adminLONDON. — Anheuser-Busch InBev NV on Wednesday said it had formally agreed to buy SABMiller PLC for £69,8 billion ($105,5 billion), a deal that creates a brewing behemoth that will dominate much of the global beer market.
As part of that deal, SABMiller has agreed to sell its 58 percent share in the MillerCoors LLC joint venture to its partner, Molson Coors Brewing Co. , which holds the remaining stake, as well as the Miller portfolio outside the US for $12 billion.
The divestiture, which is contingent on the completion of AB InBev’s acquisition of SABMiller, would catapult Molson into the position of the No. 2 brewer in the US, with a 25 percent market share second only to AB InBev’s 45 percent share.
The sale of MillerCoors — which sells brands including Miller Lite, Miller High Life and Blue Moon — is necessary for AB InBev to gain US regulatory approval to buy SABMiller.
AB InBev plans to seek to have its shares listed on the Johannesburg Stock Exchange soon after Wednesday’s announcement.
The combined company’s ordinary shares will be listed in Brussels, Johannesburg and Mexico.
The American depositary shares will be listed in New York.
AB InBev said it expects to achieve at least $1,4 billion in pre-tax cost savings a year by the end of the fourth year after the deal is completed.
“By pooling our resources we would build one of the world’s leading consumer-products companies,” said AB InBev Chief Executive Carlos Brito.
“Our joint portfolio of complementary global and local brands would provide more choices for beer drinkers in new and existing markets around the world.”
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 US, China, Europe, Africa and Latin America.
Together, AB InBev and SABMiller sell more than 30 percent of the world’s beer.
The formal offer by AB InBev comes after weeks of back and forth between the two companies. SABMiller’s board announced October 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 percent premium to its share price on September 14, the day before media speculation about a potential deal emerged.
For 41,6 percent 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. — WSJ.
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