The prospect of a tie-up between the world’s two largest brewers Anheuser-Busch InBev and SABMiller is looming…reports Asian Lite news.
The combined value of the two firms is likely to be at least $230bn (£150bn) based on Tuesday’s share price. AB InBev’s brands include Budweiser, Stella Artois and Corona, while SABMiller owns Peroni and Grolsch.
If the deal is successful, the merged company would produce one third of the world’s beer, reports BBC News.
AB InBev said it had approached SABMiller’s board about a “combination of the two companies”.
However, it added that there was no certainty the approach would lead to an offer or an agreement, BBC News adds.
Earlier, SABMiller said it had been informed that AB InBev was planning to make a bid, but that it had no details as yet.
“No proposal has yet been received and the board of SABMiller has no further details about the terms of any such proposal,” the firm said, adds BBC.
Shares in SAB Miller jumped more than 20% on the news, while AB IN Bev’s shares were 11% higher.
“Let’s get this straight, this is a takeover by AB InBev of SABMiller. It’s not a merger,” said Larry Nelson, editor of the industry trade magazine, Brewer’s Guardian.
Given the size of the deal both parties would be likely to have to sell off parts of their operations to get it past the regulators, and that may mean sacrificing some of their US and Chinese businesses , adds BBC.
The merged company would be likely to move aggressively into faster growing markets. A merger would also strengthen its grip on South America and Mexico which are by far its most profitable markets.
This deal has long been anticipated but analysts believe AB InBev was held back from making an offer because of high levels of debt built up through a string of other purchases.