Fourth increase did the trick
AB InBev’s offer now stands at 44 euro per share, 50 % above SABMiller’s share price immediately before the news broke about the acquisition plans. That means the Belgian-Brazilian company will have to pay 96 billion euro (in cash and stock) to acquire the number two in the beer market, British-South African SABMiller.
SABMiller’s board had only last week turned down several other bids: at 38, 40, 42.15 and 43.5 pounds per share, as they were “substantially too low”. In the end, AB InBev will pay 44 pounds (59 euro) per share, which has prompted SABMiller’s board to “unanimously” recommend the bid to all of its shareholders.
Worldwide giant with global coverage
When both beer giants become one company, it will create a giant that controls about 30 % of the worldwide beer market, but it will have to sell off several brands in different regions to make sure it does not create a monopoly. In the United States for example, the company would own about 75 % of the beer market, which is something the American Bureau of Competition will never allow.
With this acquisition, Carlos Brito has put the crown on his years of mergers and acquisitions and AB InBev gains a foothold in regions it did not enter yet (like Africa and Australia). Even the last pieces of the Latin American beer puzzle have now been filled.
It is not clear how the group will be called, but the press release does indicate that AB InBev intends to remain a Belgian entity after the acquisition. A new company will be created which will contain both AB InBev and SABMiller, while AB InBev writes it intends to keep its main office in Belgium.
