Budweiser’s AB InBev tops up bid for SABMiller to $108 bn
The world's biggest brewer Anheuser-Busch InBev increased its takeover offer for rival beer giant SABMiller to $108 billion Monday, just days ahead of a deadline to secure a blockbuster tie-up of top brands Budweiser and Grolsch
In its fourth and possibly last bid following a series of rejections, Belgian-Brazilian AB InBev made an offer to the board of Britain’s SABMiller on Monday worth £43.50 per share ($66 or 58.7 euros).
SABMiller has said previous bids were too low and undervalued the company, upping the pressure ahead of Wednesday’s regulatory deadline when AB InBev must make an official offer or walk away for at least six months.
“Anheuser-Busch InBev notes recent speculation and confirms that it has today made an improved proposal to the Board of SABMiller plc to combine the two companies and build the first truly global beer company,” AB InBev said.
After confirmation of the offer, SABMiller shares plunged 2.26 percent to 3,585.50 pence in London afternoon trading, while InBev rose 0.08 percent to 98.38 euros in Brussels.
A blockbuster deal combining the world’s top two alcoholic drinks companies by sales volumes would create a global “megabrewer” worth about 220 billion euros ($250 billion).
The world’s big brewers are looking for tie-ups to offset the inroads made by small independent brewers and the rise of craft beers.
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The new AB Inbev offer includes the full cash offer but also a possible alternative that comprises shares.
Analysts said that option is to entice SABMiller’s two biggest shareholders, the tobacco giant Altria and BevCo, the investment company of Colombia’s wealthy Santo Domingo family.
Marlboro cigarette maker Altria — which owns 27 percent of SABMiller — called last week on the British group to engage promptly with AB InBev and agree terms.
But the intentions of the Santo Domingo family are less known and the fate of the deal could largely be in the hands of 38-year-old Alejandro Santo Domingo, the heir to the brewing fortune.
AB InBev had last week offered $103 billion or £42.15 per share, for the British group that makes Foster’s and Grolsch.
Rejecting the offer, SABMiller announced its own intention to cut costs in order to fend off any further takeover bid and persuade investors the company could stand alone.
That cost cutting pledge came after AB InBev in an unusual move pled directly to SABMiller shareholders to merge their two companies.
Such a merger would be the pinnacle of a growing trend for beer behemoths in the face of growing consumer fondness for niche beers.
Dutch beer titan Heineken said last month it was buying half of Lagunitas, the fifth-largest craft brewer in the United States.
And last week the Dutch group announced a deal worth 696 million euros ($780 million) with the world’s biggest distiller, Diageo, to get a majority stake in Jamaica’s Red Stripe brewer and Malaysia’s GAB, maker of Tiger and Anchor beer.