beer giants ab inbev and sabmiller agree takeover terms - bbc news
DESCRIPTION
beerTRANSCRIPT
10/17/2015 Beer giants AB InBev and SABMiller agree takeover terms - BBC News
http://www.bbc.com/news/business-34513520 1/7
13 October 2015 Business
Beer giants AB InBev and SABMiller agree takeoverterms
The world's two biggest beer producers are set to merge after SABMiller accepted anincreased takeover offer from rival Anheuser-Busch InBev.
SABMiller said it had agreed "in principle" a £44-a-share offer, after four previous attemptsfrom AB InBev.
AB InBev's brands include Budweiser, Stella Artois and Corona, while SABMiller producesPeroni and Grolsch.
If the deal, worth about £70bn, goes ahead, the newly-created firm will make about 30% ofthe world's beer.
SABMiller has a workforce of close to 70,000 people in more than 80 countries, and globalannual sales of more than $26bn. AB InBev has a workforce of 155,000 and global revenuesof more than $47bn.
Getty Images
News Sport Weather Shop Earth Travel More
10/17/2015 Beer giants AB InBev and SABMiller agree takeover terms - BBC News
http://www.bbc.com/news/business-34513520 2/7
What deal means for drinkers
Global market share of five biggest beer companies
Anheuser-Busch InBev - 20.8%
SABMiller - 9.7%
Heineken - 9.1%
Carlsberg - 6.1%
China Resources Enterprise - 6%
Source: Euromonitor, based on 2014 figures
AB InBev had made four previous bid approaches for SABMiller - at £38, £40, £42.15, and£43.50 per share - but they had been rejected by SABMiller, which argued they undervaluedthe company.
In a statement, the boards of the two firms said they had now "reached agreement inprinciple on the key terms of a possible recommended offer".
The two companies have not yet formally finalised the terms of an offer, but the latestdevelopment means they have extended the City deadline for a firm offer until 28 October.
Analysis: Matthew Davies, business reporter, Johannesburg
SABMiller's African brands are actually one of the main reasons AB InBev is so thirsty for thismerger. Carlos Brito, the chief executive of AB InBev, has said that Africa is a "key piece" of
PA
10/17/2015 Beer giants AB InBev and SABMiller agree takeover terms - BBC News
http://www.bbc.com/news/business-34513520 3/7
the deal.
SABMiller, of course, has its roots in Africa - South African Breweries was founded aroundthe time of gold rush in Johannesburg in the late 19th Century. As it stands, and if this dealgoes through, it would mean that the merged entity would control 31% of global beer sales.
AB InBev's brands are largely concentrated in the Americas and Europe; SABMIller hasabout 40 brands in Africa. It was the growth of SABMiller's African brands that really attractedAB InBev.
What makes these brands so tasty is the growing African middle class, an army ofconsumers that all the major brewing companies have been eyeing up in recent years. AsAfrican beer drinkers have become more prosperous over the past 20 years, they havemoved out of the informal home-brewing market and started to buy branded beer.
The latest proposal comes a day before the original deadline, by which AB InBev had tomake a formal bid for SABMiller or walk away for six months.
The offer represents a premium of about 50% over and above SABMiller's share price in mid-September, before the bid battle started.
In morning trade in London, SABMiller's share price rose 9% to £39.48, while shares in ABInBev were 2.85% higher at €101.15 in trading in Brussels.
Share this story About sharing
What would a SABMiller takeover mean for drinkers?13 October 2015
Brewery battle: AB InBev and the craft beer challenge13 October 2015
AB InBev makes higher offer for SABMiller12 October 2015
InBev tells SABMiller: Don't let beer giant merger die8 October 2015