant Anheuser-Busch.
InBev, which makes global brands Budweiser, Corona and Stella Artois, said in its earlier statement that it was disappointed that SABMiller had rejected its two previous offers "without any meaningful engagement".
"We have the highest respect for SABMiller, its employees and its leadership, and believe that a combination of our two great companies would build the first truly global beer company," Inbev chief executive Carlos Brito said.
Together, they would cover "virtually every major beer market", it said, including the emerging markets of Africa, Asia and Latin America.
© 2015 AFP